New solar panel policy to be presented before ECC soon: Leghari

ISLAMABAD: Federal Minister for Power Division Sardar Awais Ahmad Khan Leghari has announced that a summary for the approval of a new solar panel policy will soon be presented to the Economic Coordination Committee (ECC).

Under this policy, the grid will purchase electricity from newly installed rooftop solar panels at a rate of Rs9.50 to Rs10 per unit. Consumers, who adopt this solar panel facility, are expected to recover their investment in just 4-5 years, making it a highly beneficial option for residential and commercial users.

While speaking on Geo News programme, Naya Pakistan, he said the government, however, would continue to honour the contracts of the already installed rooftop solar panels by getting their electricity at a rate of Rs27 per unit to maintain its integrity. The minister feared if the status quo continues, then because of the increasing net metering, the additional burden on consumers would exceed Rs600 billion per annum and they would have to pay Rs5-6 per unit more.

The minister mentioned that the circular debt swelled upward by Rs1,580 billion in the PTI government, but the last PDM government and the incumbent regime have managed to keep the circular debt flat. He said last year, the circular debt increased by Rs80 billion, but in the current financial year, the government would be able to reduce it because of better management of DISCOs and savings due to lower discount rates.

“Out of Rs2,400 billion circular debt, we have to pay some dues to the government power plants, but they would not be paid interest on dues.” With the revision of contracts with independent power producers (IPPs), the government has also managed to have the late payment surcharge waived off from the IPPs amounting to Rs460 billion, and this relief would further increase when the contracts of remaining IPPs would be revised. So the government is in talks with the commercial banks to borrow the loan of Rs1,200 billion, which will be paid in 5-6 years through the existing surcharge of Rs2.83 per unit on electricity bills. After that, circular debt would be no more in the system.

To a question, the minister said there would be no more surcharge to pay the loan of Rs1,200 billion to be borrowed from commercial banks, as the existing surcharge of Rs2.83 per unit has ample room to pay the loan. He said through efficiency in the DISCOs and with more lowering in the discount rate, circular debt will be paid off.

To a question, the minister said the government was trying to lower the electricity rate to an affordable level and increase the healthy demand of the industry to keep the masses rely on the grid power. “The prime minister himself is leading the initiatives to this effect and the government would soon announce some of them.”

The minister said the government had managed the relief of Rs3.50 per unit so far after the revised contracts with the IPPs and in the months to come, this relief would increase after talks with more IPPs. The IMF has not objected to the proposed cut in taxes on electricity, rather it has minutely examined the power sector reforms and meetings with the Fund people remained very good. The IMF has realised that the government much serious about implementation of power sector reforms. The minister hoped that the IMF would give space to the government to raise the dying power grid system on its feet.