PM orders Nepra appeal to save solar user contracts

Prime Minister Shehbaz Sharif underscored the importance of safeguarding existing solar contracts during a high-level special meeting held today in Islamabad to address new regulatory changes imposed by the National Electric Power Regulatory Authority (Nepra). The move, which came into effect on Monday, has sparked significant controversy and criticism from various quarters, including politicians, energy experts, and former officials.

Under the Prosumer Regulations 2026, Nepra has eliminated the exchange of electricity units in solar net metering. Instead, a new net billing framework is being implemented, drastically altering how electricity producers are compensated. The current buyback rate for solar-generated net generation stands at Rs25.9 per unit and may be reduced to as low as Rs11 per unit. Additionally, the contract period has been shortened from seven years to five years.

Moreover, solar consumers will now bear the financial burden of capacity payments for excess electricity generated above one megawatt capacity, which is then sold back to them at the applicable consumer tariff. The change effectively brings an end to the long-standing one-to-one net metering system, where producers were compensated directly by distributors based on their actual consumption.

The Prime Minister’s Office issued a statement emphasizing that this move would not unfairly burden over 37.6 million consumers reliant solely on the national grid. Instead, efforts are being made to develop a comprehensive plan within the Power Division to mitigate any potential impact on solar users.

At present, utilities must purchase excess electricity from prosumers at the national average energy purchase price and sell it back to them at the applicable consumer tariff. This shift in policy is expected to fundamentally alter how electricity producers are compensated under Nepra’s (Prosumer) Regulations, 2026, which were recently implemented.

The controversial move comes amidst ongoing debates over whether Nepra has overstepped its regulatory authority by overturning decades-old net metering policies. Power Minister Awais Leghari defended the decision, stating that it was part of the regulator’s role to update laws and constitutional requirements as necessary.

Despite these assurances, concerns persist among solar users about how they will be affected by these sweeping changes. Under the new regulations, existing consumers are exempt from the policy until their contracts expire, at which point they may be moved to the revised framework. The government has assured solar installers that electricity purchases would continue at a future revised rate.

As the nation grapples with these regulatory shifts, stakeholders remain divided regarding their long-term implications for solar energy adoption and overall power sector efficiency. The Prime Minister’s directive signals an important step in ensuring existing contracts are protected, but broader questions about the policy’s impact on renewable energy investment persist.