The National Electric Power Regulatory Authority (NEPRA) has decided to keep mandatory licensing for solar consumers, rejecting calls for full exemption of small-scale rooftop installations.
Households and businesses installing solar systems between one kilowatt and 25 kilowatts must still obtain a NEPRA generation licence before connecting to the national grid.
While NEPRA has waived the licence fee for systems up to 25 kilowatts, the authority to approve all licences remains exclusively with the regulator across Pakistan.
No net metering application can be processed without a valid NEPRA licence, reinforcing the central and compulsory role of regulator in all solar grid connection approvals.
All applicants must now submit requests through a dedicated online portal, which forwards applications directly to NEPRA for official licensing review and formal approval.
Applications already submitted by existing users are currently under review and are being actively processed for approval by the relevant regulatory authorities at NEPRA.
Power Division Position
Power Division had formally requested NEPRA to remove both licensing requirements and fees for systems up to 25 kilowatts in order to simplify solar adoption procedures.
NEPRA agreed only to waive the fee while keeping both the licensing requirement and the mandatory online processing system fully intact and operational for all users.
A final decision is expected within the current month on whether the licensing requirement for small solar users will be permanently removed or remain in force.
That ruling is expected to significantly influence how rapidly growing solar net metering market in Pakistan develops over the coming months and years ahead.
Background and Policy Shifts
NEPRA had earlier introduced prosumer regulations requiring both a generation licence and a one-time fee of Rs 1,000 per kilowatt for all solar installations including small rooftop systems.
That policy drew widespread criticism for raising costs and slowing solar adoption, prompting Power Division to formally intervene and request a full regulatory rollback from NEPRA.
Following that intervention, the fee was waived for small systems, while installations above 25 kilowatts continue to face regulatory charges and full compliance conditions under existing rules.
Approvals for small-scale solar users are now handled through digital systems linked with distribution companies, shifting away from the earlier centralised processing model used previously.
Solar Growth in Pakistan
Pakistan had approximately 466,000 net-metered solar connections by early 2025, with total grid-connected installed capacity reaching nearly 5.3 gigawatts by April of that year.
Broader estimates including off-grid and distributed systems suggest the total solar capacity of Pakistan may now stand between 27 and 34 gigawatts, largely from rooftop and standalone systems.
Recent estimates indicate that between 15 and 25 percent of Pakistani households are now using solar energy in some form, ranging from basic lighting to full household systems.
In several rural areas of Sindh and Balochistan, solar adoption rates reportedly exceed 50 percent, reflecting deep penetration of solar energy in off-grid communities across those provinces.
Adoption remains strongest in Khyber Pakhtunkhwa and rural regions, where solar powers household lighting, irrigation pumps, fans, and small businesses amid frequent electricity shortages.
The rapid expansion has been driven by soaring electricity costs, an unreliable national grid, and sharply falling prices of imported solar panels across all major Pakistani markets.
