OPINION: Need for an amended solar policy |
Proposed changes to Pakistan’s net metering framework, particularly the reduction in solar buyback rates, had the potential to mark a decisive shift in the country’s renewable energy policy. Intended to address mounting financial pressures on non-solar consumers and power distribution companies (Discos), the proposed reforms ultimately stalled amid public backlash.
Yet the underlying challenges remain unresolved. If Pakistan is to ensure long-term grid stability, equitable cost-sharing, and a sustainable solar transition, further policy refinement is unavoidable.
The discussion around net metering reform gained momentum during policy-level engagements between the federal government and the International Monetary Fund under the ongoing USD 7 billion loan programme. Energy sector reforms, revenue measures, and debt reduction were central to these negotiations, alongside proposals such as a carbon levy on fossil fuels, additional charges on coal-based power generation, and revisions to the net metering tariff regime. Within this broader reform agenda, rooftop solar emerged as a critical, but contentious, component.
Globally, countries facing high rooftop solar penetration have moved away from traditional net metering towards net billing systems. Under net billing, exported electricity is compensated at rates closer to wholesale prices rather than full retail tariffs. Germany, Australia, and several US states have already made this transition.........