AIRLINK 81.10 Increased By ▲ 2.55 (3.25%)
BOP 4.82 Increased By ▲ 0.05 (1.05%)
CNERGY 4.09 Decreased By ▼ -0.07 (-1.68%)
DFML 37.98 Decreased By ▼ -1.31 (-3.33%)
DGKC 93.00 Decreased By ▼ -2.65 (-2.77%)
FCCL 23.84 Decreased By ▼ -0.32 (-1.32%)
FFBL 32.00 Decreased By ▼ -0.77 (-2.35%)
FFL 9.24 Decreased By ▼ -0.13 (-1.39%)
GGL 10.06 Decreased By ▼ -0.09 (-0.89%)
HASCOL 6.65 Increased By ▲ 0.11 (1.68%)
HBL 113.00 Increased By ▲ 3.50 (3.2%)
HUBC 145.70 Increased By ▲ 0.69 (0.48%)
HUMNL 10.54 Decreased By ▼ -0.19 (-1.77%)
KEL 4.62 Decreased By ▼ -0.11 (-2.33%)
KOSM 4.12 Decreased By ▼ -0.14 (-3.29%)
MLCF 38.25 Decreased By ▼ -1.15 (-2.92%)
OGDC 131.70 Increased By ▲ 2.45 (1.9%)
PAEL 24.89 Decreased By ▼ -0.98 (-3.79%)
PIBTL 6.25 Decreased By ▼ -0.09 (-1.42%)
PPL 120.00 Decreased By ▼ -2.70 (-2.2%)
PRL 23.90 Decreased By ▼ -0.45 (-1.85%)
PTC 12.10 Decreased By ▼ -0.89 (-6.85%)
SEARL 59.95 Decreased By ▼ -1.23 (-2.01%)
SNGP 65.50 Increased By ▲ 0.30 (0.46%)
SSGC 10.15 Increased By ▲ 0.26 (2.63%)
TELE 7.85 Decreased By ▼ -0.01 (-0.13%)
TPLP 9.87 Increased By ▲ 0.02 (0.2%)
TRG 64.45 Decreased By ▼ -0.05 (-0.08%)
UNITY 26.90 Decreased By ▼ -0.09 (-0.33%)
WTL 1.33 Increased By ▲ 0.01 (0.76%)
BR100 8,052 Increased By 75.9 (0.95%)
BR30 25,581 Decreased By -21.4 (-0.08%)
KSE100 76,707 Increased By 498.6 (0.65%)
KSE30 24,698 Increased By 260.2 (1.06%)

The recent buzz around gross metering has reignited discussions on renewable energy, a crucial subject as the world increasingly shifts towards sustainable power sources. With the global commitment to tripling renewable energy pledged at COP28, adopting renewable energy is paramount for sustainable development, particularly in Pakistan.

Our nation grapples with energy shortages and pressing environmental concerns, with renewable energy currently making up only 5% of our energy mix (excluding hydropower).

Pakistan has also set an ambitious target to achieve 60% renewable energy in its energy mix by 2030 to reach net zero emissions.

As of June 30th, 2023, the total number of net-metering consumers in Pakistan surged to around 56,000, marking a 50% increase compared to the previous year (NEPRA + RF calculations).

PERSPECTIVES: Net-metering: turning up the heat on Pakistani people instead of IPPs

Additionally, in fiscal year 2022-23, net metering generated 482 gigawatt-hours, highlighting an impressive 220% year-on-year growth. This figure does not even account for those who are completely off-grid and whose contributions go unmeasured.

To understand the intricacies of our renewable energy landscape, let us break down the three primary metering mechanisms: net metering, gross metering, and net billing.

Net metering allows consumers to utilise the electricity generated by their in-house solar systems.

Any surplus electricity is sent to the grid, and consumers receive credits or monetary compensation at an agreed-upon rate (currently Rs19.32/kWh).

This system offers higher savings, simplified billing, and energy independence. However, it impacts utility revenue and comes with significant infrastructure costs.

Gross metering mandates that consumers sell all the electricity they generate to the grid at a predetermined tariff while buying all their electricity from the grid at the retail rate.

These two transactions (selling and buying) are separate, with no offsetting of generation against consumption.

Consumers are paid a fixed rate for their electricity production but purchase their required electricity at a higher standard rate.

This diminishes the economic benefits of installing renewable energy systems, as the lack of immediate reduction in electricity bills makes the financial payback period longer and less attractive.

OPINION: U-turn on net metering

Managing separate transactions for energy sales and purchases can be complex and introduce uncertainties, especially with fluctuating tariffs and regulatory changes.

This complexity can deter individuals and small businesses from investing in renewable energy, leading to potentially higher overall consumption and less emphasis on energy-saving measures.

Net billing is like net metering but values the excess electricity sent to the grid differently. Under net billing, the energy exported to the grid is credited at a price different from the retail rate, often lower.

The consumer’s bill is then calculated based on net consumption, but the credits are applied at a separate rate.

