Govt to Present New Solar Panel Policy to ECC for Approval

Federal Minister for Power Division, Sardar Awais Ahmad Khan Leghari, has announced that a proposal for a new solar panel policy will soon be submitted to the Economic Coordination Committee (ECC) for approval. Under the proposed policy, the national grid will purchase electricity generated from newly installed rooftop solar panels at a rate of Rs. 9.50 to Rs. 10 per unit. This initiative is expected to allow consumers to recover their investment in solar panels within 4-5 years, making it an attractive option for both residential and commercial users, claimed the Minister. Speaking on Geo News’ program, the minister assured that the government would continue to honor existing contracts for previously installed rooftop solar panels, which supply electricity to the grid at a rate of Rs. 27 per unit. However, he warned that if the current system remains unchanged, the increasing burden of net metering could cost consumers an additional Rs. 600 billion annually, raising electricity prices by Rs. 5-6 per unit. The minister also addressed the issue of circular debt, which he said had grown by Rs. 1,580 billion during the previous PTI government. However, he noted that the last PDM government and the current administration have successfully stabilized the circular debt. While it increased by Rs. 80 billion last year, the government expects to reduce it this year through improved management of distribution companies (DISCOs) and savings from lower discount rates. Leghari explained that out of the Rs. 2,400 billion circular debt, some payments are owed to government power plants, but these will not incur interest. Additionally, the government has renegotiated contracts with independent power producers (IPPs), waiving late payment surcharges amounting to Rs. 460 billion. Further relief is expected as more IPP contracts are revised. To address the circular debt, the government is negotiating with commercial banks to secure a Rs. 1,200 billion loan, which will be repaid over 5-6 years using the existing surcharge of Rs. 2.83 per unit on electricity bills. The minister assured that no additional surcharge would be imposed for this repayment. The minister also revealed that the government has already secured a relief of Rs. 3.50 per unit through revised IPP contracts, with further reductions anticipated as negotiations with additional IPPs progress. He added that the International Monetary Fund (IMF) has not raised objections to the proposed tax cuts on electricity and has shown confidence in the government’s commitment to power sector reforms.