4 min read
Despite earlier incentives that fueled widespread solar adoption, the proposed reduction in the buyback rate, from Rs27 to Rs11 per unit, has sparked intense backlash. Prime Minister Shehbaz Sharif has, for the second time, paused implementation of the new policy and directed the Power Division to consult all stakeholders before moving forward. However, the shift has already raised concerns over long-term investor confidence and policy consistency.
The country’s power sector is facing renewed uncertainty as the government’s proposed changes to the solar net metering policy cast a shadow over its clean energy transition. Once a vocal advocate of rooftop solar, the state is now retreating from earlier commitments, prompting strong reactions from industry leaders, energy experts, and affected citizens.
Electricity demand in the country reaches around 29,000 megawatts (MW) during peak summer, while installed generation capacity exceeds 46,000 MW. Yet the power sector suffers from inefficient utilisation, outdated grid infrastructure, and growing reliance on imported fuels. Solar energy, despite contributing approximately 5 percent of total electricity in 2025, now faces new regulatory barriers under the evolving solar net metering policy.
From 2022 to 2024, rooftop solar installations surged as households and businesses embraced net metering, encouraged by attractive tariffs and government support. Official data shows that net-metered capacity rose from just over 300 MW in 2021 to 2,813 MW by the end of FY25, with more than 280,000 households enrolled. But the sudden policy reversal has thrown this progress into question.
Policy Inconsistency Undermines Solar Momentum and Investor Confidence
“The solar transition, once seen as a cornerstone of our energy future, is now treated like an inconvenience,” said Mian Sohail Nisar, Patron-in-Chief of the Pakistan Industrial and Traders Associations Front. “The government promoted it, but now refuses to integrate it into the grid with a clear, long-term vision. This inconsistency is undermining public trust and investor confidence.”
Experts argue the revised policy is a financial response to stress on the national grid. With solar users reducing their grid reliance and selling surplus power at high rates, utility companies claim they are struggling to recover infrastructure costs. In 2024 alone, the cost burden passed on to non-solar consumers was estimated at Rs159 billion, with projections suggesting a potential rise to over Rs4,000 billion in the next decade if left unchecked.
Adding to the financial strain, a recent audit report by the Auditor General of Pakistan has uncovered widespread overbilling practices by power distribution companies (DISCOs), further compounding public frustration and distrust. These revelations suggest that a significant part of the energy sector’s financial woes may be rooted not in consumer behavior, but in systemic inefficiencies and mismanagement within the distribution network.
A former official from the power sector said the real issue isn’t solar energy; it’s poor planning. “The government never upgraded the distribution network to manage reverse flows. Now they’re blaming solar users for inefficiencies rooted in outdated systems.”
He noted that the proposed gross metering model, which charges separately for imported and exported electricity, might be technically sound but has been rolled out without warning. “Such policies should be introduced gradually and through consultation. What we’re seeing now is a rushed decision driven by short-term fiscal pressure.”
For consumers who made significant investments under earlier incentives, the change feels like a betrayal. Many installed hybrid inverters and batteries to reduce their dependency on the grid, expecting long-term gains. Now, they face reduced returns, vague billing systems, and reports of smart meters being replaced without consent.
A History of U-Turns
The inconsistency in energy policy is not a new phenomenon. Successive governments have launched and abandoned plans, whether for hydropower, LNG, or renewables, often influenced by political shifts, pressure from power companies, or International Monetary Fund (IMF)-mandated reforms.
Energy analyst Syed Farid Hussain said the absence of a cohesive national roadmap remains the sector’s biggest flaw. “A clean energy shift requires aligned upgrades in grid systems, pricing mechanisms, and consumer protections. We’re missing that coordination.”
With circular debt in the power sector now exceeding Rs2.6 trillion, the state faces growing pressure to cut losses or increase tariffs. Critics argue that instead of reforming loss-making power distribution companies or curbing electricity theft, the government is placing the burden on solar users, those who responded to its calls for clean energy adoption.
“What we need is a structural, irreversible approach to energy policy,” added Sohail Nisar. “These constant U-turns are sabotaging the country’s energy future. Without clarity and commitment, we risk turning away from the very solutions that could power us forward.”
