At a moment when the global energy transition is accelerating rather than slowing, Pakistan appears to be deliberately walking away from one of the few reforms that emerged organically from public necessity rather than elite planning. Rooftop solar in Pakistan did not originate as a fashionable climate policy or an externally imposed conditionality; it was a grassroots response to structural failure. Years of expensive electricity, chronic load-shedding, weak governance of distribution companies, and the absence of affordable energy alternatives pushed households and small businesses toward self-generation. Solar panels became, for millions, not an environmental statement but a survival mechanism. That fragile social contract has now been shaken by abrupt policy reversals that disproportionately burden solar consumers and raise serious questions about the state’s long-term strategic thinking.
Earlier this month, the federal government announced the replacement of the net metering framework with a net billing regime, a move that fundamentally alters the economics of rooftop solar. Under the previous system, solar users were able to offset electricity drawn from the grid with surplus units exported to it at a roughly equivalent rate, allowing households to recover installation costs over time and reduce their exposure to tariff shocks. The new framework changes this balance decisively. Electricity exported by solar users will now be purchased at a sharply reduced rate, while electricity imported from distribution companies will continue to be billed at prevailing consumer tariffs, which already rank among the highest in the region when adjusted for income levels. The outcome is a structurally asymmetric arrangement that transfers risk from the grid to the consumer and erodes the financial logic of rooftop solar adoption.
The announcement triggered widespread public backlash, particularly among middle-income households that had invested their life savings in solar installations precisely to escape unpredictable electricity bills. In response, Prime Minister Shehbaz Sharif intervened and directed the regulator to ensure protection for existing consumers. Subsequently, NEPRA clarified that current net-metering users would remain governed by their original contracts until expiry, while all new solar adopters would be placed under the net-billing regime. While this clarification temporarily eased public anger, it did not resolve the underlying contradiction. Policy uncertainty itself has become the message. Investors, households, and small businesses are now being told that rules can change retroactively, incentives can be withdrawn overnight, and long-term planning carries political risk.
This development raises a question that policymakers have avoided confronting honestly. Was the government truly left with no alternative? Or was solar energy made deliberately less attractive to protect entrenched interests in the conventional power sector, including inefficient generation contracts, capacity payments, and politically sensitive distribution losses? Pakistan’s power sector is not merely an economic domain; it is a web of contracts, guarantees, and institutional rigidities that have resisted reform for decades. Rooftop solar, by reducing demand from the grid, threatens this structure. In that sense, discouraging solar adoption may be less about fiscal balance and more about preserving an unsustainable status quo.
The world is moving rapidly toward clean energy and technological integration.
Globally, the future of energy is inseparable from electrification, artificial intelligence, and renewable generation, particularly solar. Governments across Asia, Africa, and Southeast Asia are not merely encouraging rooftop solar; they are actively subsidising it to reduce pressure on national grids, lower fuel import bills, stabilise currencies, and meet climate commitments. According to the International Energy Agency, solar photovoltaic capacity now accounts for the majority of new power generation additions worldwide, largely because decentralised solar reduces transmission losses and enhances energy security. In many developing economies, rooftop solar is viewed not as a threat to utilities but as a complementary solution that postpones costly grid expansion.
A comparison with regional countries, excluding India, illustrates how out of step Pakistan’s approach has become. Bangladesh, despite far lower per capita income, has implemented one of the world’s largest solar home system programs, exceeding six million installations. These systems were supported through concessional financing, micro-credit, and stable net-metering incentives that allowed rural households to access electricity without overburdening the central grid. Sri Lanka offers guaranteed feed-in tariffs and long-term policy certainty, which has helped solar power account for more than one-fifth of daytime electricity generation, reducing dependence on imported fuel during peak hours. Nepal has encouraged rooftop solar through tax exemptions, import duty waivers, and net-metering rates indexed to inflation, acknowledging that policy stability matters as much as price signals.
Further east, Vietnam presents one of the most striking examples. By introducing transparent feed-in tariffs and clear timelines, Vietnam expanded its installed solar capacity from near zero to over 18 gigawatts in just three years, transforming its energy mix and reducing reliance on fossil fuel imports. Indonesia, long dependent on coal, has begun reforming its regulatory framework to accelerate rooftop solar adoption, recognising that decentralised generation can relieve grid congestion and lower long-term costs. None of these countries pursued solar expansion without challenges, but none chose to undermine consumer confidence once adoption had begun. Pakistan, by contrast, is signalling unpredictability at precisely the moment when long-term household and commercial investment is most needed.
The contradiction within Pakistan’s own policy framework is stark. On one hand, official statements repeatedly commit to increasing the share of renewable energy to 30 per cent by 2030, aligning with global climate pledges and regional trends. On the other hand, the government has withdrawn import subsidies on solar panels, imposed additional taxes, and introduced pricing mechanisms that penalise self-generation. The result is a policy environment in which stated objectives and actual incentives move in opposite directions. Energy transitions are not achieved through slogans; they require credible, consistent signals that survive political cycles.
At the same time, the government has announced relief measures that further expose the imbalance in its approach. A recent decision to reduce electricity prices for industrial consumers by PKR 4 per unit will cost the exchequer approximately PKR 125 billion. Rather than addressing inefficiencies in generation contracts or reducing line losses, this relief is being financed by imposing additional fixed charges on household consumers, many of whom are already struggling with inflation, stagnant wages, and rising taxes. Previously, electricity tariffs had already been increased by nearly PKR 3 per unit to manage circular debt, a problem that continues to grow despite repeated tariff hikes. This pattern reveals a deeper structural failure. Instead of reforming the system, costs are repeatedly shifted from one group to another, eroding public trust and economic resilience.
(To Be Concluded)
The writer has been teaching at various universities for the past 12 years. He is also the Head of Research and Investigation at 365 News, works as Web Editor at Daily Times, and can be reached at Dr.Muhammad [email protected].