Government considers reducing solar net metering rates by Rs10 per unit

According to a report by Business Recorder, the government is contemplating a significant reduction in the rates paid to consumers generating solar power through net metering, sparking concerns and potential criticism.

The move comes amidst a surge in solar power adoption in Pakistan, with installed capacity reaching 3,000 megawatts.

Currently, net metering users receive Rs21 per unit for surplus electricity fed back into the grid. However, the government is considering slashing this rate to Rs11 per unit, which would result in a loss of Rs10 per unit for solar power generators.

The rationale behind the proposed reduction lies in the financial strain caused by capacity charges paid to Independent Power Producers (IPPs), regardless of actual electricity purchase.

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Although the government affirms its support for solar energy, it deems the current net metering rate unsustainable, aiming to extend the payback period for solar panel installation costs from 18 months to 10 years.

Officials argue that consumers primarily install solar systems for personal use, suggesting that the buyback rate for surplus electricity should align with the purchasing power of power distribution companies or discos.