Govt Once Again Ready to Consider Reducing Solar Buyback Rate

The Power Division will resubmit its proposal to the Economic Coordination Committee (ECC) to amend Net-Metering Regulations and reduce solar energy buyback rates. The Cabinet Division has allowed resubmission of this proposal, reported Business Recorder. The ECC had approved the proposal on March 13, 2025, but the Federal Cabinet deferred it in favor of seeking consultation. With that condition now fulfilled, the Cabinet Division has advised resubmission. The proposal seeks to cap net-metering contracts at five years and reduce buyback rates from Rs 27 to Rs 10 per unit. The Power Division reports that net-metering reduced FY24 energy sales by 3.2 billion kWh and caused a Rs. 101 billion burden and a Rs. 0.9/kWh tariff hike for other users. By FY34, projected reductions of 18.8 billion kWh could add Rs. 545 billion in cost, increasing average tariffs by Rs 3.6/kWh. The IGCEP 2025 includes 8,000 MW of net-metering additions by FY34, which the Division warns may distort least-cost power planning. Separately, the Power Division has requested World Bank support for a nationwide rooftop solar assessment. The Bank has agreed to assist through the Electricity Distribution and Efficiency Improvement Project (EDEIP).