The Pakistani government drastically reduced the repurchase rate for solar net metering electricity from Rs27 per unit to barely Rs10 per unit, which is a blow to solar users.
Tens of thousands of consumers now face severe losses and uncertainty over the future of their investments as a result of the harsh decision made by the Cabinet’s Economic Coordination Committee (ECC).
The increased repurchase rate will be applied to all exported solar electricity under the new net metering regulation, which will have a significant effect on people who intend to save money on solar energy. The action was taken in reaction to the fast-growing number of solar metering users, which is placing a financial burden on grid users.
The Sharif-led administration decided to shield grid customers from mounting financial strain as the number of solar net-metering subscribers climbed to over two lac eighty thousand.
Those who invested in solar energy expecting higher returns are reportedly suffering significant losses as a result of these buyback rate reductions. With the higher rate perhaps making solar power a less appealing option for future buyers, many consumers are already doubting whether solar energy’s financial viability is sustainable.
Existing contracts under the 2015 NEPRA Distributed Generation and Net Metering Regulations will not be impacted by the updated framework, but future solar installations and new users will pay a lower rate.
Additionally, it is anticipated that the reduction in the net metering rate will slow the expansion of the solar energy industry, which has been flourishing as a result of a steep drop in the cost of solar panels. The government’s attempt to reduce costs may come at the price of solar users’ hard-earned investments, as the financial burden of Rs159 billion has already been transferred to grid consumers.
Many critics contend that users of solar net-metering, particularly those in large cities where solar systems proliferated, are impacted by legislative changes. Solar users are furious over the government’s move to lower the repurchase rate; some worry that it would deter further clean energy investments and jeopardize the nation’s renewable energy targets.
The ECC approved significant policy changes, such as limiting the hosting capacity of transformers and feeders according to studies by Distribution Companies. Any excess electricity exported will be credited toward future bills but cannot be cashed out.
New standards for inverters will require real-time grid interaction, anti-islanding protection, and remote monitoring. The capacity for distributed generation must not surpass the approved load, with penalties for exceeding the limit. Additionally, the net-metering contract period has been shortened from seven years to five.
