Govt to Make it Harder to Get Solar Panel Systems and Net-Metering After Budget 2025-26

In a move set to rattle the country’s growing solar energy consumers, the Power Division will push forward with long-dreaded amendments to net-metering rules in the upcoming Budget 2025-26, sources confirmed to ProPakistani. Top officials said that after failing a few weeks ago with bringing the solar buyback rate to Rs. 10 from Rs. 27 per unit, the federal government has realized that it cannot control the increasing number of solar net-metering consumers without making some big changes in power tariff laws. Equipment fees will rise, a new tax structure will be implemented on service and installation charges, while imports will be levied with a standard fee through the Revenue Division, sources added. Grid users are slowly but silently shifting to alternative energy to escape soaring Independent Power Producer (IPP) surcharges. These charges are set to climb even higher, despite the International Monetary Fund’s willingness to slash power tariffs across the board. Under the revised framework, the Power Division will hammer down the buyback rate from the National Average Power Purchase Price (NAPP) to Rs. 10 per unit—a figure that was earlier planned for implementation but rejected by the federal cabinet after severe backlash from the public. Sources said sales tax will increase and the buyback rate will likely fall below Rs. 10 per unit for new users. Instead of periodic adjustments, the National Electric Power Regulatory Authority (NEPRA) will be allowed to enforce a one-time cut through the Finance Bill 2025, slashing rates effective July 1, 2025. Sources maintained that existing net-metering consumers with valid licenses, agreements, or regulatory concurrences will remain shielded from the changes until their contracts expire, sources confirmed. However, newcomers to the system will be offered drastically reduced buyback incentives. Rooftop solar adoption will get more complicated next fiscal year, sources added. A drastic overhaul of the net-metering settlement mechanism is the only way it seems. The government will separate imported and exported units for billing as planned in February 2025, meaning exported solar power will be purchased at the slashed Rs. 10 per unit rate, while imported grid electricity will be billed at standard peak and off-peak tariffs stacked with taxes and surcharges. Sources disclosed that the government is increasingly alarmed by the record drop in solar panel prices, which has triggered an explosion in net-metering adoption. As of December 2024, solar net-metering consumers had shifted a staggering Rs. 159 billion burden onto grid consumers—a figure projected to balloon to a jaw-dropping Rs. 4,240 billion by 2034 if left unchecked. Installed capacity has surged from just 321 MW in 2021 to a massive 4,124 MW by the end of 2024, fueling government fears over worsening grid instability. Officials say that with no way to store surplus solar energy, grid consumers are left bearing the brunt of rising electricity costs. As part of the budget exercise, solar users will likely be slapped with a higher fixed charge component in the new budget on their quarterly net-metered bills. This will include capacity charges and additional costs linked to power distribution and transmission networks. Power Division sources said that these measures are crucial to offsetting the pressure on conventional grid consumers, who bear the brunt of our tariff adjustments. The proposed changes will require Cabinet approval before NEPRA integrates them into its regulatory framework. However, the writing is already on the wall—Pakistan’s solar boom is facing its biggest challenge yet. While sources can only reveal so much, the upcoming budget exercise will be a tough one for renewable energy.