Arshad Mahmood Awan
Federal Minister for Power Sardar Awais Khan Leghari has defended the government’s recent changes to solar net-metering regulations, responding to a Senate resolution seeking protection for rooftop solar users and alignment of new rules with the national renewable energy policy. The resolution, debated in the upper house, was deferred for further consideration, while Prime Minister Shehbaz Sharif has called for a review of the revised rules issued by the National Electric Power Regulatory Authority (Nepra).
The government’s sudden shift—from net metering to net billing for both existing and new users, while keeping buying prices unchanged for current prosumers—has reignited controversy. In principle, this move aligns Pakistan with global practice. Countries such as Australia and South Africa have adjusted incentives gradually as solar adoption increased and costs fell. In Pakistan, early subsidies encouraged rooftop solar adoption when panels were expensive. Over time, however, solar prices dropped while grid electricity costs rose due to inefficiencies and lack of import duties, creating an incentive imbalance.
The rising number of net-metered connections has imposed costs on the national grid. Grid operators must supply power to prosumers during non-solar hours, often at rates below actual cost, while high solar inflows during peak hours cause grid stability challenges. A delayed policy response—over nearly a year—allowed the number of connections to double, exacerbating the burden and heightening public mistrust.
Critics argue policy inconsistency undermines investment confidence. Pakistan has a history of uneven energy policies, such as approving Independent Power Producers (IPPs) during shortages, resulting in expensive surpluses and mounting circular debt. Similar indecision now affects rooftop solar investors, roughly 450,000 users who are relatively affluent and contribute significantly to the economy. While net-metered users represent a minority, the perception of unfair treatment risks dampening sentiment for broader renewable adoption.
Pakistan’s climate vulnerability further underscores the importance of renewables. The country secured a Climate Resilience and Sustainability Facility loan in May 2025, positioning solar energy as a strategic solution. Yet the government’s failure to anticipate adoption trends and the corresponding drop in grid demand has contributed to higher capacity payments, motivating Nepra’s rule changes.
Despite the controversy, solar expansion may continue, with battery-based solutions gaining traction. The fundamental issue remains the government’s delay and poor stakeholder engagement, which created unnecessary dispute over a policy that was, directionally, the right step toward sustainable energy.
