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Nearly 4,000 new net metering licenses have been issued in Pakistan in the July-September quarter, up from 2,000 in the same quarter last year. Vast majority of these are for solar photo-voltaic installation. Net metering solar installations are in addition to the rapidly growing off-grid solar panels across Pakistan. Higher electric utility (DISCO) bills and lower cost of solar panels appear to be driving the adoption of solar in Pakistan. Net metering allows users with private renewable energy production plants to connect to the electric grid and sell excess power to the local electric utility or DISCOs such as K-Electric, LESCO or IESCO in Pakistan.
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Net Metering Installations in Pakistan. Source: Jeremy Higgs |
This year has seen the fastest growth in net energy metering (NEM) growth since Pakistan launched its first NEM policy in 2015, according to data shared by Jeremy Higgs, director of operations for Islamabad-based EcoEnergy. Total number of net metering installations in Pakistan is about 16,000, according to Jeremy Higgs. National Electric Power Regulatory Authority (NEPRA) issued 3,334 net metering licenses with total installed capacity of 56.86 megawatt under the net-metering regime during 2019-20, according to an October, 2020 news report.
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Net Metering Installations By DISCOs in Pakistan. Source: Jeremy Higgs |
Surprisingly, Pakistan's biggest city Karachi is lagging significantly behind Lahore and Islamabad in net metering licenses. Nearly 25% of all net metering licenses in Pakistan were issued by LESCO (Lahore Electric Supply Company) in the July-September quarter. IESCO (Islamabad Electric Supply Company) has handed out 20% and K-Electric (Karachi Electric) 15%.
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Top 10 Solar Energy Countries in 2017. Source: USAID |
Back in 2017, Pakistan was ranked among the top 10 countries for investment in solar PV projects below 1 MW. Pakistan PSLM/HIES 2018-19 survey results revealed that 15.2% of all households are using solar panels as a source of energy for their homes.
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Pakistan Solar Panel Imports in Millions of US Dollars. Source: FBS... |
Khyber-Pakhtunkhwa province leads the nation with 40% of all households using solar energy. Rural Pakistan is embracing solar power at a faster rate than Urban Pakistan. Adoption of solar in rural areas of KP is at 43%, Sindh 33.9%, Balochistan 20.4% and Punjab 7.9%. Rapid decline in cost of solar panels appears to be driving the adoption of solar in Pakistan's rural areas where grid power is either unavailable or unreliable.
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Giving A Fair Deal To Distributed Solar In Pakistan
The author is a freelance contributor interested in sustainable energy and power sector policy, planning, and development. He can be reached at: msrahim@hotmail.com
https://thefridaytimes.com/18-Aug-2024/giving-a-fair-deal-to-distri...
Distributed solar needs a level-playing field to compete with conventional options. Government should provide an enabling legal, regulatory umbrella and an equitable decision-making framework to objectively evaluate every option
For much of its history, the electric supply industry (ESI) in Pakistan has enjoyed the status of being the most stable business and a favourite of investors. This was mainly due to "economies of scale" in generation, extended distances between load centres and good generation sites (especially, hydro), and the benefits that interconnecting isolated systems offered by way of reserve sharing, energy trading, and reliability. Alas, no more!
The advent of small gas-fired combined cycle power plants has ended the golden era of the large, central-station supply systems. Distributed energy generation technologies, particularly solar photovoltaic (PV), have dealt the proverbial death blow to the unchallenged reign of the traditional way of governing the ESI — using a central-station portfolio of mega-sized generation projects and delivering electricity produced by them to loads located far away.
Distributed solar technologies—located behind-the-metre or anywhere else in the distribution system—have been making rapid inroads into power grids across the world. Pakistan is no exception.
Pakistan did show an interest in solar technologies, but this has remained focused on their deployment in the power grid. Though important, it's not the only or even the best avenue for their uptake. The only initiative from the government to promote distributed solar has been its net metering schemeintroduced in 2015. Most other behind-the-metre solar PV systems have not merited any incentive from our governments.
