Net Metering in Pakistan: Practical Reforms to Protect Consumers and Strengthen the Power Sector

Introduction: Net Metering Is Not the Real Problem

Pakistan’s power sector is facing a serious crisis due to rising capacity payments, declining electricity demand, poor billing recovery, and outdated infrastructure. As a result, net metering in Pakistan has come under increasing pressure.

However, rooftop solar and net metering are not the root cause of the power sector’s financial losses. In fact, net metering helps reduce peak demand, lowers transmission and distribution losses, and decreases dependence on imported fuel.

Instead of weakening solar policies, Pakistan needs practical net metering reforms that protect consumers while strengthening the power sector.

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1. Protect Unit-to-Unit Adjustment for Net Metering Consumers

The foundation of solar net metering in Pakistan is unit-to-unit adjustment. Consumers invested in rooftop solar systems with the assurance that exported electricity would be adjusted against imported units.

Changing this rule would:

• Destroy investor confidence
• Slow down rooftop solar adoption
• Damage regulatory trust

The government should not interfere with unit-to-unit adjustment, as it remains essential for the growth of renewable energy in Pakistan.

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2. Buy Back Surplus Solar Units at Zero Cost

To address revenue concerns of DISCOs, the government may purchase surplus solar units beyond unit-to-unit adjustment at zero cost.

This approach:

• Reduces financial burden on utilities
• Discourages oversized solar installations
• Maintains grid stability during low-demand hours

From a power system perspective, excess daytime solar energy often has minimal market value, making this a rational solution.

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3. Introduce Fixed Quarterly Charges Instead of Penalizing Solar Units

Rather than cutting buyback rates or changing net metering formulas, a fixed non-adjustable quarterly charge of around PKR 10,000 can be introduced for net metering consumers.

This allows utilities to recover:

• Grid maintenance costs
• Capacity payment obligations
• Infrastructure availability expenses

A transparent fixed charge is fairer and more sustainable than reducing the value of solar energy exported to the grid.

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4. Set Net Metering License Validity to Five Years

Net metering licenses should be issued with a five-year validity period, subject to renewal.

This enables:

• Policy review
• System performance monitoring
• Better regulatory control

License renewal should remain straightforward to ensure long-term confidence in Pakistan’s solar policy.

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5. Limit Net Metering to 80% of Transformer Capacity

For grid safety and reliability, net metering connections should not exceed 80% of transformer capacity.

This technical limit helps prevent:

• Reverse power flow issues
• Voltage instability
• Transformer overloading

Such limits are already common in international renewable energy best practices.

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6. Focus Power Sector Reforms Beyond Net Metering

Targeting net metering alone will not fix Pakistan’s electricity crisis.

The real challenges include:

• Electricity theft
• Corruption
• Poor billing and recovery
• Inefficient DISCO management
• Aging transmission and distribution infrastructure

Losses from these issues are far greater than any impact caused by net metering consumers. Real reform must start here.

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Conclusion: Smart Net Metering Reforms Can Strengthen Pakistan’s Energy Future

Net metering consumers are contributing to Pakistan’s energy security — not weakening it.

With:

• Protected unit-to-unit adjustment
• Zero-cost surplus buyback
• Fair fixed charges
• Technical grid limits
• Broader power sector reforms

Pakistan can strengthen its power sector without killing rooftop solar.

Balanced renewable energy policies will ensure:

• Investor confidence
• Grid stability
• Reduced fuel imports
• Affordable electricity for consumers