Solar photovoltaic (PV) users in Pakistan will face more taxes under proposed reforms

Amid a massive shift towards photovoltaics, Pakistan’s Energy Division is working on amendments to net metering rules to balance the benefits to solar energy users with the financial impact on other electricity consumers.

The proposed changes include sending net metered energy to the national pool and introducing capacity charges for users.

The first change is a 50% drop in net metering rates, which will be imposed to extend the payback period for solar energy investments from three to seven years. The current share of 2,000 MW of net metering on the National Grid has seen an increase in solar energy users from 55,000 to 120,000 in the last year.

The shift by large consumers burdened grid consumers, with projections pointing to a possible increase of Rs 350 billion next year if the tariff remains unchanged.

The Energy Division aims to alleviate this tension by adjusting the net metering rate. The amendments also include integrating net metering energy into the national fund and imposing capacity charges on users to ensure fair contributions to infrastructure costs, generally shared by all consumers.