Govt plans to slash solar net metering buyback rates by 50%

The Pakistani government is planning to significantly reduce the rates paid to consumers who generate solar power through net metering. Net metering allows solar power users to send excess electricity back to the grid and get paid for it.

The Power Division is working on changes to achieve this reduction. These changes will be proposed to the National Electric Power Regulatory Authority (NEPRA) in July. The proposed changes include:

  1. Directing Net Metered Power to the National Grid: All excess power generated through net metering will go directly to the national grid.
  2. Introducing Capacity Charges: New charges will be introduced for users of net metering.

Impact on Buyback Rates

One of the major changes being considered is a 50% cut in the buyback rate for net-metered power. This means that solar power users will be paid less for the excess electricity they send to the grid. As a result, the time it takes for solar power investments to pay off will increase from three years to seven years.

Financial Stability

This adjustment is seen as necessary to maintain financial stability in the energy sector. Currently, net metering contributes 2000 MW to the National Grid, and the number of solar power users has increased from 55,000 to 120,000 in the past year.

Additional Costs

The shift of large users from the traditional grid to net metering has added a cost of Rs 2 per unit for other consumers. If the current rate continues, this cost could increase by up to Rs 350 billion next year.

The Power Division’s goal is to reduce the financial burden on a larger number of consumers by adjusting the net metering rate.

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