LAHORE — The National Electric Power Regulatory Authority (Nepra) is working on a significant revision of solar net metering rates, proposing to reduce the buyback rate from Rs. 23 per unit to Rs. 10, sources at the Power Division said.
In a later phase, officials are considering removing the buyback mechanism entirely, meaning consumers generating solar power would have to use 100% of it themselves and would not receive payments for excess electricity fed into the grid. Currently, consumers generating solar power are paid around Rs. 125 billion annually under the buyback system.
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The revision comes amid concerns that rooftop solar installations are reducing grid electricity consumption and straining finances. In FY2024 alone, grid sales fell by 3.2 billion units, causing a Rs. 101 billion revenue shortfall for power distribution companies, which translated into a tariff increase of nearly Rs. 1 per unit for traditional electricity users.
Officials cited that payments to Independent Power Producers (IPPs) have become more difficult, as solar systems increasingly serve as an alternative to IPP-generated electricity. Power Division projections indicate the financial impact could widen significantly over the next decade.
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Prime Minister has intervened, directing the Power Division and Nepra on October 22 to reassess the buyback tariff and its broader effects before implementing any reforms.