Monday July 15, 2024

Mystery continues to shroud net metering regime

Federal Minister Awais Leghari has denied that there will be no change in the existing net metering system

By Khalid Mustafa
June 06, 2024
Technicians work on a solar panel at a power station. — Reuters/File
Technicians work on a solar panel at a power station. — Reuters/File

ISLAMABAD: Mystery continues to shroud the government’s bid mentioned in official documents to introduce changes in solar panel policy and replace net metering with gross metering system.

Federal Minister for Power Division Sardar Awais Ahmad Khan Leghari has consistently denied that there will be no change in the existing net metering system.

The minister vehemently said that net metering would continue and rejected reports about abolition of net-metering system that caused disquiet among masses. An official document from the Prime Minister’s Office (PMO), on its directions after sectoral briefings on the power sector held on April 4, 2024, has certain details.

The official document mentions the issue of net metering tariff rationalisation, directing the Power Division to move a summary on conversion of existing net-metering regime to gross billing with rates of import and export of units.

The Power Division was also directed to create separate categories of those who installed solar panels on their roofs with inclusion or otherwise of fixed charges. The Power Division was also directed for revision of buyback rates and amendment to the net-metering regulations with a dynamic formula to determine a reasonable pay-back period.

This is a fact that so far solar panel electricity of 1,938 MWs has been installed in the country till March 2024, solar panels of 6,800 MWs have been imported and if masses manage to install all the imported solar panels on their roofs, the rooftop electricity generation would increase to almost 9,000 MWs.

Everyone knows that in the winter season, the whole demand of electricity comes down in the range of 10,000-12,000 MWs a day. This means that electricity from the national grid will be 3,000 MW for usage purposes and this will pose the biggest-ever challenge for the government on how to force people not to go for net metering and use electricity from the national grid. Otherwise, the capacity payment issue will soar manifold.

The government is now left with no option but to introduce efficiency in its system by reducing theft and transmission and distribution losses. Through efficiency gains, electricity tariff could be lowered down to an affordable level, which can keep consumers away from adopting the net metering system.

The IMF has also been told almost 1,938 MWs of electricity has been added to the system through rooftop solar systems under net-metering mode. Because of this, revenue loss of Rs100 billion in the system has been shifted to consumers by passing a hike of tariff of Rs1.90 per unit on those who have not installed solar system on their roofs.

The fund was briefed that some changes are being introduced in the policy about solar panels being installed by masses. The government would introduce gross metering instead of net metering system. Tariff would be reduced to Rs7.5 to 11 per unit instead of Rs21. They will be provided electricity from national grid at Rs60 per unit during night or peak hours.

The IMF has been sensitised that the country’s national grid is currently providing service to rooftop solar consumers against the cost of storing electricity through batteries with huge impact to the system. If a consumer has roof solar system detached from the national grid, he would have to install huge batteries to store solar energy for consumption during night-time. The per unit cost he would brave will stand at 20 cents or Rs60. Under the new policy, buy-back tariff from solar consumers would be brought down to Rs7.5-11 per unit keeping in view the massive decline in solar panels prices. Electricity would be provided to them from the national grid at Rs60 per unit during nighttime or peak hours. Under the gross metering system.