The federal government is considering a major reduction in the buyback rate for solar net metering — from Rs22 per unit to around Rs11.30 per unit — after official estimates revealed that the scheme is adding a financial burden of up to Rs2 per unit on grid electricity consumers, The News reported.
According to Power Division data, the rapid adoption of rooftop solar systems caused a drop of 3.2 billion units in grid electricity sales during FY2024, leading to Rs101 billion in lost revenue for power distribution companies. This loss prompted an average tariff increase of Rs0.9 per kWh for non-solar users to recover costs.
Projections warn that if the current trend continues, solar-based generation could displace 18.8 billion units of grid sales by FY2034, creating a Rs545 billion impact and pushing consumer tariffs up by Rs5–6 per unit.
Officials said the matter has drawn the prime minister’s direct intervention, who at a meeting on October 22 directed the Power Division and Nepra to “review and verify” the existing buyback rate and its effects before implementing any policy changes.
“The system is effectively being used as a battery for solar consumers,” an official said, explaining that solar users sell excess power at Rs22 per unit while avoiding fixed charges, leaving grid consumers to bear infrastructure costs.
New utility-scale solar projects are being contracted at below Rs10 per unit, which officials say exposes a pricing imbalance. The Power Division has therefore proposed revising the net metering buyback rate to Rs11.30 per unit to reflect current market economics and prevent further tariff hikes for grid-connected users.
The country’s installed solar net metering capacity has reached an estimated 6,000MW, and officials caution that the system is creating operational challenges, particularly during winter months when national demand drops to 8,000–9,000MW, raising risks of daytime power surpluses.
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