No Change in Pakistan's Solar Energy Policy: PM Shehbaz Clears the Air
Islamabad, March 23, 2025: Amid growing concerns and speculations about changes in Pakistan’s solar energy policy, Prime Minister Shehbaz Sharif has categorically stated that there is no shift in the government’s stance regarding renewable energy. Chairing a high-level review meeting on the Power Division, he instructed officials to dispel all misconceptions about the solarisation policy using accurate data and facts.
Government Committed to Renewable Energy Expansion
Addressing key stakeholders, PM Shehbaz reaffirmed that promoting solar energy remains a top priority for his administration. His remarks come in the wake of the Economic Coordination Committee’s (ECC) recent decision to amend net metering regulations, reducing the buyback rate from Rs27 to Rs10 per unit.
The move sparked widespread debate, with many fearing it could discourage investment in solar power. However, the prime minister clarified that the revised buyback rates would only apply to new net metering applicants and would not affect existing consumers with valid agreements.
The Truth Behind Net Metering Amendments
The ECC’s decision to revise the net metering framework follows a significant increase in solar net-metering users, which has financial implications for the national grid. According to official data, solar power penetration has surged by 1,500MW to 2,000MW in the past 1.25 years, with expectations of an additional 1,200MW entering the system annually.
The newly approved framework allows the National Electric Power Regulatory Authority (Nepra) to periodically revise the buyback rate to ensure adaptability to market conditions. Contrary to rumors, this policy does not impose any new taxes on solar panels or installations.
Federal Minister for Energy Sardar Awais Ahmad Leghari, in a recent interview, stressed that the new regulations would actually encourage more users to adopt solar energy, as the average payback period remains around four years. He dismissed speculation that the government was discouraging solar energy, reaffirming that Pakistan remains committed to increasing renewable energy contributions to the national grid.
Privatization and Energy Reforms on the Fast Track
Beyond solar policy, the prime minister also directed authorities to expedite the privatization of power distribution companies (DISCOs) and liquidate underperforming generation companies. A comprehensive package to lower electricity tariffs is also in the works, aimed at providing relief to consumers suffering from high energy costs.
To ensure a streamlined approach, PM Shehbaz instructed the Power Division, Water Resources Division, and Petroleum Division to enhance coordination and formulate a unified strategy for Pakistan’s energy sector.
What This Means for Solar Energy Users
- Existing solar net-metering consumers: No impact; current agreements remain valid.
- New solar net-metering applicants: The new buyback rate of Rs10 per unit applies.
- Future policy updates: Nepra will adjust the buyback rate periodically based on market conditions.
- No additional taxes: The government has not imposed any taxes on solar panels or systems.
- Faster solar adoption: The government aims to add 1,200MW of solar energy to the grid annually.
FAQs About Pakistan’s Solar Energy Policy
1. Has Pakistan changed its solar energy policy?
No, PM Shehbaz Sharif has confirmed that the government’s commitment to renewable energy remains unchanged.
2. What is the new net metering buyback rate?
The buyback rate for new net metering consumers has been reduced from Rs27 to Rs10 per unit.
3. Will existing solar net-metering users be affected?
No, the new rates only apply to future applicants. Existing agreements remain unchanged.
4. Why was the net metering buyback rate reduced?
The rate adjustment was made to ensure financial sustainability due to a sharp rise in net-metering users.
5. Is the government discouraging solar energy adoption?
No, the government is actively promoting solar energy and expects 1,200MW to be added annually.
6. Are there new taxes on solar panels in Pakistan?
No, there are no new taxes on solar panels or installations.
7. Can Nepra further change the net metering rates?
Yes, Nepra has the authority to revise the rates periodically based on market conditions.
8. What is the expected payback period for solar system investments?
On average, consumers can recover their solar investment in about four years.
9. What is the government doing to lower electricity prices?
A new package to reduce electricity tariffs is being formulated to provide relief to consumers.
10. Will privatization of power distribution companies impact solar users?
Privatization aims to improve efficiency, but it will not directly affect individual solar energy users.
Final Thoughts
The government’s renewable energy policy remains intact, and the recent net metering changes are meant to sustain the long-term growth of solar power in Pakistan. With increased solar adoption, the country is making strides toward energy independence, ensuring a cleaner and more efficient power sector.
For those considering solar power, now is still a great time to invest, as the government continues to encourage renewable energy initiatives without imposing additional financial burdens.
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