The government has decided to abolish net metering and replace it with a net billing policy. Under the previous system, electricity units imported from and exported to the grid were balanced one-for-one at comparable retail rates. Under the new policy, electricity drawn from the grid will be charged at the full national tariff, while solar electricity exported back to the grid will be credited at a significantly lower differential rate. The economic impact of this policy’s U-turn is expected to be severe; a consumer exporting 300 units and importing a similar volume could now face a bill of approximately Rs10,000, compared to nearly zero under the outgoing system. Citizen-funded investment in grid-connected solar power was once called a rare success story. Now, through abrupt regulatory shifts, the government is killing the momentum. The shift to solar panels not only allows consumers to shave thousands of rupees from their electric bills, but it also helps the country meet its green energy goals. Making up less than 2.0 per cent of the energy mix in 2020, solar power reached 10.3 per cent in 2024, according to the global energy think tank Ember. But in a remarkable acceleration, it more than doubled to 24 per cent in the first five months of 2025, becoming the largest source of energy production for the first time.
Households and small businesses invested millions of rupees of their own capital to install solar systems, easing pressure on an overstretched national grid and reducing reliance on imported fuels. However, according to the authorities, under the one-for-one unit offset system, consumers continued to rely on the grid as a backup while contributing little to its maintenance, shifting infrastructure costs onto non-solar consumers and deepening the financial imbalance faced by distribution companies. What is missing from this debate is the acknowledgement that solar consumers already bear substantial costs, including upfront capital investment and system maintenance. Distributed solar also reduces transmission losses and lowers peak demand.
In recent years, Pakistan has witnessed extreme temperatures. In summer, it has now become almost impossible to survive in buildings and residential homes without air-conditioning units. On top of this, constant loadshedding by power companies has made the matter even worse, forcing people to look for alternatives to survive. Pakistan’s solar boom was one of the few successful energy stories. Citizens stepped in where the state could not. By dismantling net metering in this manner, the government risks extinguishing that momentum. The government’s arguments indeed have substance, but there needs to be a more balanced approach that does not unfairly punish early adopters. Pakistan also has to realise that sudden policy reversals send a wrong message. Gradual changes with the involvement of policymakers and stakeholders should be the way forward.