Precise statistics for distributed solar in the country are not available from official sources but a recent report by "pv magazine" terms it "booming" as the import of PV panels saw a rise from 2.8 GigaWatt (GW) in 2022 to 5 GW in 2023 and may reach 12 GW in 2024. By June 2023, the total number of net metering connections had reached 63,703 with a cumulative capacity of 1,505 MW. The annual addition of new consumers to this list was around 1,596, with a cumulative capacity of 221 MW in 2023.
These statistics indicate that the number of net metering connections and their magnitude are still low, but electricity consumers in Pakistan are opting for non-grid interactive systems in rapid strides to reduce their electricity bills which have become unaffordable.
The rigid mindset of power sector functionaries, from top to bottom, is directly responsible for this alarming trend. They have treated consumers as captives to the grid and have used them to dump all the misgovernance costs. They are still not willing to wake up to the new reality that the consumers now have multiple choices. Distributed solar is just one of these and is destined to grow even more if the grid supply remains unreliable and expensive.
Distributed solar offers many benefits. It can avoid investments in the grid and reduce losses, help manage demand, support grid operation, avoid environmental pollution, spur local industrialisation, promote employment, reduce reliance on imported fuels, and enhance national security and sustainability.
Their presence in the grid does pose some technical challenges. In addition to the two-way flow of power, they add to issues like loss of frequency and voltage control, risks of backfeed to the upstream transmission systems, and impair the power quality.
Future of Net-Metered Solar Power in Pakistan
https://ieefa.org/resources/future-net-metered-solar-power-pakistan
Pakistan's current Distributed Generation and Net Metering Regulations offer incentives such as high buyback rates, fixed long-term generation licenses, and generous allowances for installed capacity. These have resulted in ideal payback periods, leading to a surge in net-metered rooftop solar photovoltaic (PV) capacity across the country.
The current policy offers 2-4 year payback periods for 5-25 kilowatt (kW) net-metered solar PV systems. Power utilities are concerned that higher penetration of distributed solar could place the distribution infrastructure at risk of failure and increase capacity payments on non-net-metered consumers.
The government is considering reducing buyback rates and a shift to net billing from net metering, which could increase payback periods for consumers with a higher self-consumption ratio but may incentivize oversized systems. A net billing scheme would therefore need to limit system size. Despite all policy shifts, the payback periods remain under 5 years
For the government, while maintaining or improving buyback rates can encourage more renewable energy adoption, this must be combined with grid optimization and digitization. For consumers, choosing the right system size for their consumption profile can significantly impact their return on investment.
Rationalizing Incentives for Solar Photovoltaic (PV) in Pakistan
https://ieefa.org/sites/default/files/2024-08/IEEFA%20Fact%20Sheet_...
The recent surge in rooftop solarization in Pakistan has raised concerns among power distribution companies about
system reliability and increased capacity payments.
The government is considering several changes to current energy policies, including reducing buyback rates,
limiting system sizes, and transitioning from net metering to net billing.
However, even with the proposed changes, the payback period for 5-25 kilowatt (kW) distributed solar PV systems
remains below the 5-year threshold
A mere 50 megawatts (MW) of netmetered solar capacity was added
between 2016 and 2019. However,
consistently high electricity tariffs
and a substantial decline in solar
panel prices have led to a recent
surge in solar PV additions.
Pakistan’s abundant
solar potential offers
specific yields of 3.8
kilowatt-hours per
kilowatt peak (kWh/
kWp) to 6kWh/kWp.
Since 2022, net-metered solar PV
installations have nearly doubled, with
764MW installed in 2023.
In June 2024, Pakistan’s
on-grid net-metered solar PV
capacity was approximately
2200MW.
The recent surge in rooftop solarization in Pakistan has raised concerns among power distribution companies about
system reliability and increased capacity payments.
