The Federal Government has made a final decision to abolish the Net Metering system for solar installers and replace it with a gross billing policy. For the implementation of this decision, power regulator, NEPRA, has formally issued draft rules.
Deviating from established procedures, NEPRA has not announced any date for a public hearing this time. It is quite possible that after ten years, Pakistan will be the first country to end the net metering after such a short period while neighbouring countries are not only promoting net metering but, in some cases, even allowing neighbours to sell excess electricity to each other.
What is net metering? Under net metering, if a home, shop, or office had a solar system installed, any excess electricity generated during the day was fed back into the grid. When needed, the consumer could draw the same number of units from the grid.
Imported (consumed) and exported (supplied to the grid) electricity units were adjusted at the same rate. This is why millions of consumers, who could no longer bear the ever-increasing electricity prices, were increasingly attracted towards installing solar systems.
Why did the ministry of energy recommend ending net metering? According to officials of the Ministry of Energy, net metering was causing electricity generation companies losses worth billions of rupees, and grid and system costs were not being recovered.
However, on 18th November 2025, Central Power Purchasing Agency (CPPA) CEO Rehan Akhtar while testifying before the NEPRA said that while solar generation is increasing, but this does not have a significant impact on the grid.
According to him, the energy costs had led to a shift to solar power. “They are now consuming more due to solar availability but their offtake from the national grid has not changed. Their withdrawal from the grid is almost stable. They are drawing the same quantities they were drawing earlier,” he said, adding, however, the same could not be predicted about the future.
In fact, the real issue lies in poor government policies, due to which the government is required to make capacity payments amounting to millions of dollars without consuming electricity. The burden of these flawed policies and decisions is now being shifted onto solar users. NEPRA’s decision will reduce the installation of solar systems, which will negatively impact the environment. Unfortunately, the Ministry of Climate Change remains a silent spectator.
What is the new gross billing system? Under the new system, instead of net metering, electricity imported from the grid will be charged at the national tariff (for example, Rs 55 to 65 per unit). Electricity exported from solar systems to the grid will be paid not at the current Rs 24 per unit of National Average Purchase Power Purchase Price (NAPPP), but at around Rs 9 per unit of National Energy Power Purchase Price (NEPPP). Imported and exported units will no longer be netted off against each other; instead, they will be calculated separately, meaning a gross billing system will be enforced.
Ironically, due to flawed policies of officials, the government on the one hand will continue for nearly the next ten years to purchase electricity from solar IPPs at rates exceeding Rs 49 per unit (in dollar terms) and, on the other, solar users will be pushed toward installing batteries, thereby storing excess electricity for personal use rather than selling it cheaply to the grid. At the same time State Bank will be forced to spend millions of additional dollars on importing batteries because of this decision.
What could be the solution? Every Pakistani takes pride in the fact that Prime Minister Shehbaz Sharif has repeatedly emphasized the need to promote solarization. Therefore, to avoid shattering of his vision, the writer respectfully requests the Prime Minister to direct NEPRA not to alter the existing system but, instead, introduce a national carbon emission (CO₂) policy. Under such a policy, net metering consumers could transfer their carbon credits to DISCOs, which could then sell them in international markets to improve their financial indicators.
According to an international survey, Pakistanis are among the most generous people in the world in terms of donations (Zakat and charity). Hence, the Prime Minister is once again requested to intervene and halt NEPRA’s action and simultaneously issue directives to establish “Digital Electricity Units Trust” (DEUT) in every major city.
Through these Trusts solar units voluntarily contributed by solar system installers could be digitally transferred from DISCOS to Not for Profit Organizations who will then pass these on to deserving households, especially to widows, through a well-defined policy and mechanism thereof.
Copyright Business Recorder, 2025
The writer is a former MD of the Karachi Stock Exchange, Chairman of CDC, President of OICC&I and one a founder of Group “Save the Planet via Green Energy”