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The federal government is preparing to overhaul Pakistan’s solar energy framework by replacing the current net metering system with gross metering, a move that could significantly change how households and businesses with solar panels interact with the national grid. A draft policy laying out this transition is nearing completion and is expected to be sent to the federal cabinet for approval after review by the National Electric Power Regulatory Authority (NEPRA).
What Is Changing: Net Metering vs. Gross Metering
Under the existing net metering system, consumers with rooftop solar panels can offset their electricity bills by sending excess energy back to the grid. For every unit they export, they receive credits, which are deducted from the electricity they consume from the grid.
However, under the proposed gross metering model, all electricity produced by solar panels will be sold to the national grid at a predetermined rate. Consumers will no longer be able to directly offset their own electricity usage. Instead, they will sell all the power they generate and pay separately for the electricity they consume from the grid.
This is a fundamental shift in how solar users will be compensated and is likely to have a major impact on investment decisions in rooftop solar systems.
Proposed Buyback Rate: Rs. 11.33 Per Unit
One of the most contentious parts of the new policy is the proposed solar buyback rate of Rs. 11.33 per unit—a sharp reduction from the current net metering rate of around Rs. 27 per unit. This represents a decrease of nearly 60 percent.
The policy also suggests that future solar buyback rates should be linked to one-third of the national electricity tariff, which would make Rs. 11.33 the baseline rate for solar exports going forward. This formula would ensure that as grid electricity prices rise, solar buyback rates increase proportionately—but remain significantly lower than full retail prices.
Impact on Existing Solar Users
A key detail in the proposed policy is that existing net metering users will not be affected. They will continue to receive payments at the current net metering rate for the duration of their existing agreements, which are typically valid for 7 to 10 years.
This grandfathering clause is likely to be welcomed by current solar users who made financial decisions based on the higher return on investment that net metering offered.
Why the Change? Financial Burden on the Grid
Government officials argue that the current net metering regime has created a disproportionate financial burden on other electricity consumers. According to the Power Division, the system has cost the national exchequer approximately Rs. 159 billion, with Rs. 103 billion of that coming from higher prices paid to solar users.
Because solar users are typically among higher-income households who can afford the initial investment, the government contends that net metering shifts the cost burden onto lower-income consumers who cannot afford solar installations.
By moving to gross metering and reducing the buyback rate, the government hopes to make the cost of renewable energy more equitable across all segments of society.
Target: 8,500 MW of Solar Capacity
Despite the reduction in incentives, the government still aims to expand solar energy production significantly. The new policy outlines an ambitious target of adding up to 8,500 megawatts (MW) of solar energy to the national grid under the gross metering system.
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Officials believe that with better planning and lower financial incentives, solar power can still grow while placing less strain on the national budget and electricity consumers.
Reactions from the Solar Industry
Industry experts and solar companies have expressed concern over the proposed shift. Many argue that gross metering with such a low buyback rate will reduce the financial viability of rooftop solar investments, especially for middle-class consumers.
Some have called for a more balanced approach that considers the environmental and long-term economic benefits of solar power, urging the government to ensure that the transition does not discourage renewable energy adoption.
What Happens Next?
The draft solar policy is currently under review by NEPRA, which must approve the proposed changes before it can be forwarded to the federal cabinet. If approved, the new gross metering system could be rolled out within months, marking a significant pivot in the country’s renewable energy direction.
