Pakistani Parliament Grapples with NEPRA’s Net‑Metering Reforms; Power Minister Justifies Move

Pakistan Grapples With Solar Energy Policy Shift Amidst Grid Concerns

February 13, 2026

Islamabad – A contentious debate unfolded in Pakistan’s National Assembly this week regarding alterations to the country’s net-metering policy, sparking concerns among solar energy adopters and prompting a swift response from the Prime Minister’s office. at the heart of the dispute lies a transition from net-metering, where consumers receive full credit for excess solar energy fed back into the grid, to a net-billing system.

Power Minister Sardar Awais Leghari defended the changes, asserting the move was motivated by a need for “fair pricing” and not an attempt to stifle the growth of solar power. The shift comes as Pakistan seeks to manage the increasing influx of renewable energy and safeguard its existing power infrastructure, much of which is described as outdated and inefficient. The new regulations, announced by the power regulator on Monday, signal a critically important change for both current and future solar energy prosumers.

The core of the Dispute: Net-Metering vs. Net-Billing

Net-metering has,until recently,allowed individuals and businesses to utilize the national grid as a storage system for excess solar energy,without incurring additional fees. However, the government argues that this system places an undue burden on the state-owned power network and doesn’t accurately reflect the value of energy supplied to the grid. The newly implemented net-billing system proposes a lower compensation rate for exported energy, estimated at approximately Rs9 per unit.

This difference in rates has triggered criticism, with solar energy users questioning the fairness of buying power back from them at a significantly lower price than the rate they pay for consumption. According to the Power Minister, the average cost of electricity generation in Pakistan, encompassing hydel, solar, wind, nuclear, gas, and coal sources, stands at Rs8.31, raising questions about the justification for the Rs27 purchase rate previously offered under net-metering.

Government Response and Scale of Solar Adoption

Following widespread criticism, Prime Minister Shehbaz Sharif instructed the Power Division to file a review appeal against the regulator’s decision. Leghari revealed that the total distributed solar generation capacity in Pakistan is estimated between 20,000 MW and 22,000 MW, with 6,000 to 7,000 MW currently operating under the net-metering regime. Of this, approximately 2,200 MW is utilized by industrial units and 4,800 MW by commercial and domestic consumers.

However, the minister emphasized that only around 456,000 consumers currently utilize net-metering, representing a relatively small portion of the total consumer base. He stated that the policy aims to reduce the burden on other consumers while still allowing solar investors to maintain a reasonable profit margin, estimated at 37 percent annually even under the new regulations. According to a recent report by the International Energy Agency, global renewable energy capacity is on track to significantly expand in the coming years, highlighting the importance of adaptable policies.

Metric	Value
Total Distributed Solar Capacity (Estimate)	20,000 – 22,000 MW
Solar Capacity Under Net-Metering	6,000 – 7,000 MW
Net-Metering Consumers	456,000
average Electricity Generation Cost (Pakistan)	Rs8.31

Political Opposition and Future Steps

Opposition Member of the National Assembly (MNA) Sharmila Faruqui vehemently opposed the policy changes, labeling the move as “daylight robbery” and accusing the government of blaming net-metering users for the inefficiencies within the national grid. She argued that the changes undermine the government’s own clean energy initiatives and unfairly penalize those who have embraced renewable sources.

The Power Minister responded by acknowledging the existence of broader grid issues but maintained the regulations are crucial for achieving a more equitable pricing structure. Despite the initial friction, the Prime Minister has directed the Power Division to temporarily halt the implementation of net-billing while a review is conducted and a strategy is developed to mitigate the impact on consumers.

As Pakistan continues to navigate its energy transition, this debate highlights the complex challenges of integrating renewable energy sources while ensuring affordability and grid stability. Will Pakistan find a balance that fosters sustainable energy growth and protects the interests of all stakeholders? And how will these policy shifts impact the long-term adoption of solar power in the country?

Share your thoughts on this evolving situation in the comments below!

How will NEPRAS new net‑metering reforms effect the ROI for residential rooftop solar installations in Pakistan?

Pakistani Parliament Grapples wiht NEPRA’s Net‑Metering Reforms; Power Minister Justifies Move

The National Electric power Regulatory Authority’s (NEPRA) recent revisions to net-metering regulations in pakistan have sparked considerable debate within the Parliament,with the Power Minister defending the changes as crucial for grid stability and financial sustainability. These reforms, impacting rooftop solar installations and overall renewable energy integration, are at the heart of a national conversation about energy independence and the future of Pakistan’s power sector.