Net metering has significantly shaped Pakistan’s renewable energy landscape. It incentivises individual investments in solar panels, allowing consumers to reduce their electricity bills and promote a shift to renewable energy.

This approach has not only made solar power more attractive but also helped alleviate the energy crisis by adding more distributed generation capacity to the grid.

PERSPECTIVES: Can aging thermal power plants in Pakistan be revitalised?

The adoption of net metering has encouraged private investment in renewable energy, fostering a market essential for long-term sustainability.

Conversely, gross metering, while guaranteeing a steady income for the electricity generated, disincentivizes energy conservation since consumers buy all their energy at retail rates.

This system can be less appealing to potential investors because it does not provide the direct benefit of reduced energy bills, making the return on investment longer and less predictable.

For Pakistan to effectively transition to renewable energy, policies, and mechanisms must strongly incentivize private and individual investments instead of subsidizing thermal energy.

A recent study claims just that. Policymakers need to carefully consider the implications of these metering systems rather than pressuring people to shift completely off-grid.

If households can afford to install solar panels, they might also invest in batteries to go entirely off-grid.

Policymakers aim to reduce the cost of buying solar energy from consumers, potentially applying such tactics to push them to agree to these terms.

Ensuring support rather than hindrance of renewable energy growth in Pakistan is crucial, considering the international landscape, maintaining stability in the energy market while avoiding further burdens on consumers is essential for a sustainable energy future in Pakistan.

The article does not necessarily reflect the opinion of Business Recorder or its owners

Annam Lodhi

The writer is an independent journalist and communications specialist at Renewables First, focusing on the intersection of gender, energy, and climate change in Pakistan

Comments

200 characters
Builder Jun 03, 2024 05:33pm
Thanks for voicing the concerns of solar energy producing households. Instead of pressurising (rather harassing) net metered consumers, DISCOs should fix their fundamentals.
thumb_up Recommended (0) reply Reply
Tanveer Ahmed Jun 04, 2024 09:04am
Who will bell the cat? The Govt seems to be instrumental in destroying the economic growth to hell the nation.
thumb_up Recommended (0) reply Reply
Tanveer Ahmed Jun 04, 2024 09:04am
Who will bell the cat? The Govt seems to be instrumental in destroying the economic growth to hell the nation.
thumb_up Recommended (0) reply Reply
Tanveer Ahmed Jun 04, 2024 09:29am
Who will bell the cat? The Govt seems to be instrumental in destroying the economic growth to hell the nation.
thumb_up Recommended (0) reply Reply
Safdar Awan Jun 04, 2024 09:55am
I appreciate your article govt should encourage solar user not Strangling them by installing gross meter only 56000 this is 0.3 % out of all electricity users . Gross meter effects on Pakistan eco
thumb_up Recommended (0) reply Reply
TALHA SHAFI Jun 04, 2024 03:45pm
Government should initiate & implement power WHEELING concept (private / individual power producers in small capacities) and get rid of IPPs as soon as possible.
thumb_up Recommended (0) reply Reply
Orion Jun 05, 2024 12:12am
Explained the issue in a simple manner. Sound recommendations but author has been soft on the burecaray and IPPs mafia by not mentioning how they are trying to undermine solar initiative.
thumb_up Recommended (0) reply Reply
Saleem Jun 05, 2024 10:27am
I appreciate and support your write up. We need a Nation wide movement to push consumers demand
thumb_up Recommended (0) reply Reply
Shazia waseem Jun 05, 2024 11:33am
Very nice and informative article. Pret.ty sure the government will be least interested except how they can suck more blood from the masses
thumb_up Recommended (0) reply Reply
Fayyaz Ahmed Jun 05, 2024 01:21pm
Kindly elaborate which one of three mechanisms will be a batter option for consumers?
thumb_up Recommended (0) reply Reply
Saleem Jun 05, 2024 02:42pm
It's the useless governments who pursued expensive Take or Pay contracts with IPPs. Now the burden is being shifted on consumers as if net metering is a crime. Next year, it will be even worse.
thumb_up Recommended (0) reply Reply
Khurshid Jun 05, 2024 04:05pm
Let the Govt make mistake after mistake. Solar energy users have invested life long savings to avoid heavy electricity bills and if govt is set to squeeze these solar users they have other options
thumb_up Recommended (0) reply Reply
Nasrullah Khan Jun 06, 2024 08:59am
Gross metering is musleading term the actual term is feed in tariff which is used for bagasse and ipps the same rates myst be given to solar oriducers
thumb_up Recommended (0) reply Reply
Nadeem Sheikh Jun 07, 2024 07:22am
Please understand the problem I.e. Power theft is rampant, Many entities do not pay their bills and the Capacity Charges to the IPPs. Govt focus should be on the above and not on PV users
thumb_up Recommended (0) reply Reply
Naeemullah Shah Jun 07, 2024 02:08pm
Our problem is DISCOs and IPPs and not net metering. Don’t beat around the the bush, punishing The Solar users will not have any affect on problem resolution.
thumb_up Recommended (0) reply Reply