For years, Pakistan’s net metering policy has been the cornerstone of its rooftop solar revolution. By allowing homeowners and businesses to offset their electricity bills by feeding surplus solar power back into the grid, it created a compelling financial case for investing in renewable energy. The result was a visible surge in solar installations across the country, from industrial estates in Lahore to residential rooftops in Karachi. This citizen-led push was not just about reducing bills; it was a pragmatic response to soaring electricity tariffs and frequent load-shedding.
However, in late 2024, the energy landscape was jolted by a proposal from the National Electric Power Regulatory Authority (NEPRA). The regulator suggested a fundamental shift from the existing net metering mechanism to a new gross metering system, with potential implementation as early as 2026. This announcement sparked intense debate, confusion, and concern among solar owners, investors, and environmental advocates. Understanding this shift is crucial, as it will redefine the economics of rooftop solar and determine Pakistan’s renewable energy trajectory for years to come.
The Core Difference: Net Metering vs. Gross Metering
First, let’s demystify the terms.
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Net Metering (The Current System): Under this arrangement, a single, bi-directional meter measures the net difference between the electricity you consume from the grid and the surplus you export to it. If your solar system produces more than you use during the day, the excess flows back to the grid, and your meter literally runs backward, crediting your account. At the end of the billing cycle, you pay only for your “net” consumption. The key here is that the electricity you export is typically credited at or near the same retail rate you pay for consumption (with some minor adjustments). This one-to-one offset makes payback periods attractive, often within 3-5 years.
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Gross Metering (The Proposed System): This model involves two separate meters. One meter measures all the electricity your solar system generates and feeds into the grid. The second meter measures all the electricity you import from the grid for your use. Under this system, you are essentially buying all your power from the distribution company (DISCO) at the standard retail tariff, while simultaneously selling all the power you produce at a separate, pre-determined “buy-back” or feed-in tariff (FiT). Critically, this feed-in tariff is expected to be significantly lower than the retail tariff you pay.
Why the Proposed Shift? NEPRA’s Stated Rationale
NEPRA’s move is framed within the complex challenges of Pakistan’s power sector:
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Revenue Loss for DISCOs: DISCOs argue that net metering causes them a “revenue erosion.” When a consumer offsets expensive grid power with their own solar, the DISCO loses the high-margin sale. With high grid losses and a tariff structure burdened by capacity charges, they claim this loss is unsustainable and unfairly shifts the fixed cost burden of maintaining the grid (wires, transformers, system upkeep) onto non-solar consumers.
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Grid Management and Duck Curve: As solar penetration increases, the midday surge of solar power into the grid can create technical challenges—a phenomenon known as the “duck curve.” This requires DISCOs to quickly ramp down other power sources at noon and ramp them up sharply at sunset, which is operationally difficult and costly with Pakistan’s current grid infrastructure and generation mix.
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Creating a Structured Market: Proponents argue that gross metering creates a clearer, more transparent market structure. It separates the role of the consumer from that of a small-scale independent power producer (IPP). It allows the regulator to set a feed-in tariff that more accurately reflects the “avoided cost” of power for the DISCO, rather than the higher retail price.
How the New Gross Metering Policy is Expected to Work in 2026
While the final regulations are yet to be codified, the operational framework for 2026 would likely resemble the following:
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Installation & Metering: New solar customers (and potentially existing ones moved onto the new regime) will have a generation meter installed by the DISCO, measuring all solar kWh sent to the grid. Their existing import meter will continue to record all power drawn from the grid.
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The Financial Flow:
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You will receive a monthly bill for all imported electricity at the prevailing consumer tariff (which continues to rise).
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You will receive a separate payment or credit for all exported electricity at a fixed feed-in tariff (FiT). This FiT will be set by NEPRA and will be considerably lower than the import tariff—early indications suggest it could be close to the national average power purchase price, which is far lower than retail rates.
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The Net Economic Impact: Your savings will no longer come from a direct one-to-one offset. Instead, they will be the difference between the high cost of imported power and the lower revenue from exported power. This dramatically extends the payback period for a solar investment, potentially doubling it or more. The incentive shifts from drastically reducing your bill to earning a modest return on exported power while still being largely reliant on the grid.
Implications and Stakeholder Reactions
The proposed policy has drawn sharp reactions from various quarters:
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For Prospective Solar Adopters: The business case weakens substantially. The primary motivation to go solar—insulation from relentless tariff hikes—diminishes. Rooftop solar becomes more of an environmental choice or a partial hedge, rather than a clear-cut financial investment. This is likely to cool the booming solar market.
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For Existing Solar Owners: The biggest uncertainty is whether the change will be applied retrospectively. If it is, it would be seen as a “bait-and-switch,” breaching the trust and financial calculations of early adopters who invested under the net metering rules. A grandfather clause protecting existing installations is a major demand.
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For DISCOs and the National Grid: In the short term, DISCOs would see improved revenue streams. However, the policy may disincentivize the very distributed generation that can reduce peak summer load on the grid and lower technical losses. It could paradoxically perpetuate reliance on expensive centralized power plants.
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For Pakistan’s Climate and Energy Goals: Pakistan has committed to increasing its share of renewables. This policy, seen as punitive for distributed solar, could hinder progress toward these targets and slow down private-sector-driven decarbonization.
The Road to 2026: Compromise and the Path Forward
The transition to gross metering is not inevitable in its strictest form. The intense pushback has opened space for dialogue on hybrid or compensatory models:
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A Hybrid Model: A system that allows for a certain amount of self-consumption and netting before gross metering applies, or a net metering scheme with a reduced buy-back rate for exports.
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Protection for Existing Users: A firm guarantee that existing net metering contracts will be honored for a defined period (e.g., 10-15 years) is essential to maintain investor confidence in the energy sector.
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Tiered Feed-in Tariffs: Designing a FiT structure that offers better rates for smaller, truly distributed systems (like homes) and lower rates for larger commercial setups.
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Investing in Grid Modernization: Instead of penalizing solar, part of the solution must be accelerating grid investment to make it more flexible and capable of handling bidirectional power flows—a necessity for any modern energy system.
Conclusion: A Pivotal Moment for Energy Democracy
The shift from net to gross metering is more than a technical adjustment; it is a philosophical pivot in who benefits from the energy transition. Net metering empowered the prosumer—the consumer who is also a producer—democratizing energy generation. Gross metering recentralizes control with the DISCOs.
As Pakistan moves towards a potential 2026 implementation, the final policy must strike a delicate balance. It must ensure the financial viability of DISCOs to keep the grid running for everyone, while not extinguishing the public’s enthusiasm for clean, self-generated power. A fair, forward-looking solution would protect past investors, offer a reasonable if moderated incentive for new ones, and be part of a broader, transparent plan to reform the entire power sector. The solar genie is out of the bottle in Pakistan; the goal of policy in 2026 should be to harness its potential wisely, not to force it back in.