Govt set to replace net metering system with net billing policy

• Solar electricity exported to grid to be credited at lower rate.
• Previously units imported and exported were balanced one-for-one.
• Got, Discos term it necessary to cover grid infrastructure costs. 

LAHORE: Marking a major policy shift with wide-ranging implications, the federal government has initiated the process to abolish the net metering system and replace it with a net billing policy, The News reported on Wednesday.

Under the previous system, electricity units imported from and exported to the grid were balanced one-for-one at comparable retail rates.

Whereas as per the new policy, electricity drawn from the grid will be charged at the full national tariff, while solar electricity exported back to the grid will be credited at a significantly lower differential rate.

The economic impact of this policy U-turn is expected to be severe; a consumer exporting 300 units and importing a similar volume could now face a bill of approximately Rs10,000, compared to nearly zero under the outgoing system.

The government and power distribution companies (Discos) have defended the change, saying it is necessary to cover grid infrastructure costs and mitigate alleged revenue losses.

However, critics argue that it effectively penalises consumers who invested their own funds to strengthen national energy capacity.

The shift comes amid ongoing systemic issues, including a backlog of pending net-metering applications that Discos have yet to resolve.

Additionally, thousands of installed solar systems remain unmetered and unconnected.

Distribution companies such as Lesco have also suspended new solar meter installation cases following directives from the federal ministry.

Nepra recommends gross metering

Last month, the National Electric Power Regulatory Authority (Nepra) had recommended replacing the existing net metering system with a gross metering mechanism for rooftop solar consumers, citing a growing financial burden on conventional grid users.

Under the proposed Nepra Prosumer Regulations (NPR), a newly drafted 18-page document uploaded to the regulator’s website, future domestic solar consumers will trade electricity with their respective distribution companies (Discos) through gross metering rather than net metering.

However, existing net metering consumers with valid seven-year contracts will continue to sell their surplus electricity at Rs22 per unit until the expiry of their agreements.

For new solar installations, electricity exports will be compensated under a gross metering framework at a proposed buyback tariff of Rs11.30 per unit. These contracts will be valid for five years and may be extended on a mutual basis. Nepra has invited feedback from stakeholders and consumers in 30 days and may hold a public hearing before finalising the regulations, an official said.

Under net metering, electricity exported to the grid is adjusted against electricity imported, reducing consumers’ bills. In contrast, gross metering compensates consumers at a fixed feed-in tariff for all electricity generated and exported, while electricity consumed from the grid is billed separately at retail tariffs.