PM Shehbaz Orders Urgent Review of Proposed Solar Net Metering Rate Cut

The federal government is moving to cut the buyback rate for solar net metering by nearly half, as Prime Minister Shehbaz Sharif directs regulators to expedite a review of the proposed tariff. The Power Division has proposed reducing the rate paid to consumers who sell surplus solar power to the grid from Rs. 22 per unit to about Rs. 11.30, citing the financial burden on other electricity users. The directive, issued at a high-level meeting on October 22, calls for the Power Division and the National Electric Power Regulatory Authority (NEPRA) to verify the new rate and assess its impact before finalizing reforms, according to Business Recorder. The government is also reviewing all existing net metering contracts to determine if buyback rates can be legally revised without breaching agreements. New standard contracts are being drafted to align with a proposed Net Billing framework for future customers. Officials say the rapid expansion of rooftop solar has reduced grid sales by 3.2 billion kWh in FY2024, adding Rs. 101 billion in costs for other consumers and raising average tariffs by Rs. 0.9 per kWh. Projections show the impact could intensify, with sales reductions reaching 18.8 billion kWh and an added burden of Rs. 545 billion by FY2034. The government’s long-term power plan anticipates over 8,000 MW of net metering capacity by FY2034, a “forced addition” that could undermine least-cost expansion strategies. Grid operators have also reported operational stress during periods of high daytime solar generation, at times forcing the restoration of high-loss feeders to maintain system stability. The move to revise net metering rates comes after an earlier proposal to set the buyback rate at Rs 10 per unit was shelved due to cabinet opposition. The Prime Minister has now ordered a fresh round of consultations and a robust public communication strategy to explain the changes.