Tariff plan for rooftop solar panel users shared with IMF

ISLAMABAD: The government has shared a plan with the visiting International Monetary Fund (IMF) mission to rationalise the electricity tariff for net metering of solar panel owners. Under the proposed plan, surplus units generated by solar panel owners would be purchased by the government at significantly lower rates.

Currently, surplus units are purchased at Rs27 per unit, but the government now proposes to reduce this rate to approximately Rs10 per unit. However, the IMF raised concerns over how the government would address the issue of solar panel owners who remain off-grid.

While the government has not yet provided a firm commitment, the IMF has flagged this issue, citing reports of a rapid increase in solar installations. These reports suggest that the growing trend of solar adoption could escalate in the coming months and years, potentially creating challenges for the overall efficiency of the power sector.

On the other hand, the government has informed the IMF about the need to rationalise power tariffs. Currently, there are 104 power plants operating across the country, of which 18 are government-owned and 86 are independent power producers (IPPs). So far, the government has terminated five inefficient power plants and successfully negotiated tariff reductions with 14 IPPs. Additionally, tariff reductions have been achieved for eight bagasse-based IPPs. “The government is now renegotiating with the remaining IPPs. There is also a proposal to utilise the available fiscal space created by the reduced debt servicing burden, which amounts to Rs1.3 trillion. These measures will help the government lower the baseline tariff,” confirmed top official sources while speaking to The News on Thursday.