Islamabad: A recent shift in solar policy by Pakistan's National Electric Power Regulatory Authority (NEPRA) has raised alarms about potential economic and environmental repercussions. According to Islamabad Chamber of Commerce and Industry, Shahid Rasheed Butt, a former president of the Islamabad Chamber of Commerce, criticized the Prosumer Regulations 2025, which halve the solar buyback rate from Rs 26 to Rs 13 per unit and impose a limit on system capacity to the approved load. Butt expressed concerns that this policy could undermine Pakistan's transition to renewable energy and jeopardize its climate commitments under international agreements.
The new regulations also propose reducing the maximum permitted solar system size from 150 percent to 100 percent of the approved load, shortening contract durations from seven to five years, and replacing net metering with net billing. Butt highlighted the inequity in these measures, noting that distribution companies are allowed to sell electricity at rates up to Rs 60 per unit while buying solar-generated power at a significantly lower price.
Butt warned that these changes could effectively double the payback period for a standard 10-kilowatt solar installation, extending it beyond the global benchmark of five years. This policy shift threatens over 45,000 jobs in installation, maintenance, and manufacturing, as power utilities aim to protect revenues amid reduced demand due to the growth of on-grid solar capacity, which now exceeds 6,000 megawatts.
He further argued that the transition to net billing creates a disparity between compensation for solar power and consumer rates, effectively introducing a "solar tax." Butt criticized the policy for lacking foresight and warned that it could keep Pakistan reliant on expensive, long-term, and polluting energy sources. He noted that solar energy expansion has already helped reduce the nation's annual fuel import bill, and World Bank projections indicate the sector could generate over 200,000 jobs by 2030.
A 20 percent decline in grid electricity demand has left several major fossil-fuel power plants operating below capacity, exacerbating financial pressures on the energy sector. Butt questioned the fairness of the situation, asking why the public should bear the consequences of agreements they did not make.
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