Govt Planning to Drastically Reduce Solar Net Metering Buyback Rates

The government is considering reducing buyback rates for net metering electricity, potentially lowering them from the current Rs. 21 to Rs. 11 per unit.

This move comes amidst  Power Division concerns that the surge in net metering installations, primarily by wealthier consumers, has disrupted the government’s plans to pay off capacity charges, reported Business Recorder.

The Power Division is of the view that consumers have already benefitted a lot from the facility, and now the power sector has started declining.

The transition towards net metering by wealthier people is shifting the sector’s financial burden onto poorer consumers. While the government remains supportive of solar energy adoption, it feels that the current buyback rates are unreasonable.

As of March 31, 2024, approximately 6000 MW of solar panels have been imported which helped generate 3000 MW of electricity.

In 2022, the National Electric Power Regulatory Authority (NEPRA) proposed amending the Alternative & Renewable Energy Distributed Generation and Net Metering Regulations, 2015 to accommodate the increased national average power purchase rate of Rs. 19.32 per unit.

Despite opposition from stakeholders and consumers, NEPRA ultimately decided against the amendments. The regulator recognized its role in minimizing electricity costs, reducing foreign exchange expenditure, and minimizing losses, while affirming its alignment with the government’s vision of integrating affordable and clean renewable energy sources into the energy system.