Nepra Proposes New Rules to Cut Solar Net Metering Benefits

The National Electric Power Regulatory Authority has released draft regulations proposing major changes to the solar net metering system, including lower payments, smaller system sizes and shorter contracts, and has invited public feedback within 30 days. The draft Prosumer Regulations, 2025, will replace the existing net metering rules introduced in 2015. Nepra said the changes are aimed at protecting the power system while still allowing consumers to use solar energy to reduce their electricity bills. Under the proposed rules, consumers will no longer be allowed to install solar systems larger than their approved electricity load. This means a consumer with a 10-kilowatt load will only be allowed to install a 10-kilowatt solar system. At present, consumers are allowed to install solar systems up to one and a half times their approved load. Existing net metering consumers will not be affected immediately. They will continue under the current rules until their seven-year contracts expire. After that, the new rules will apply. Nepra has also proposed reducing the contract period for new net metering connections to five years instead of seven. Any extension beyond five years will depend on mutual agreement between the consumer and the power distribution company. Another major change is a sharp cut in the rate paid for excess electricity supplied to the grid. Under the draft, consumers will be paid the National Average Energy Purchase Price, estimated at around Rs. 13 per unit, compared to the current rate of about Rs. 26 per unit. t Nepra recently said that high electricity prices, taxes, and surcharges have pushed many consumers towards solar power. The regulator noted that grid-connected solar capacity has crossed 6,000 megawatts, while total solar capacity in the country has exceeded 13,000 megawatts. The draft regulations also place limits at the local level. Distribution companies will not accept new net metering applications if solar generation connected to a transformer reaches 80 percent of its capacity, citing safety and system stability concerns. For larger solar systems of 250 kilowatts or more, applicants will be required to submit technical studies to ensure the grid can handle the additional load. Power companies will have set timelines to review applications, issue cost estimates, and complete connections. Nepra said the proposed changes are meant to keep the electricity system stable while allowing people to benefit from solar power. Public comments have been invited before the draft rules are finalized.