Unfair solar buyback rates burdening millions of consumers :Leghari

ISLAMABAD: Minister for Power, Sardar Awais Ahmed Khan Leghari has acknowledged that while the government has made substantial progress in reducing Pakistan’s circular debt, the current structure of solar net metering remains a critical challenge to achieving sustainable reforms in the power sector.
Speaking at a press conference on Friday, the Minister emphasized that net metering, in its current form, poses a financial imbalance, which ultimately affects the broader consumer base. He stated that while approximately 350,000 solar net metering consumers benefit from highly favorable buy-back rates, this subsidy-like arrangement is being indirectly borne by 35 million other electricity consumers.
“The existing rates for solar net metering are in a disastrous state. If reviewed to a fairer structure, we could reduce the per-unit cost of electricity by Rs 3 to Rs 3.5/kWh for the vast majority of consumers,” said Leghari.
He clarified that the government is not against solar energy or consumer empowerment, but stressed that the current net metering regime creates distortions in the already fragile energy pricing framework.
The minister made these remarks while also presenting progress on the government’s efforts to tackle circular debt, which has been reduced by Rs 780 billion — down from Rs 2.394 trillion to Rs 1.614 trillion — without any “deceitful methods.” He highlighted the introduction of a Debt Service Surcharge (DSS) of Rs 3.23/kWh as part of a structured six-year repayment plan worth Rs 1.225 trillion.
Leghari argued that Pakistan’s energy pricing model must evolve, and reforms to net metering are part of a broader effort to improve fiscal sustainability in the power sector. He noted that the government has already saved Rs 175 billion due to falling interest rates and another Rs 242 billion by reducing theft and technical losses.
“We need to align incentives so that they are equitable. The power sector cannot carry the weight of one group’s benefit at the cost of another,” he emphasized.
The Minister also confirmed that discussions with the International Monetary Fund (IMF) included a detailed review of the net metering framework, among other issues related to circular debt and energy pricing. He noted that the IMF supported the government’s long-term plan to eliminate circular debt within six years through financial discipline and structural reforms.
In response to a question on the industry, Leghari noted that industrial consumers are currently receiving power at a 38% lower cost, and 18 million domestic users are paying 50% less due to recent reforms.
He concluded by reiterating that Pakistan’s economic stability is directly tied to energy sector reform, and that a more rational net metering policy will be a necessary step toward equitable and sustainable energy pricing.
Ends