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The federal government has made a significant policy shift by deciding to delay the approval of the controversial solar net metering policy. The decision, which was originally intended to reduce the buyback tariff for solar energy producers, was postponed following intense discussions during a cabinet meeting chaired by Prime Minister Shahbaz Sharif on Wednesday.
Sources reveal that the cabinet members, including the Prime Minister himself, expressed strong reservations about the proposed changes. This policy proposed to decrease the buyback rate from Rs. 27 per unit to Rs. 8-9 per unit to help grid consumers alleviate financial strain. Stakeholders, including solar energy customers, expressed concern regarding the potential decline in renewable energy operations as a result of the substantial rate reduction.
The Power Division is currently responsible for the development of an updated policy, following the cabinet’s directive to solicit a broader range of input during the revision process. According to government officials, the implementation of repurchase rate reductions would establish a cost equilibrium between solar power users and power utility consumers, whose electricity expenses were increasing.
The policy’s postponement emerges as Pakistan seeks solutions to its economic challenges while officials work to establish stability alongside growth. The prime minister leveraged the moment to demonstrate Pakistan’s recent success at securing an IMF staff-level agreement that secured $1.3 billion for climate change initiatives among the larger $7 billion Extended Fund Facility programme.
The cabinet determined to prioritise other regulatory decisions, including the agreement to operate bagasse power plants under the newly proposed terms and the reduction of power costs as a result of petroleum price reductions. With the passage of the Whistleblower Protection and Vigilance Commission Act, 2025, another cabinet sanction was granted to modify tax laws within Islamabad and to support transparency measures.
As discussions continue, the country’s renewable energy future remains uncertain, with many eagerly awaiting the revised policy that will take into account both environmental goals and the financial well-being of all consumers.
