Prosumer regulations

Pakistan’s net-metering policy was introduced with a clear and noble objective: to accelerate the adoption of distributed renewable energy, reduce dependence on imported fuels, and empower consumers to generate clean electricity for self-consumption.

By that measure, the policy has been an undeniable success. In less than a decade, Pakistan witnessed an unprecedented rooftop solar revolution, placing it among fast-growing distributed generation markets globally. Since 2015, the power sector added nearly 20 GW of centralized generation capacity alongside approximately 33 GW of decentralized capacity (mainly solar PV), effectively eliminating load-shedding caused by generation shortages.

This rapid scale up enabled the emergence of a mature and affordable renewable energy ecosystem across almost every city, supported by widespread availability of equipment, installers, and services. As a result, around 55 percent of electricity generation now comes from clean energy sources, marking a structural shift toward a lower-carbon power mix.

At the consumer level, approximately 450,000 households are connected through net-metered systems, while millions of additional residential, industrial, and agricultural consumers predominantly single-phase users have installed solar PV systems without net metering. Collectively, these outcomes confirm that the Net Metering Regulations 2015 have largely fulfilled their core objectives, successfully mainstreaming distributed solar energy in Pakistan.

However, as with any rapidly scaling intervention, course correction is not only natural; it is necessary. Countries that pioneered rooftop solar, including Australia, California (USA), and Germany, have all recalibrated their net-metering regimes over time. These jurisdictions learned that while generous buyback mechanisms are effective in early adoption phases, they can create financial, technical, and equity distortions if left unchecked. Pakistan has now reached a similar inflection point.

The government’s perspective: transition with justice

The government remains fully committed to solarization, but with technical, financial and regulatory discipline. Clean energy transition must be “JUST”, meaning one group of consumers should not subsidize another. Using the grid as a “bank” for monetary arbitrage was never the intent of net metering. Distributed generation systems are meant for self-consumption, not profit maximization.

The grid provides 24/7 backup and balancing services, which carry real costs. When these costs go unpaid, they are transferred to non-solar consumers. The revised framework ensures that the grid is used as a network, not as free storage while allowing solar growth to continue responsibly.

The business perspective: evolution, not decline

Concerns that solar businesses will suffer are misplaced. There has been no sudden policy shift; signals for the net metering reform have been evident since 2023. Keeping this in view globally and locally, the solar industry is already evolving toward battery energy storage systems (BESS). Hybrid inverter sales (locally) are rising, solar panel imports have continued to grow in Pakistan and consumers are installing larger systems paired with storage. As technology matures, profit margins naturally compress but market depth expands. More installers, better products, and smarter systems point to a stronger, not weaker, solar ecosystem. With these changes consumers will shift to hybrid inverters and lithium batteries which will increase the sales of solar vendors. Additionally, such batteries would need to be charged by solar panels, thereby further boosting solar panel sales. Therefore, this notion of business being impacted is incorrect.

The consumer perspective: impact is limited and targeted

The notion that most consumers will be affected is incorrect. Out of 39 million electricity consumers, over 90% are single-phase users (35mplus), untouched by the proposed changes. Industrial consumers above 1 MW load are also unaffected and the majority of agricultural consumers have historically not opted for net metering.

In practice, approximately 460,000 existing prosumers will see an adjustment, primarily that electricity bills may no longer be zero. In future as well, less than half a percent of overall consumer will be impacted.

Correcting financial and technical imbalances

Solar generation costs have declined sharply from around 14 US cents per unit in 2015 to even less than US 3 US cents since past few years yet buyback rates remained disproportionately high. This correction addresses a real anomaly where daytime solar energy costing PKR 10–12 per unit was being compensated at PKR 60 per unit, creating a substantial annual burden on other consumers. Additionally, unrestricted daytime exports increase night-time peak demand, forcing planners to add capacity that remains idle for much of the year.

Lower buyback rates are not anti-solar; they are price signals encouraging self-consumption, battery adoption, and grid stability. Coupled with smart meters, hybrid inverters, capacity compliance, and enhanced monitoring, the new prosumer regulations align incentives with system realities.

Pakistan’s solar journey is far from over. These reforms do not halt the solar revolution; they mature it, they increase and transform the business growth opportunities of renewable industry ensuring that clean energy growth remains sustainable, equitable, and resilient for the entire power system.

Copyright Business Recorder, 2026