NEPRA Plans to Cut Solar Buyback Rate to Rs10

LAHORE – The National Electric Power Regulatory Authority (Nepra) is preparing a major revision to Pakistan’s solar net metering policy, sources revealed. The regulator plans to slash the buyback rate for surplus solar power from Rs. 23 per unit to Rs. 10. Officials said the proposal aims to ease the growing financial pressure on the power sector. The change could significantly affect rooftop solar consumers who sell excess electricity to the national grid.

In the next phase, officials may remove the buyback system entirely. Under the proposed plan, consumers will no longer be paid for supplying solar electricity to the grid. Instead, they will be required to use all the electricity they generate. Sources said the government believes this move could help stabilize revenues for power distribution companies. The current policy, they added, has created an imbalance between solar producers and traditional electricity users.

According to Power Division officials, payments to solar consumers have reached Rs. 125 billion. This growing burden is complicating payments to Independent Power Producers (IPPs). Authorities fear that rooftop solar generation is fast becoming an alternative to the IPPs, reducing grid dependency and revenue. The government argues that without reforms, the financial structure of the power sector could face serious strain.

In fiscal year 2024 alone, grid electricity sales dropped by 3.2 billion units. This decline caused an estimated Rs. 101 billion revenue loss for distribution companies. To recover the shortfall, power tariffs for regular consumers rose by almost Rs. 1 per unit. Experts warn that if the trend continues, grid costs could rise further in the coming years. The Power Division’s projections show this impact widening rapidly over the next decade.

The growing crisis has prompted direct intervention from the prime minister. On October 22, he ordered Nepra and the Power Division to reassess the solar buyback tariff. The government will review the policy’s long-term impact before approving any reforms. Officials stressed that the goal is to balance affordability, sustainability, and financial stability in Pakistan’s evolving energy mix.

Read More : Pakistan Reduces Tax on Solar Panel Imports: Ishaq Dar

Deputy Prime Minister and Foreign Minister Ishaq Dar announced that the sales tax on imported items used in solar systems has been reduced from 18% to 10%.

Speaking in the Senate, Ishaq Dar explained that Pakistan imports nearly 46% of its solar system components from abroad. He said the decision to cut taxes aims to ease the financial burden on the public and promote solar energy use in the country.

He further clarified that sales tax on digital services falls under provincial jurisdiction, addressing any confusion on the matter. Development projects across all four provinces will now be handled by the Pakistan Infrastructure Development Company Limited (PIDCL), which will function as a replacement for the Public Works Department (PWD).