The Pakistani government’s recent proposal to slash the buyback rate for surplus solar electricity under its net metering policy—from Rs 27 per unit to Rs 10 for new contracts—has sparked heated debate. As an electronics engineer from the Ghulam Ishaq Khan Institute (GIKI) with over a decade of hands-on experience in solar energy, and as the head of a firm among the first 15 to secure net metering vendor certification in Pakistan, I’ve witnessed the evolution of this policy firsthand. What began as a visionary step in 2018 to promote renewable energy has now reached a crossroads, with implications for millions of consumers and the nation’s energy future.
The Policy Pivot: A Burden or a Balancing Act?
The government’s move, announced in early March 2025, stems from concerns over the financial strain net metering allegedly places on the grid. Energy Minister Awais Leghari has argued that the policy, introduced in January 2018 under then-Prime Minister Shahid Khaqan Abbasi, has ballooned into a Rs 150 billion burden on the 40 million non-solar consumers. These households, he claims, are footing an additional Rs 1.5 per unit to subsidize the 283,000 net metering beneficiaries—many of whom belong to affluent urban pockets like Karachi, Lahore, and Islamabad.
Leghari defends the rate cut as a necessary recalibration. “Our duty is not only to current and future net metering users but also to the millions who bear this cost,” he stated on X. Existing contracts will remain untouched, ensuring a 4–5-year payback period for new users—still a reasonable incentive, he argues. The minister insists this isn’t a loss but a redistribution of fixed infrastructure costs that solar users allegedly evade, leaving vulnerable households to pick up the tab.
Former Finance Minister Miftah Ismail, however, has challenged this narrative. In a detailed rebuttal on X, he questioned the Rs 150 billion figure, pointing out that DISCOs purchased just 1,269 GWh from solar consumers last year, amounting to Rs 34.3 billion in bill reductions—not Rs 150 billion. “This is less than 1% of DISCOs’ total purchases and a fraction of the 24,020 GWh lost in transmission and distribution (T&D),” Ismail noted. He argued that slashing buyback rates for new users—while grandfathering wealthier early adopters—punishes the middle class now turning to solar to escape crippling Rs 48.8 per unit grid tariffs (plus taxes). “Why not focus on reducing T&D losses, which dwarf solar’s impact?” he asked.
Leghari countered that the Rs 150 billion reflects a broader burden, not a direct loss, tied to fixed costs solar users avoid. He highlighted progress in cutting T&D losses—from Rs 226 billion in July–December 2023 to Rs 158 billion in the same period of 2024—a Rs 68 billion reduction. Yet, he admitted challenges persist, particularly in HESCO and SEPCO, where losses rose by Rs 28 billion due to governance issues.
The Evolution of Net Metering: A Technical Journey
To understand this debate, we must rewind to net metering’s origins in Pakistan. When introduced in 2018, it offered a unit-to-unit adjustment: one off-peak solar unit offset one grid unit, with excess credits encashable at Rs 9.8 per unit via cheque after six months—a boon when the rupee was stronger. By 2020, this shifted to an off-peak-to-off-peak adjustment, with peak units adjusted at a 1:3 ratio and surplus valued at Rs 19.6 per unit, first monthly, then quarterly. More recently, the off-peak rate climbed to Rs 27, but when paired with peak units and GST, the effective exchange rate stretched to 1:4.5.
Now, the government proposes Rs 10 per unit for new contracts, citing equity and grid sustainability. Earlier talks of gross metering—where solar users sell all output at a flat rate and buy grid power separately—were shelved, likely due to incompatible inverter software imports. Yet, the claim that solar users burden the grid with fixed costs overlooks a key engineering reality: on-grid and hybrid inverters deliver pure sine waves, synchronized at grid frequency and 180 degrees out of phase, reducing wear on transformers and appliances. This cleaner energy mix lowers maintenance costs, enhances grid stability, and supports industrial growth by freeing up off-peak capacity—benefits the government rarely acknowledges.
The Shadow of Misinformation and Market Manipulation
Each season, rumors swirl: net metering is ending, buyback rates are dropping, or gross metering is imminent. Much like the oil lobby, these whispers often trace back to vested interests—importers of conventional battery-based solutions pushing orthodox policies. At a recent expo, Chinese firms, flush with dollars, dominated pavilions, sidelining local pioneers like my firm. With 38 lithium battery brands now flooding the market, importers have a clear incentive to pressure the government into battery-friendly policies—hardly a bad idea if peak shaving were fully enabled, but premature without robust infrastructure.
Worse, a handful of firms—some allegedly linked to influential figures and propped up by outlets—exploit net metering’s chaos. These entities sublet licenses to uncertified freelancers, peddle subpar products, and fuel leakages. Blacklisted companies simply rebrand, paying Rs 6 lakh for approvals, while legitimate vendors face delays and corruption. Processing a net metering file often demands Rs 25,000–45,000 in “wheel money,” with black-market meters thriving when inventory runs dry.
A Way Forward: Practical Solutions
Pakistan’s energy policy must balance fiscal prudence with its Vision 2025 goal of 25% renewable energy by year-end—a target tied to SDGs and international loans from the IMF, World Bank, ADB, and China. The EV policy, extended to 2030, also hinges on solar-powered charging, making net metering’s viability critical. Here’s what I propose:
1. Peak Shaving Over Rate Cuts: Instead of slashing buyback rates, incentivize peak shaving—allowing solar users to offset peak grid demand. This reduces strain on infrastructure and aligns with industrial needs, all while maintaining a lucrative net metering framework.
2. Fixed Fee, Tax Relief: Impose a per-kW processing fee per file—say, Rs 5,000–10,000—linked to system size, but exempt net metering users from PTV tax and surcharges. This offsets fixed costs without punishing adoption.
3. Streamlined Governance: Crack down on departmental corruption—where legit applications languish outside gazetted times unless bribes are paid—by digitizing approvals and penalizing delays. Savings from black-market meters could fund grid upgrades.
4. PPIB Oversight: Ban firms subletting licenses to DIY freelancers and uncertified vendors. Mandate net meter installation (optional activation) for all households, akin to CNIC serving as NTN, ensuring quality and compliance.
5. Consistent Policy: Acknowledge solar’s role in reducing carbon footprints, boosting trade with China, and earning climate adaptation credits at global forums. Abrupt shifts deter investment and undermine Pakistan’s renewable commitments.
The Bigger Picture
The government’s focus on fixed costs ignores solar’s intangible benefits: a healthier grid, lower T&D losses, and a greener energy mix. Discriminating between old and new users risks widening regional disparities—Islamabad’s 34,000 solar customers dwarf Sukkur, Quetta, and FATA’s combined 200. Meanwhile, DISCOs sell power at Rs 48.8 per unit but balk at paying Rs 27—or even Rs 10—for solar, despite marginal costs hovering near Rs 9.7. If IPP contract renegotiations have saved billions, as claimed, why haven’t consumer bills dropped?
Pakistan stands at a solar crossroads. With coherent policy and bold reforms, we can harness this boom to power homes, factories, and EVs—without sacrificing the grid or the poor. The alternative is a cycle of rumors, profiteering, and missed opportunities. As a solar pioneer, I urge the government to choose wisely.
