Net billing to replace net metering under sustainable Energy Plan

ISLAMABAD: Federal Minister for Energy Sardar Awais Ahmad Khan Leghari said Wednesday that net metering users with a payback period of around three years or less represent a viable investment model—but the system is having serious implications for the national grid and must be reformed.
He made these remarks while chairing a consultative meeting at the Private Power and Infrastructure Board (PPIB) on the potential transition from net metering to net billing.
The meeting brought together experts from the solar energy sector, representatives of key government institutions, provincial officials, and other stakeholders.
While expressing gratitude to participants, the Minister clarified that the government is not abolishing net metering, but is considering reshaping the framework to make it more effective, transparent, and sustainable. He recalled his own role in introducing net metering during 2017–18, when the system was in its infancy. Now, with significant growth in the sector, its impact on the national grid has become more pronounced and must be addressed proactively.
He emphasized that the government does not intend to harm consumers or businesses, and all decisions are being made in the national interest with long-term energy sustainability in focus. Addressing concerns, he clarified that the government is not insisting on buying electricity from net metering users at the lowest possible rates. Ongoing discussions include the possibility of linking purchase rates to an energy pricing formula that adjusts automatically with market fluctuations.
According to the Minister, users who recover their investment in solar systems within three years—particularly those who consume 40% of their generated electricity—are operating under a commercially viable model. The goal, he said, is not to discourage adoption of solar energy, but to shift toward a more balanced and equitable energy system.
During the session, Leghari outlined the broader scope of energy sector reforms. He revealed that the government has terminated 9,000 MW of costly and redundant energy projects that had placed a financial burden on the electricity system. Additionally, a levy on captive power users has incentivized their return to the national grid, increasing electricity demand.
Since June 2024, the government has provided PKR 174 billion in cross-subsidies to the industrial sector, leading to a reduction in industrial electricity rates of up to 31% and a corresponding rise in consumption.
He also noted that electricity tariffs for various consumer categories have dropped by 14–18%, illustrating the tangible effects of reform. Moreover, the government renegotiated contracts with large Independent Power Producers (IPPs), resulting in lower tariffs, and removed unnecessary projects from its long-term energy planning.
Leghari highlighted that Pakistan currently has a surplus of 7,000 MW of electricity, which can be supplied to industrial and agricultural consumers at competitive rates—between 7 and 7.5 cents per unit—without requiring subsidies. This proposed scheme has been under discussion with the IMF for six months, even though there is no direct financial pressure from the institution.
He reaffirmed that balancing electricity supply and demand remains a central goal and that the government is prioritizing grid modernization through integrated and off-grid solutions.
The Minister stressed that all energy reforms are being pursued under a long-term strategic framework. “This is the time to modernize our energy system,” he said, assuring that stakeholder suggestions will be seriously considered to ensure the transition is effective, inclusive, and in the national interest.
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