Govt Backtracks from Reducing Solar Buyback Rate After Cabinet Says No

The federal cabinet on Wednesday postponed the approval of the solar net metering policy, well-informed sources told ProPakistani. The cabinet meeting today was chaired by Prime Minister Shahbaz Sharif. Later, the Premier ordered the Power Division to review it. Sources said several cabinet members, including the prime minister, expressed dissatisfaction with the proposed policy. As a result, the cabinet decided to return the policy to the Power Division for further revisions. The federal government recently decided to amend the policy to lower net metering rates with the excuse that it was putting pressure on grid consumers. Now postponed, the federal government was going to revise the buyback tariff from Rs. 27 per unit to Rs. 8-9 per unit for solar users to ensure that all electricity consumers share the costs equitably. The premier also lauded Pakistan’s successful staff-level agreement with the International Monetary Fund (IMF). He highlighted that the review of the first phase of the $7 billion Extended Fund Facility has been completed, and the IMF has approved an additional $1.3 billion to support climate change initiatives. The Prime Minister stated that the IMF’s recognition of Pakistan’s macroeconomic stability, declining inflation—now at its lowest since 2015—and governance reforms reflects confidence in the country’s economic direction. He credited Finance Minister Muhammad Aurangzeb and the economic team for their efforts in securing the agreements, which he said would aid in stabilizing the economy through structural reforms, tax enhancements, and private sector development. The cabinet also approved a reduction in electricity prices using savings from lowered petroleum prices. It also approved agreements between the Central Power Purchasing Agency (CPPA) and bagasse-fired power plants under revised terms. Additionally, the cabinet gave in-principle approval to the Whistleblower Protection and Vigilance Commission Act, 2025, aiming to strengthen transparency and accountability. Amendments to tax regulations within the Islamabad Capital Territory were also sanctioned under the Resource Mobilization and Utilization Reform Program, following earlier reforms in 2023 and 2024. The cabinet further approved the Income Tax (Second Amendment) Bill, 2025, reinstating tax rebates for full-time teachers and researchers. It ratified decisions from the Cabinet Committee on Privatization (March 11, 2025) and the Economic Coordination Committee (March 13 and 21, 2025). However, it deferred the approval of Solar Net Metering Regulations, opting for broader stakeholder consultations before finalizing recommendations. Prime Minister Shehbaz Sharif emphasized that Pakistan’s economic policies are aimed at long-term stability and sustainable growth, urging national unity in the pursuit of prosperity.