Understanding the Core of the Reforms

The revised net-metering rules, finalized in late 2025 and taking effect February 2026, primarily address the compensation mechanism for surplus electricity fed back into the national grid by consumers with solar power systems. Key changes include:

* Reduced Compensation Rates: Previously,consumers were compensated at a rate equivalent to the retail electricity tariff. The new regulations introduce a tiered system, significantly lowering the rate for excess energy exported, especially for larger installations.

* capacity-Based Charges: Introduction of fixed charges based on the installed capacity of the solar system, regardless of actual energy generation or consumption. This aims to recover costs associated with grid infrastructure upgrades needed to accommodate distributed generation.

* Eligibility criteria: Stricter guidelines for system sizing relative to sanctioned load,preventing oversized systems that could destabilize local grids.

* Net-Metering Licence: Mandatory licensing requirements for net-metering service providers, ensuring quality control and technical compliance.

Parliamentary Scrutiny and Opposition Concerns

The changes haven’t been without opposition. Several parliamentarians have voiced concerns that the new regulations will disincentivize investment in rooftop solar, hindering Pakistan’s progress towards its renewable energy targets. Arguments raised during parliamentary sessions include:

* Impact on ROI: lower compensation rates drastically reduce the return on investment for solar installations, making them less financially attractive for households and businesses.

* Equity Concerns: Critics argue the fixed capacity charges disproportionately affect smaller consumers, potentially creating a barrier to entry for those seeking to reduce their electricity bills and carbon footprint.

* Clarity Issues: Some members of parliament have called for greater transparency in the process of determining compensation rates and capacity charges, alleging a lack of stakeholder consultation.

* Potential for Litigation: Legal challenges to the new regulations are anticipated, with solar industry representatives citing potential violations of existing contractual agreements.

The Power Minister’s Defense

Power Minister khurram Dastgir Khan,addressing Parliament on February 12th,2026,defended the reforms as necessary to address systemic issues within the power sector.His key justifications included:

* Grid Stability: He emphasized that uncontrolled growth of distributed generation without adequate grid infrastructure upgrades poses a critically important threat to grid stability, potentially leading to blackouts and power outages.

* Financial Sustainability of DISCOs: The Minister argued that the previous net-metering regime placed an undue financial burden on Distribution Companies (discos), as they were forced to purchase surplus electricity at retail rates while selling it back to other consumers at subsidized rates.

* Fairness to All Consumers: Khan stated that the reforms aim to create a more equitable system where all consumers, including those without solar, contribute fairly to the cost of maintaining the power grid.

* Long-Term Renewable Energy Growth: He asserted that the revised regulations will foster sustainable growth of the renewable energy sector by encouraging responsible grid integration and attracting long-term investment.

Real-World Impact and Case Studies

The impact of these changes is already being felt. Several planned solar projects have been put on hold pending clarity on the new regulations.

* Industrial Sector: A textile mill in Faisalabad, initially planning a 5MW rooftop solar installation, has reportedly scaled back its project to 2MW due to the reduced compensation rates. The mill’s management cited concerns about the project’s financial viability.

* Residential Sector: Anecdotal evidence suggests a slowdown in applications for net-metering licenses from homeowners, particularly in urban centers like Lahore and Karachi.

* Punjab Solar Initiative: The Punjab government’s ambitious solarization program for agricultural feeders is also under review, with officials assessing the impact of the new regulations on the program’s cost-effectiveness.

Benefits of a Revised net-Metering System (according to NEPRA)

NEPRA maintains that the reforms, while potentially impacting short-term returns for some investors, will ultimately benefit the entire power sector. These benefits include:

* Reduced Circular Debt: By improving the financial health of DISCOs,the reforms are expected to contribute to a reduction in Pakistan’s crippling circular debt.

* Enhanced Grid Reliability: Investing in grid infrastructure upgrades will improve grid reliability and reduce the frequency of power outages.

* Sustainable Renewable Energy Growth: A more sustainable net-metering regime will attract long-term investment in the renewable energy sector, fostering innovation and job creation.

* Improved Energy Planning: Better data collection and monitoring of distributed generation will enable more accurate energy planning and forecasting.

Practical Tips for Consumers and Investors

For consumers and investors navigating the new net-metering landscape:

1. Accurate System Sizing: Carefully assess your energy consumption patterns and size your solar system accordingly to avoid unnecessary capacity charges.
2. Financial Modeling: Conduct a thorough financial analysis, factoring in the reduced compensation rates and capacity charges, to determine the project’s ROI.
3. Explore Financing Options: Investigate available financing options, including government subsidies and private sector loans,