Massive Change Coming for Solar Users, Govt’s New Plan Could Cut Your Savings in Half

The government is considering a major revision to the solar net metering regime by reducing the buyback rate from Rs. 22 per unit to around Rs. 11.30. It follows concerns that the current policy is pushing up electricity costs for consumers on the grid. Officials say the financial strain has grown sharply as rooftop solar installations surge across the country, reported a national daily. In FY2024 alone, grid sales fell by 3.2 billion units, resulting in Rs. 101 billion revenue loss to power distribution companies. This gap translated into a tariff increase of nearly Rs. 1 per unit for traditional electricity users. Power Division projections show the impact widening rapidly over the next decade. By FY2034, lost sales could hit 18.8 billion units, costing up to Rs. 545 billion and potentially adding Rs. 5 to Rs. 6 per unit to grid tariffs according to the official projections. A senior official said the situation has triggered direct intervention from the prime minister, who on October 22 directed the Power Division and Nepra to re-evaluate the buyback tariff and its broader effects before announcing any reforms. Officials argue that the system is being treated as a “free storage battery” by many households. Consumers sell excess electricity back to the grid at high rates while avoiding fixed system charges. This leaves non-solar users carrying the financial burden of network maintenance. The government notes that new large-scale solar projects are being contracted at below Rs. 10 per unit, strengthening the case for a lower net metering rate. Aligning rooftop tariffs with current costs, officials say, is essential to protect affordability for grid-connected consumers. The rapid growth of net-metered capacity which is now estimated at 6,000MW, is also creating operational challenges. In winter months, national demand drops to around 8,000 to 9,000MW, raising the risk of excess daytime generation and grid instability.