Bad news for solar power consumers in Pakistan

The coalition government has proposed a significant cut in solar net metering rates, reducing the rate for surplus electricity from Rs27 per unit to approximately Rs10 per unit.

The proposal aims to restructure tariffs for solar panel owners participating in net metering.

The plan is expected to be discussed during the $7 billion program review with the International Monetary Fund (IMF), as concerns have been raised about the increasing number of off-grid solar panel owners and the government's ability to regulate the trend.

The IMF has urged Pakistan to develop a comprehensive approach to managing the growing adoption of solar energy.

Officials highlighted that the federal government has already taken steps to rationalize power tariffs, including shutting down inefficient power plants and negotiating cost reductions with Independent Power Producers (IPPs).

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Additionally, authorities are considering using the Rs1.3 trillion fiscal space from reduced debt servicing costs to lower baseline electricity tariffs.

These measures are part of a broader strategy to address IMF concerns, enhance the efficiency of the power sector, and adapt to the increasing role of solar energy in Pakistan’s energy landscape.