The Pakistan Solar Association (PSA) shows concerns about the current net metering policy system of Pakistan by pointing out the new amendments made for net metering users by minimizing the repurchasing rates, The PSA says it will heavily damage the consumer’s savings and reduce their investment return rate and which laid to make consumers investment unsecure.
Net Metering Policy The PSA Report
According to the association, this decision will impact consumers a lot by reducing their savings up to 85 percent.PSA shows their concerns about the decision on the repurchasing fixed rate of Rs 10 for the electricity that is generated with the help of solar panels and that is supplied back to the national grid. The Pakistan Solar Association (PSA), in a letter to Prime Minister Shehbaz Sharif and Power Minister Awais Leghari, raised a strong objection to the government’s plan to discontinue the current unit-to-unit net metering policy.
Addressing the Current Policy
Now, in the current system, Solar users can reduce their electricity bills by exporting the electricity back to the national grid and can balance out imported electricity that costs Rs. 50–70 per unit. If someone uses 1000 units and then sends back the same amount to the national grid, means no bill, and they can save up to 50,000-70,000 per month.
But in the new system, in which the repurchasing rate is RS 10 means one can save up to 10,000 for 1000 units they consumed in a month, and the consumers have to pay the full amount for the grid electricity they used to meet their needs. This means one can lose more than 80% of their savings for electricity.
Equation
Old Net Metering System (Unit-for-Unit)
Imported Units: 1,000
Exported Units: 1,000
Import Cost: Rs. 50–70 per unit
Bill: Rs. 0
Savings: Rs. 50,000–70,000Why? Because 1,000 units used = 1,000 units sent back → no payment.
New Proposed System (Buyback Rs. 10)
Imported Units: 1,000 x Rs. 50 = Rs. 50,000
Exported Units: 1,000 x Rs. 10 = Rs. 10,000
Final Bill: Rs. 50,000 – Rs. 10,000 = Rs. 40,000
Savings Lost: Rs. 40,000 to 60,000 (80%+)Result: One should pay the full price and can save a little on their investment.
Return Period for Investors
PSA also explained in this proposed system that the return period for solar systems may increase the typical return period is between 2- 2.5 years. But in this system, it takes much more time than ever to secure the investment and can pay an additional burden on small solar systems that is more often used for households or for the small businesses.
PSA Concerns on Sales Tax
The PSA raised concerns over the new 18% sales tax on electricity that is exported with the help of solar panels back to the grid. They explained that under this rule, electricity companies would charge tax on the full supply, even when solar users send electricity back to the grid. In most countries, the return rate is zero for electricity that is generated with solar panels that allow more people to shift on solar energy.
Role of IPPs
According to the association, this decision brings more power to IPPs and we can rely on them for a longer time and will pay heavily in terms of electricity charges and the traffic will remain very high, and Pakistan cannot achieve their target of 30% renewable energy resources till 2030.
PSA Suggestion for Future
In their suggestion to the Government, they wrote that Pakistan could become more successful if the formed a partnership with India, Bangladesh, or other SAARC countries by forming an industry experts committee under the Economic Coordination Committee and Ministry of Energy to achieve their future goals for renewable energy.
Conclusion
They also suggest not making any policy that is related to solar energy for more than one year and keep working on the older policy which attarcts more investors and will bring more stability to the solar market.
