Pakistan’s power regulator has replaced the long-standing net metering system with a new net billing framework, a change that significantly alters how solar and other small-scale renewable energy producers are compensated for excess power fed into the grid.
The National Electric Power Regulatory Authority (NEPRA) notified the Prosumer Regulations 2026 on February 9, 2026. This replaces the 2015 net metering rules entirely. The shift applies immediately to both existing and new users of distributed generation systems up to 1 MW, covering solar, wind, and biogas setups.
Under the old net metering approach, consumers received credits at retail rates for surplus electricity sent to the grid, often offsetting their bills unit for unit. Now, the system moves to net billing: utilities buy excess power at the national average energy purchase price (around PKR 11 per unit), while consumers pay standard retail tariffs for what they draw from the grid—frequently over PKR 50 per unit for many households.
Existing net-metered consumers shift to this net billing setup right away. Their exported units now get credited monthly instead of over longer periods. New agreements limit to five years, with an option to renew for another five. Existing contracts keep their original terms until they end (often seven years), but billing follows the new rules from the next cycle after notification.
NEPRA and Power Division officials explain the change addresses financial strain on distribution companies (DISCOs) and grid issues from rapid solar growth. Rooftop solar installations surged due to high electricity prices, unreliable supply, and cheaper panels. Estimates place cumulative net-metered solar capacity around 5-6 GW recently, mostly in urban homes, businesses, and industries.
This expansion cut grid demand during daylight hours but led to heavy revenue shortfalls for utilities. In fiscal year 2024, sales dropped by about 3.2 billion units, causing losses near PKR 101 billion. Those costs shifted into tariffs, adding roughly PKR 0.9 per kWh for other consumers.
Officials describe the prior setup as creating imbalances and distortions. The new rules aim to stabilize the sector while still allowing payments for excess generation, though at much lower rates.
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Consumers must use two-way or separate meters. Quarterly payments apply for surplus supplied.
The regulations follow public consultation but were notified without major alterations.
This policy shift may slow new rooftop solar adoption, as payback periods lengthen for export-focused systems.
