Govt reduces net metering rate to Rs10 per unit

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet here on Thursday approved a set of amendments to the existing net-metering regulations aimed at reducing the growing financial burden on grid consumers.

According to press release issued by finance division, the ECC meeting was chaired by Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb and was attended by Minister for Power, Sardar Awais Ahmed Khan Leghari; Minister for Maritime Affairs, Qaiser Ahmed Sheikh; Minister for Petroleum, Ali Parvez Malik, along with federal secretaries and senior officials from relevant ministries and divisions.

The decision comes in light of a significant increase in the number of solar net-metering consumers, with associated financial implications for grid consumers, the statement added.

As part of the approved changes, the ECC has revised the buyback rate from the National Average Power Purchase Price (NAPP) to Rs 10 per unit.

Furthermore, the committee approved the proposal, subject to the ratification of Cabinet, to allow the National Electric Power Regulatory Authority (NEPRA) to revise this buyback rate periodically, ensuring that the framework remains flexible and aligned with evolving market conditions.

It was clarified, however, that the revised framework will not apply to existing net-metered consumers who have a valid license, concurrence, or agreement under the NEPRA (Alternative & Renewable Energy) Distributed Generation and Net Metering Regulations, 2015.

Any such agreements will remain effective until the expiration of the license or agreement, whichever occurs first. This ensures that the rights and obligations of these consumers, including agreed-upon rates, will continue as per the existing terms.

Additionally, the ECC also approved an update to the settlement mechanism.

Under the new structure, imported and exported units will be treated separately for billing purposes.

The exported units will be purchased at the revised buyback rate of Rs 10 per unit, while the imported units will be billed at the applicable peak/off-peak rates, inclusive of taxes and surcharges, during the monthly billing cycle.

The ECC also authorized the Power Division to issue proposed guidelines, subject to Cabinet’s ratification, to NEPRA for incorporation into the applicable regulatory framework, ensuring clarity and consistency in the implementation of these amendments. The decision follows extensive discussions on the growing impact of solar net-metering on the national power grid.

The Power Division highlighted the pressing need for regulatory adjustments, citing a record decline in solar panel prices that has led to a sharp increase in the number of solar net-metering consumers.

As of December 2024, solar net-metering consumers had transferred a burden of Rs 159 billion to grid consumers, a figure expected to rise to Rs 4,240 billion by 2034 without timely amendments.

The ECC was informed that the number of solar net-metering consumers surged significantly, reaching 283,000 by December 2024, up from 226,440 in October 2024. The total installed capacity also grew from 321 MW in 2021 to 4,124 MW by December 2024, underscoring the rapid expansion of the net-metering sector.

However, the increase in solar net-metering consumers has contributed to a rising cost of electricity for grid consumers, undermining the government’s efforts to reduce power tariffs.

The ECC also discussed the financial implications of the growing number of solar net-metering consumers, especially as they avoid paying the fixed charge component of the tariff, including capacity charges and the fixed expenditures of power distribution and transmission entities. This has transferred a disproportionate financial burden onto grid consumers, contributing to higher electricity tariffs and undermining the sustainability of the energy sector.

The committee also noted that 80% of solar net-metering consumers are concentrated in nine major cities, with a significant proportion located in affluent areas. This geographical concentration further highlights the need for regulatory reforms to ensure fairness and balance in the energy distribution system.

The amendments approved by the ECC represent a critical step toward ensuring the sustainability of the power sector while protecting the interests of all consumers, particularly those who rely on the grid for electricity.

Meanwhile, the ECC was also given a detailed briefing by the Economic Advisor of the Finance Division on inflation trends in 2025, highlighting a downward trajectory in CPI, food inflation, and SPI. The committee was also informed of a week-on-week decrease in essential commodity prices.

The presentation attributed the decline to fiscal discipline, improved supply chains, and targeted subsidies. The Chair appreciated these efforts and stressed the need for continued vigilance to maintain price stability.

The ECC further discussed a summary submitted by Ministry of Maritime Affairs regarding Export of Potassium Sulphate Fertiliser from Gwadar Port. The ECC approved an exemption for M/s Agven Private Limited, operating in the Gwadar North Free Zone, to export up to 10,000 tons annually or 50% of actual production, whichever is lower, until December 31, 2025.

The decision supports the development of Gwadar Free Zone while ensuring regulatory oversight through biannual shipment limits and data monitoring mechanisms.

The ECC also deliberated upon a summary from the Ministry of Interior and Narcotics Control regarding the disposal of gold case/reward money under the Customs Reward Rules, 2012. The committee directed the Ministry to justify the delay in processing the case and obtain the legal opinion of the Ministry of Law and Justice before resubmitting the summary.

Additionally, the ECC approved multiple Technical Supplementary Grants (TSGs) for the current fiscal year, including Rs. 250 million for the Ministry of Federal Education and Professional Training to support ICT-based educational initiatives, including smart classrooms, procurement of Chrome books, technology parks, and high-impact training centers.

It also approved, Rs. 220 million for the Ministry of Industries & Production to enhance SME development, focusing on bankability, subcontracting, and international consultancy engagement and Rs. 36.099 million for the Ministry of Interior and Narcotics Control to procure spare parts for helicopter maintenance by HQs Pakistan Rangers (Sindh).

The cabinet committee also approved Rs. 15.4 million for the Ministry of Interior and Narcotics Control for helicopter maintenance by HQs Frontier Corps Balochistan (North), Quetta; and Rs. 670 million for the Sustainable Development Goals Achievement Programme (SAP), reallocated from the Cabinet Division to the Ministry of Interior for further distribution to the ICT Administration.