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ISLAMABAD: Federal Minister for Power Division Sardar Awais Ahmad Khan Leghari has announced plans to submit a new solar panel policy to the Economic Coordination Committee (ECC) for approval. The proposed policy suggests that the national grid will buy power from newly installed rooftop solar systems at rates between Rs9.50 and Rs10 per unit. This initiative is designed to help consumers recover their solar investments within 4 to 5 years, making it a cost-effective choice for both residential and business users.
In an interview with a private news channel, the minister affirmed that current agreements for existing rooftop solar setups, which sell electricity to the grid at Rs27 per unit, will remain valid. However, he cautioned that maintaining the present system could lead to an additional Rs600 billion annually in net metering costs, potentially raising power tariffs by Rs5 to Rs6 per unit.
Leghari also discussed the issue of circular debt, which surged by Rs1,580 billion during the previous PTI administration. He credited the last PDM government and the current administration for stabilizing the situation. Although the debt increased by Rs80 billion last year, improved management of distribution companies (DISCOs) and savings from reduced discount rates are expected to bring it down this year.
Out of the total Rs2,400 billion in circular debt, some payments are owed to government-owned power plants but will not attract interest. Additionally, the government has renegotiated contracts with independent power producers (IPPs), eliminating late payment surcharges worth Rs460 billion. Further reductions are anticipated as more IPP contracts are restructured.
To address the debt issue, the government is negotiating a Rs1,200 billion loan from commercial banks, repayable over 5 to 6 years through the existing Rs2.83 per unit surcharge on electricity bills, without imposing additional charges. The minister also mentioned that the IMF has not raised concerns about proposed tax cuts on electricity, indicating confidence in the government’s power sector reforms.