The government is considering several changes to current energy policies, including reducing buyback rates,
limiting system sizes, and transitioning from net metering to net billing.
However, even with the proposed changes, the payback period for 5-25 kilowatt (kW) distributed solar PV systems
remains below the 5-year threshold
Under the current mechanism, which offers the prevailing National Average Power Purchase Price (NAPPP) of PKR 27 per
kilowatt hour (kWh) as the buyback rate, the relatively higher per kW cost of smaller 5kW and 7.5kW systems results in
extended payback periods ranging between 2.4-4 years. As the system size increases, the payback period decreases, with
a 25kW system recording the shortest payback period of 1.74 years.
• Reducing the buyback rate to the National Average Energy Purchase Price (NAEPP) of PKR 9.69/kWh could lead to a
10%–56% increase in the payback period, depending on the level of consumption and system size. Consumers with smaller
installations and lower consumption experience longer payback periods.
• Reducing the buyback rate to PKR 15/kWh would only result in a 6% increase in the payback period for consumers with
100% self-consumption, while for lower-consumption profiles it may increase by 25%.
• Shifting to a net billing mechanism would increase the payback period for consumers with a higher self-consumption ratio
but could incentivize the installation of oversized systems.
A solar power policy crisis for Pakistan - Asia Times
https://asiatimes.com/2024/05/a-solar-power-policy-crisis-for-pakis...
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As of August 2024, Pakistan's net metering regulations allow excess energy from solar systems to be sold back to the grid at the National Average Power Purchase Price (NAPPP). This price reflects the average cost per unit of power that the DISCOs purchase.
In June 2024, some speculated that the government might introduce changes to the solar panel policy, including a shift from net metering to a gross metering system. However, the Federal Minister for the power division, Ahmed Khan Lagari, has denied these changes and assured the public that the existing net metering system will remain in place.
A bidirectional meter, which measures both the electricity generated and consumed, can help consumers reduce their reliance on expensive grid electricity. This system can also make solar investments financially viable, promote energy independence, and reduce the strain on the national grid.
----------------
Optimizing solar incentives and grid infrastructure in Pakistan can benefit power distribution companies and energy consumers | IEEFA
https://ieefa.org/articles/optimizing-solar-incentives-and-grid-inf...
The regulations created the framework for the successful adoption of distributed renewable energy in the country, with approximately 2.2 gigawatts (GW) of net-metered rooftop solar PV capacity connected to the grid by June 2024.
Recent documents indicate that there are pending applications for solar net metering with a total capacity of 58,822 megawatts (MW), far surpassing the nation’s existing power generation capacity of 46,000 MW, as reported by the National Electric Power Regulatory Authority (NEPRA).
https://www.techjuice.pk/4742-pending-net-metering-applications-exc...
IESCO currently holds the highest number of pending applications, totaling 1,363 requests that amount to a capacity of 12,276 MW. Among the significant backlogs are GEPCO, which has 117 requests totaling 6,282 MW, LESCO with 699 requests for 6,143 MW. Additionally, FESCO has 871 requests amounting to 12,399 MW, while K-Electric has 773 requests for 10,164 MW.
Delays are primarily attributed to the elevated buy-back rates associated with the net metering system. NEPRA has urged for a thoughtful reassessment of the tariff framework to tackle this concern. The authority has proposed that support for individual solar consumers should take precedence over large-scale solar projects to attain more favorable results.
Recent documents reveal that by June 30, 2024, more than 156,372 solar facilities, with a combined capacity of 2,200 MW, were established under the net metering program. The consumer base surged from 75,724 in FY2022-23 to an impressive 157,844 by the conclusion of FY2023-24, marking a significant doubling within a single year.
Update: However, according to the recent update on the NEPRA report, an earlier computation resulted in a 1000-fold misreport of the energy production capacity awaiting applications.
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