NEPRA’s New Rules Push Up Power Bills as Solar Buyback Rate Slashed from Rs27 to Rs11 per Unit

The National Electric Power Regulatory Authority has enforced new regulations that replace the long-standing net metering system with a net billing mechanism for solar power consumers, a change that is expected to significantly reduce savings and raise electricity bills for households and businesses across Pakistan.

Under the newly notified Net Metering Regulations 2026, surplus electricity supplied by solar users to the national grid will now be purchased at the prevailing national average energy price, currently around Rs11 per unit. This is a sharp reduction from the earlier fixed buyback rate of about Rs27 per unit that was available under net metering. At the same time, solar consumers will continue to purchase electricity from the grid at standard tariffs, which generally range between Rs40 and Rs50 per unit and are even higher in some regions.

The new framework ends the practice of offsetting imported and exported electricity units against each other, which had been the foundation of net metering and a major incentive for investing in rooftop solar systems. Previously, consumers could balance the electricity they drew from the grid with the units they fed back. When solar generation exceeded consumption, electricity bills were drastically reduced and, in some cases, eliminated entirely. This structure played a key role in driving rapid growth in rooftop solar installations, particularly as grid electricity prices surged.

Power distribution companies, however, had argued that net metering was causing financial strain, as many solar users paid little or nothing for electricity while still depending on the grid for backup supply and transmission services. Under the new net billing system, electricity purchased from the grid and electricity sold to the grid will be calculated separately. Consumers will pay full tariffs on their grid usage, while surplus power exported to the grid will be credited at much lower rates.

NEPRA stated that the revised regulations apply not only to solar consumers but also to those generating power through biogas-based systems. Existing net metering users will not be shifted immediately, as their current contracts will remain valid until expiry, though the method for calculating exported electricity will be revised. New consumers will be offered net billing agreements for an initial period of five years, renewable for another five-year term.

According to the new rules, billing will be issued at the end of each billing cycle, while payments for surplus electricity will be made on a quarterly basis. If the value of exported electricity exceeds the monthly bill, the balance will either be adjusted in subsequent bills or paid every three months. The regulations also cap the maximum capacity of distributed generation systems at one megawatt and require that installed capacity does not exceed the approved consumer load, aiming to prevent excessive generation from putting pressure on the grid.

The potential financial impact of the shift has sparked widespread concern. Awab Alvi, son of former president Arif Alvi, explained the difference through an example. Under net metering, a user consuming 500 units from the grid and exporting 400 units through solar would be billed for only 100 units, resulting in a charge of around Rs3,300. Under net billing, the same user would pay about Rs16,500 for grid electricity and receive a credit of roughly Rs4,000 for exported power, pushing the final bill to around Rs12,500. He said the solar system remains unchanged, but the bill increases sharply.

Former finance minister Miftah Ismail criticised the policy, saying the government would sell electricity to consumers at around Rs40 per unit while buying it back at only Rs11 per unit, in addition to imposing 18 percent sales tax on expensive power. He warned that such a wide gap is financially damaging for consumers and undermines incentives for clean energy adoption.

Senator Sherry Rehman said the move was driven by fiscal considerations. In a post on social media platform X, she wrote that electricity had quietly become one of the state’s most reliable sources of tax revenue and that self-generating consumers reduced both demand and levy collections. She cautioned that the new “prosumer” rules would slow Pakistan’s energy transition, weaken climate commitments, and penalise citizens who invested in clean energy based on state-backed agreements.

Pakistan Peoples Party leader Ahmed Ghuman also criticised the decision, saying the purchase price of solar electricity had fallen sharply from Rs25.32 to Rs8.13 per unit. He said a single policy change had reduced rates by Rs17.19, calling it punishment rather than reform. Journalist Umar Cheema added that frequent regulatory changes discourage investment, warning that a state which first encourages investment and then alters rules to penalise it cannot expect long-term trust.

Representatives of the solar industry say the policy is aimed at increasing consumption from the national grid. Solar Association chairman Waqar Musa said the government is seeking to reduce financial pressure on the power sector by ensuring higher grid usage and recovering fixed costs and capacity payments.

Energy experts estimate that Pakistan currently generates around 7,000 megawatts from solar systems, including both net metering and non-net metering users. They note that the rapid expansion of rooftop solar has reduced grid demand, shifting the burden of capacity payments onto non-solar consumers. Analysts also warn that the new policy could push consumers away from exporting power to the grid and towards installing battery storage systems, as storing electricity for personal use may now be more economical than selling it at low buyback rates.

Senator Sherry Rehman has proposed alternative approaches, including setting up data centres to absorb surplus power and renegotiating costly capacity payment agreements under which the state pays producers even when electricity is not consumed. NEPRA said the 2026 regulations have replaced and suspended the Net Metering Regulations 2015 and are intended to stabilise the power sector.

Critics, however, argue that the shift from net metering to net billing transfers the financial burden onto consumers who invested in solar energy based on previous government policies and expectations. As the new rules take effect, many solar users fear the changes could slow Pakistan’s renewable energy momentum and make clean power less affordable for households and small businesses.

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