Recent experience in California has shown that changes in incentives have a huge impact on residential adoption of solar power technology. Since the introduction of NEM 3.0 last year, new rooftop solar business in California has dramatically slowed. New residential solar installation applications have plunged 80%, according to Cal Matters. This has driven many solar installers out of business. The business that remains is mostly focused on adding batteries to existing solar installations.
California Net Energy Metering (NEM 3.0) was launched last year after heavy lobbying by the state's utility companies like PGE and SoCal Edison. It has reduced payments for the excess power exported by the consumer to the grid by 75%. This change means that the consumer is better off with storage batteries to maximize self-consumption of the power generated by the solar panels. Companies such as Tesla Solar with its PowerWall 3 battery are the main beneficiaries of this change.
With rapidly falling solar panel prices, Pakistan is experiencing a
solar power boom. The country imported some 13 gigawatts of solar modules in the first six months of the year, making it the third-largest destination for Chinese exporters, according to
Bloomberg. In addition, there is approximately 2.2 gigawatts (GW) of net-metered rooftop solar PV capacity connected to the grid by June 2024, according to
IEEFA.
What is likely to happen to this
solar boom as Islamabad considers changes to its
net metering policy? A recent study published by the Institute for Energy Economics and Financial Analysis (
IEEFA) attempts to answer this question.
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Net Metering vs Net Billing Payback Period in Pakistan. Source: IEEFA
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There are several proposals under consideration by the Pakistani government to change its net metering policy. All are designed to significantly reduce payments to the consumer for energy exported to the grid. One of these proposals likely to be adopted is to switch from "Net Metering" to "Net Billing".
Net metering transactions are usually one-to-one, so the credits are often equal to the retail rate of electricity (aka what you pay). Net billing credits are often equal to the wholesale rate of electricity (aka what your utility pays), which is less than the retail rate, according to
Energy Sage. Utilities tend to oppose net metering programs, so alternative compensation programs are increasingly being used.
Analysis by Haneea Isaad, an Energy Finance Specialist at
IEEFA, shows that the switch from net metering to net billing would still reduce the payback period for 5kW to 25kW solar systems combined with 50% to 70% self-consumption. She concludes that the payback period will be well under 4 years for a system that has a life of 25 to 30 years. It is better than the 5-year payback period in California under NEM 3.0.
Would consumers without solar be stuck with high electricity bills? It is quite likely because capacity charges paid to independent power producers (IPPs) accounted for 62% of energy expenditure in Pakistan for the 2023-2024 fiscal year. For the 2024-2025 fiscal year, 64% of the total power purchase price is expected to be fixed capacity costs. Lower consumption of grid electricity will result in a disproportionate impact on consumers who rely entirely on grid power.
Higher levels of self-consumption closer to 100% would require larger batteries which are still quite expensive in Pakistan. This is likely to change as traditional lead-acid battery makers switch to lithium ion batteries in the country. Recent launches of
electric vehicle assembly plants in Pakistan are expected to boost the lithium-ion battery production and bring down prices in the country in the coming years, according to
Mordor Intelligence.
Riaz Haq
Pakistan to Add Over 2,600 MW Through Solar Net Metering in FY2025–26
https://tribune.com.pk/story/2550583/solar-net-metering-to-add-over....
The number of net metering consumers is also expected to grow by 197,655, contributing to the Sustainable Development Goal (SDG) indicator through increasing the share of renewable energy in total energy consumption and supporting grid stability.
At that point, the generation mix is projected to comprise approximately 50.5% from renewable sources (including hydel, solar, solar net metering, wind and bagasse) and 49.5% from thermal sources (such as coal, gas, re-gasified liquefied natural gas, oil and nuclear).
The power sector will receive a public investment of Rs161,635 million from the Public Sector Development Programme (PSDP) of FY26, including government-budgeted/self-finance projects of power companies, excluding independent power producers (IPPs).
The government plans to execute 63 projects.
These investments will contribute directly to the achievement of SDGs through distribution and transmission projects aimed at increasing access to electricity and through power generation projects by enhancing the share of renewable energy.
By the end of June 2026, the transmission sector will be boosted by an additional capacity of 5,550, 4,710 and 1,300 MVA on 500-kilovolt, 220kV and high-voltage, direct-current (HVDC) grids, respectively.
These transmission lines will be extended by 170 km (500kV), 355 km (220kV) and 137 km (±660kV). Additionally, one new grid station will be established at the 765kV level and two at the 220kV level.
