NEPRA to Hold Public Hearing on Net Metering Changes After Stakeholder Objections

NEPRA to Hold Public Hearing on Net Metering Changes After Stakeholder Objections

The National Electric Power Regulatory Authority (NEPRA) has announced a public hearing scheduled for February 6 to deliberate on significant proposed amendments to net metering regulations. This move comes in response to widespread objections from a majority of stakeholders regarding the draft Prosumer Regulations 2025, which could profoundly affect thousands of solar energy users and future investments in distributed energy across Pakistan.

Background and Stakeholder Feedback

NEPRA formally released the draft Prosumer Regulations 2025 in December, inviting public comments within a 30-day period before repealing the existing Alternative and Renewable Energy Distributed Generation and Net Metering Regulations from 2015. The regulatory body has received an extensive volume of feedback, totaling over 1,200 pages of recommendations and comments from consumers, various government departments, and industry stakeholders. These submissions will be thoroughly discussed during the upcoming public hearing to address concerns and refine the proposed framework.

Key Proposed Changes in the Draft Regulations

The draft regulations introduce several pivotal modifications that mark a substantial shift from the current net metering system. Under the new proposals:

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• The term consumer will be replaced with prosumer, reflecting a dual role in both consuming and producing electricity.
• Net metering will transition to net billing, altering how electricity transactions are calculated.
• The buyback rate for surplus solar electricity will be revised downward from approximately Rs 26 per unit to Rs 11.3 per unit.
• The license period for agreements will be reduced from seven years to five years.
• New solar installations will be subject to a gross metering buyback rate of Rs 11.30 per unit under five-year contracts, with options for extension by mutual consent.
• The maximum capacity for distributed generation facilities will be capped at 100 percent of the sanctioned load, down from the previous allowance of 150 percent.

Existing consumers with valid seven-year contracts will continue to sell surplus electricity at around Rs 26 per unit until their agreements expire, providing some continuity for early adopters.

Implications and Stakeholder Concerns

This policy shift represents a major departure from the existing net metering system, where electricity exported to the grid is offset one-for-one against imports at similar retail rates. Under the new framework, electricity drawn from the grid will be charged at the full national tariff, while solar power sold back will be credited at a significantly lower rate. The government and power distribution companies argue that these changes are necessary to recover grid infrastructure costs and address alleged revenue losses attributed to net metering.

However, critics, including many stakeholders, have raised strong objections. They contend that the draft Prosumer Regulations 2025 are entirely unjustified, pointing out that power distribution companies sell electricity at rates up to Rs 60 per unit but would purchase solar-generated electricity at only up to Rs 11.3 per unit under the new rules. Stakeholders have expressed concerns that:

1. The reduction in capacity from 150 percent to 100 percent does not effectively curtail solarisation nor provide a coherent policy signal, while discouraging efficient system sizing by prosumers.
2. The shortened agreement term from seven to five years materially alters the commercial assumptions for existing and prospective prosumer investments.
3. The return on investment (ROI) for prosumers could increase from up to two years to up to five years, as they face higher electricity bills during off-peak and peak times while selling lower-cost solar-generated electricity to DISCOs.

Additionally, the shift comes amid operational challenges, such as a backlog of net metering applications and thousands of installed solar systems that remain unmetered, complicating the transition.

NEPRA's Objectives and Future Outlook

NEPRA has stated that the public hearing aims to finalize a balanced and sustainable framework for prosumers in Pakistan's power sector. By engaging with stakeholders, the authority seeks to address the diverse perspectives and ensure that the regulations support both energy sustainability and economic viability. This hearing is a critical step in shaping the future of renewable energy adoption in Pakistan, with potential ripple effects on national energy policies and consumer behavior.

In a separate cultural note, Basant, the traditional kite festival, has returned to Lahore after decades, with announcements of kite sales and free transport arrangements, highlighting regional cultural revivals alongside these significant energy policy developments.