Could Solar Become the Achilles Heel of the Power Sector?

The big trend today isn’t to own the latest car but to brag about the size of the solar system at your house, and how much you’re saving on the bills. Since the launch of the net metering policy in 2015, the number of authorized vendors selling panels has mushroomed like the panels on households across the country, catapulting growth rates beyond everyone’s wildest projections. The policy was designed to encourage solar adoption by allowing customers to sell excess electricity back to the grid and offering generous buyback rates for surplus energy sales. Sounds great, but there was a flaw. In addition to reducing their billing, these customers are producing solar energy for peanuts and selling them back to the grid at manifold higher rates, enabling them to recoup their investments in record times. This payback period is shrinking rapidly as the costs of panels and their installation also declines globally. At the heart of the issue is a simple question: why should any grid be compelled to purchase excess electricity to serve a demand that no longer exists? Presently, as solar panels adorn more rooftops, the sheer volume of power flooding into the grid during the daytime far exceeds the demand. The result? Utilities are often forced to buy back this surplus power, even when it’s not needed, at rates that don’t reflect its real value. This doesn’t just strain the utilities—it creates a hidden cost that lands squarely on the shoulders of those who aren’t equipped to afford solar panels. It’s an unfair system that penalizes those without the means or the ability to install solar panels on their homes. Ordinary consumers are being squeezed rising energy costs and subsidizing someone else’s clean energy experiment. Faced with a similar glut, the largest energy provider on Australia’s east coast, Ausgrid, went to extreme lengths to add a “sun tax” pushing the customers to pay for units produced during the peak export period of 10am-3pm. While critics were quick to label it an attempt to stifle solar growth, the reality is more complex. The policy acknowledges that managing a flood of solar power during low-demand periods is costly and unsustainable. Rather than hoping for a credit for energy exported back to the grid, it encouraged homeowners to use their solar power by increasing self-consumption or store it for later. Spanish authorities also mulled levying charges to cover the costs of distributing and maintaining the electricity grid. In addition to paying the corresponding tax, the self-consumer also had to deliver the surplus energy to the grid free of charge. Pakistan needs to wake up and take off its rose-tinted glasses to stare at the sun directly. Anyone who cannot install solar has ended up shouldering the burden of those who can, implicitly driving up their already exacerbating bills. If the brakes aren’t applied soon, rooftop solar will become a bigger monster than the notorious IPPs who had a stranglehold on the country’s finances. The rate of power purchase needs to be lowered through a proper plan, and soon. Without it, we risk creating an energy system that benefits the few while leaving the rest to struggle with ever-rising costs. It’s time to rethink policies for solar adoption before it becomes a burden that overshadows the bright promise of renewable energy. This article is written by Mobashir Sandila. He is an energy sector analyst with keen interest in the power sector especially renewable energy, policy development and challenges.