Solar Users to Pay Full Electricity Unit Price Under Latest Net-Billing Rule

Pakistan has officially ended its net metering regime, overhauling the economics of rooftop solar as regulators introduced a new net billing framework that pays small power producers less for surplus electricity while charging them standard consumer tariffs for grid supply.

The National Electric Power Regulatory Authority (NEPRA) has notified the latest Prosumer Regulations 2026, which end the unit-for-unit electricity supply system.

The current buyback rate for electricity exported by solar net metering consumers stands at Rs. 25.9 per unit, which may be reduced to around Rs. 11 per unit under the proposed framework.

The new policy will not apply to existing net metering consumers during the validity of their contracts. However, Discos have been authorised to either terminate contracts or transition consumers to the new policy framework upon contract expiry.

Distribution companies (Discos) will charge consumers the applicable retail tariff for electricity supplied from the grid, which may be as high as Rs. 50 per unit, while purchasing surplus electricity from solar consumers at a significantly lower rate of Rs. 11 per unit.

Also, electricity generated through distributed generation facilities using solar, wind, or biogas of up to 1 MW will now be settled through a net billing mechanism instead of unit-for-unit adjustment. Billing will be carried out at the end of each billing cycle (30-day period), based on actual energy supplied and consumed.

Under the new framework, electricity exported to the national grid by net metering consumers will be purchased at the National Average Energy Price, while consumers will be billed for electricity consumed at the prevailing applicable tariff.

The regulations clarify that payments for surplus electricity supplied to the grid will be made separately, moving away from the one-to-one unit compensation system. The framework also brings biogas-based prosumers under the same regulatory structure.

NEPRA has defined the scope of eligible consumers to include residential, commercial, industrial, agricultural and general services consumers connected at 400V or 11kV, subject to approval and interconnection with the distribution system of the licensee.

With the enforcement of the Prosumer Regulations 2026, the Net Metering Regulations 2015 have been suspended. The authority said the revised framework is intended to standardize distributed generation, improve transparency and align consumer-level power generation with the broader regulatory and tariff structure.

The regulator has also limited the net metering contract period to five years. Upon expiry, contracts will be eligible for renewal for an additional five years.

With the enforcement of the 2026 regulations, the Net Metering Regulations 2015 will be automatically suspended.

NEPRA will have special powers to revise purchase rates during the life of agreements, issue binding directions, demand operational data, impose penalties, and relax/modify provisions when appropriate.

Nepra said the reforms aim to curb financial losses, tariff distortions and grid instability caused by rapid solar adoption. Pakistan’s rooftop solar capacity is now estimated at 6,000 megawatts, concentrated among urban residential, commercial and industrial users.

While solar has reduced daytime grid demand, it has also eroded utility revenues. In FY2024, electricity sales fell by 3.2 billion units, costing distribution companies nearly Rs. 101 billion, losses that were absorbed into tariffs, adding about Rs. 0.9 per kilowatt-hour for remaining consumers.

Regulators argue net metering produced a regressive outcome, shifting fixed system costs such as capacity payments and grid maintenance onto non-solar users as wealthier households cut their billed consumption. Power Division projections show that without reform, lost grid sales could reach 18.8 billion units by FY2034, with a cumulative impact of Rs. 545 billion, potentially lifting tariffs by Rs. 5–6 per unit.

The distortion widened as utility-scale solar is now contracted below Rs. 10 per unit, while rooftop exports under net metering were credited at Rs. 22–27 per unit, excluding taxes and surcharges. “The grid was effectively being used as a free battery,” a senior energy official said.

Operational risks have also grown. Winter demand often drops to 8,000–9,000 megawatts, while solar output peaks during daylight, raising concerns over over-generation and frequency instability. Nepra has capped distributed generation at one megawatt, restricted capacity to sanctioned load, and barred new connections where transformer utilization exceeds 80%.