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Pakistan’s Power Division is working on a proposal to reduce financial returns on solar net metering, making it harder for solar panel owners to recover their investment quickly.
The plan, spearheaded by Power Minister Awais Leghari, aims to extend the break-even period from 1.5 years to up to 3 years, significantly dampening the incentive to adopt solar energy at the household level.
Speaking at a press conference, Leghari confirmed that the Power Division has submitted a summary to the federal cabinet for approval. The proposal includes changes to solar net metering policies and the formal introduction of wheeling charges, fees charged by power distribution companies (Discos) for transporting electricity through their infrastructure. These changes are part of a broader plan to streamline Pakistan’s transition to a competitive power trading market.
Wheeling Charges and Competitive Power Sales
By locking in wheeling charges, the government hopes to create a predictable structure for industries that could benefit from surplus electricity at competitive rates. Islamabad reportedly aims to offer over 6,000 megawatts (MW) of excess power to energy-intensive sectors like crypto mining and data centers.
This isn’t the first time such a move has been considered. Back in June 2025, the government attempted to gain a waiver to offer 7,000 MW of surplus electricity at reduced rates to boost industrial usage. However, the attempt faced resistance.
The International Monetary Fund (IMF) remains skeptical of the plan, citing past instances where similar energy subsidies contributed to economic instability. The Power Minister revealed that negotiations with the IMF are ongoing, particularly concerning the risks of offering lower power tariffs to new entrants.
Minister Leghari argues that controlling the rise of solar net metering, while channeling excess electricity to high-output industries, could offer some relief to consumers by stabilizing electricity prices. However, he clarified that tariffs would not decrease, only remain stable for the time being.
Analysts Propose Long-Term Fix
Energy analysts suggest that a more sustainable solution to Pakistan’s surplus power issue lies in terminating outdated Power Purchase Agreements (PPAs). Such a move, they argue, could lighten the financial load on consumers while paving the way for more efficient energy usage.
While the plan may appeal to industrial sectors and help the government manage surplus electricity, the solar energy community faces a potential setback. With reduced returns on investment and longer break-even periods, solar adoption could slow, complicating Pakistan’s shift to cleaner energy alternatives.
