ISLAMABAD: In a sweeping policy shift, the National Electric Power Regulatory Authority (Nepra) on Monday effectively ended Pakistan’s net-metering regime, replacing it with net-billing for both existing and future solar consumers, commonly known as prosumers. The move aims to curb the rapid growth of rooftop solar and shield an already costly and inefficient state-run power system.
The changes were enforced through regulations that had been circulated earlier as a draft for public feedback. Despite a public hearing, the final notification was issued without a single amendment, signalling that the decision had largely been finalised in advance.
Under the new framework, all registered prosumers will be shifted immediately from net-metering to net-billing. Exported electricity will now be credited for only one month instead of three, though other contractual terms will remain intact until the expiry of existing seven-year agreements.
This overturns earlier assurances by government officials that current net-metering contracts would remain unchanged until completion of their term.
For new solar consumers, contracts will be capped at five years, with the buyback rate for exported electricity slashed to around Rs10–11 per unit, down from the existing Rs26. Electricity imported from distribution companies (Discos) will be billed separately at Rs37–55 per unit, depending on the tariff slab, excluding taxes, duties and surcharges.
Unlike the current unit-for-unit adjustment, imported and exported electricity will now be calculated separately. Existing prosumers will continue to receive Rs26 per unit for surplus power until their contracts expire, while future prosumers will be paid roughly Rs10 per unit. The net difference will then be billed to consumers.
Nepra held a lengthy public hearing on Friday evening but restricted many consumers, business groups and independent experts from presenting alternative proposals. By the next working day, the regulator notified the same draft regulations, unchanged.
Similar proposals had earlier been floated by the Power Division but were withdrawn following public backlash over unilateral revisions to consumer-financed contracts introduced under the 2015 renewable energy policy.
Both the government and Nepra have blamed grid stress and rising capacity charges on prosumers with oversized solar systems and households operating unmetered solar installations. However, the new regulations remain silent on these categories and instead focus solely on metered solar consumers.
According to the Power Division, on-grid solar capacity has reached about 7,000 megawatts, while off-grid capacity exceeds 13,000MW. The power minister has claimed that millions of consumers are using hybrid systems without meters to remain in subsidised categories, pushing total unmetered capacity beyond 19,000MW — yet the new rules do not address this segment.
Under the net-billing mechanism, Discos will issue bills at the end of each billing cycle after accounting for electricity generated and consumed by the prosumer. Units supplied by Discos will be charged at the applicable tariff, while electricity exported by prosumers will be purchased at the National Average Energy Purchase Price (NAEPP), currently around Rs10 per unit.
If the value of exported electricity exceeds the cost of imported power, the surplus will either be adjusted in the next billing cycle or paid quarterly by the Disco — a provision that Discos have historically struggled to implement.
The regulations also restrict prosumers from installing solar capacity beyond their originally sanctioned load, effectively halving the maximum allowable system size for net-billing.
Existing contracts will remain valid until the end of their seven-year term, after which prosumers may apply for a five-year extension, subject to Disco approval. The rules apply to solar systems ranging from 1kW to 1MW, which fall under Nepra’s direct regulatory oversight. Consumers below 25kW continue to be licensed by Discos.
The policy shift comes despite Nepra’s own repeated criticism of power companies for inefficient operations and soaring electricity costs.
“High taxes, levies and surcharges — particularly the Debt Servicing Surcharge — have made grid electricity unaffordable,” Nepra said recently, noting that this has driven consumers towards decentralised and off-grid solutions, further eroding demand for grid power.
Nepra maintains that the revised regulations introduce clearer procedures, stricter technical standards and a new billing structure to better integrate distributed generation while protecting grid stability.
The rules also impose a transformer-level cap: Discos will not accept new applications once distributed generation connected to a transformer reaches 80 per cent of its rated capacity, citing risks of overloading and local network instability.