To increase the proportion of population having access to electricity, the targeted investment in power distribution will lead to the electrification of 15,352 villages and the addition of 1.861 million new consumer connections during FY26.
These efforts will directly expand electricity access across urban and rural areas.
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Pakistan to Add Over 2,600 MW Through Solar Net Metering in FY2025–26
Pakistan is making a big leap in renewable energy. According to the Annual Plan 2025–26, 2,800 megawatts will be added to the grid next year, 2,633 MW of which will come from solar net metering.
This shift highlights growing public participation in clean energy production, despite an already surplus generation capacity.
Jun 16
Riaz Haq
Pakistan's solar surge lifts it into rarefied 25% club
https://www.reuters.com/markets/commodities/pakistans-solar-surge-l...
(Reuters) - Pakistan is rapidly emerging as a key leader in solar power deployment, and not just within emerging economies.
The South Asian country has boosted solar electricity generation by over three times the global average so far this year, fuelled by a more than fivefold rise in solar capacity imports since 2022, according to data from Ember.
That combination of rapidly rising capacity and generation has propelled solar power from Pakistan's fifth-largest electricity source in 2023 to its largest in 2025.
What's more, so far in 2025 solar power has accounted for 25% of Pakistan's utility-supplied electricity, which makes it one of fewer than 20 nations globally that have sourced a quarter or more of monthly electricity supplies from solar farms.
EXCLUSIVE CLUB
Over the first four months of 2025, solar farms generated an average of 25.3% of Pakistan's utility electricity supplies, Ember data shows.
That average compares with a solar share of 8% globally, around 11% in China, 8% in the United States and 7% in Europe.
And while the average solar shares in the Northern Hemisphere will climb steadily through the summer months, very few countries will even come close to securing a quarter of all utility electricity supplies from solar farms any time soon.
Indeed, only 17 countries have ever registered a 25% or more share of monthly utility electricity supplies from solar farms, according to Ember.
Those nations are: Australia, Belgium, Bulgaria, Chile, Cyprus, Denmark, Estonia, Germany, Greece, Hungary, Latvia, Lithuania, Luxembourg, the Netherlands, Pakistan, Portugal and Spain.
That list is heavily skewed towards Europe, where the power sector shock from Russia's full-scale invasion of Ukraine in 2022 sparked urgent and widespread power-sector reform and the rapid roll-out of renewable generation capacity.
ndeed, Australia and Chile are the only nations aside from Pakistan that are outside Europe, and all included nations boast a far higher gross domestic product (GDP) per capita than Pakistan.
IMPORT DRIVE
The chief driver of Pakistan's solar surge has been an accelerating import binge of solar capacity modules from China.
Between 2022 and 2024, Pakistan's imports of China-made solar components jumped fivefold from around 3,500 megawatts (MW) to a record 16,600 MW, according to Ember.
Pakistan's share of China's total solar module exports also rose sharply, from 2% in 2022 to nearly 7% in 2024.
And that import binge has continued into 2025.
Over the first four months of the year, Pakistan imported just over 10,000 MW of solar components from China, compared with around 8,500 MW during the same period in 2024.
That rise of nearly 18% in imported capacity has lifted Pakistan's share of China's solar exports to new highs too, with Pakistan accounting for around 12% of all of China's solar exports so far this year.
SOLAR-CENTRIC
The frantic deployment of imported solar modules across Pakistan in recent years has upended the country's electricity generation mix.
So far in 2025, solar is by far the single largest source of electricity, followed by natural gas, nuclear reactors, coal plants and hydro dams.
on Tuesday
Riaz Haq
Pakistan's solar surge lifts it into rarefied 25% club
https://www.reuters.com/markets/commodities/pakistans-solar-surge-l...
As solar farms were the fifth-largest supply source for electricity just two years ago, solar's pre-eminence so far this marks a sharp swing towards renewables within the country's utility network.
In addition, the country is committed to much more growth in renewable energy generation capacity through the rest of this decade.
Pakistan is targeting 60% of electricity supplies to come from renewable sources by 2030, according to the International Trade Administration.
Through the first four months of 2025, renewable energy sources generated 28% of the country's electricity, so energy planners are aiming for a more than doubling in that share by the end of the decade.
With solar modules representing the quickest and cheapest means to meet those goals, further rapid build-out of the country's solar farm system looks likely, which will cement Pakistan's status as a global solar superpower.
on Tuesday