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The Ministry of Energy has approved a major revision to Pakistan’s net metering policy, significantly altering the framework for solar power consumers across the country.

Sources in the National Electric Power Regulatory Authority (Nepra) said the decision was finalised after months of consultations with key stakeholders, including power distribution companies (Discos) and regulatory bodies. Under the revised net billing mechanism, solar consumers will now be compensated at a fixed rate of Rs11 per unit for electricity exported to the national grid.

Officials said the duration of solar power agreements has also been reduced to five years. Unlike the previous net metering regime — under which excess electricity generated by consumers was adjusted against their total consumption — the new system introduces a fixed per-unit compensation rate to be determined by Nepra. Electricity drawn from the grid will continue to be billed at the prevailing Nepra-approved tariff.

Under the earlier policy, solar consumers received a much higher buyback rate of Rs25.98 per unit. However, officials said the revised framework aims to align solar incentives with evolving market conditions and ensure long-term grid sustainability.

Sources further said that all solar installations with a load of up to 25 kilowatts will now require a licence from Nepra. Previously, domestic, commercial and industrial consumers installing systems within this capacity were exempt from licensing requirements.

The Ministry of Energy has informed the federal government that continuation of the old net metering policy was no longer viable due to mounting financial and operational pressures on the power sector.

Ministry officials maintained that the determination of solar tariffs falls under Nepra’s mandate and that tariff structures and regulatory frameworks are periodically revised in line with sectoral needs. They also sought to reassure consumers, saying the revised policy is unlikely to have a significant impact on the majority of solar users.