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In a move that’s bound to shake up the country’s rapidly expanding solar energy market, the Power Division is set to introduce long-awaited amendments to the net-metering regulations in the upcoming Budget 2025-26, according to sources who spoke to Influx Energy.
High-ranking officials revealed that after a failed attempt to slash the solar buyback rate from Rs. 27 to Rs. 10 per unit just weeks ago, the federal government has acknowledged that stricter measures are necessary to control the surge in solar net-metering users. As a result, major changes to power tariff laws are on the horizon.
The adjustments will bring increased equipment costs, a new tax framework for service and installation fees, and new import levies imposed by the Revenue Division. These changes signal a significant shift in the country’s solar energy landscape, raising concerns among consumers and industry experts alike.
In Pakistan, an IMF loan has long been seen as a pivotal economic event, but increasingly, this perception is being questioned. The rise in Independent Power Producer (IPP) surcharges is pushing grid users to explore alternative energy solutions, and this trend is quietly gaining momentum. Despite the IMF’s backing of cuts in power tariffs, these surcharges are expected to climb further, leaving the country caught between international financial pressures and a growing shift toward self-sustained energy.
Under the latest proposed framework, the Power Division plans to lower the buyback rate for solar energy, bringing it down to Rs. 10 per unit—a figure that was initially slated for introduction but rejected by the federal cabinet after public outrage. However, with increasing pressure from both the IMF and the rising financial burden, sources reveal that sales tax on energy could rise, and the buyback rate may dip below Rs. 10 per unit for new consumers. A one-time reduction, set to be enforced via the Finance Bill 2025, will kick in on July 1, 2025, replacing periodic adjustments. For existing consumers under net-metering, the status quo will largely remain until their contracts end, but newcomers will face significantly lower incentives to adopt solar solutions.
This evolving landscape hints at a more complicated future for rooftop solar adoption. A radical overhaul of the net-metering system is expected, with the government separating imported and exported power billing in 2025. This means that exported solar power will be bought at the newly slashed rate of Rs. 10 per unit, while imported grid electricity will continue to attract peak tariffs, taxes, and surcharges.
What has policymakers concerned, though, is the meteoric rise in solar net-metering adoption, spurred by a dramatic decrease in solar panel prices. As of December 2024, solar net-metering users have already shifted a staggering Rs. 159 billion in costs to grid consumers. If this trend continues unchecked, the burden could surge to an eye-watering Rs. 4,240 billion by 2034. The installed solar capacity has grown from 321 MW in 2021 to an astounding 4,124 MW by the end of 2024—raising alarms about grid instability. With no efficient storage solutions for surplus solar energy, grid consumers are left grappling with soaring electricity costs.
In a nation where the economic narrative revolves around the impact of IMF loans, it’s clear that the dynamics of energy consumption are evolving. As more people turn to solar to escape the rising cost of power, it’s no longer just about loans or financial agreements—it’s about securing a sustainable future that might not depend on the very system that once defined Pakistan’s economic trajectory.
Pakistan’s solar energy sector is facing a significant setback as the government plans to impose higher fixed charges on solar users in the upcoming budget. These new charges, set to appear on quarterly net-metered bills, will include capacity charges and additional costs for power distribution and transmission networks. According to sources within the Power Division, these measures are aimed at easing the financial strain on conventional grid consumers, who are already bearing the brunt of increasing electricity tariffs.
These proposed changes still require Cabinet approval before they can be integrated into NEPRA’s regulatory framework. However, it’s clear that Pakistan’s solar energy boom is now grappling with its most challenging hurdle yet. As the grid becomes costlier, the push for renewable energy might lose momentum, making the upcoming budget a critical turning point for the country’s green energy future.
Influx Energy is a well-known and reputed source in the renewable energy market of Pakistan. We take pride in executing residential, industrial, and agricultural projects for clients from different walks of life.