Pakistan mulls halving rooftop solar buyback rate
“Islamabad is weighing a sharp cut to rooftop solar buyback rates to ease costs shifted onto other consumers.”
Key points
- Islamabad is weighing a sharp cut to rooftop solar buyback rates to ease costs shifted onto other consumers.
- Officials cite falling utility-scale tariffs, rising rooftop capacity and growing grid imbalances.
The government is considering cutting the rooftop solar net-metering buyback rate from about Rs22 per unit to roughly Rs11.30 amid concerns that payouts are burdening other grid users. Officials say rapid adoption of rooftop systems reduced grid sales by an estimated 3.2 billion units in FY2024, costing distribution companies around Rs101 billion and prompting tariff pressure on nonsolar consumers.
Projections from the Power Division warn that by FY2034 the shortfall could reach 18.8 billion units, with an impact of roughly Rs545 billion and a possible Rs5-6 per unit tariff increase for grid users. The prime minister has directed the Power Division and Nepra to review and verify the buyback tariff and its system-wide effects before reforms are finalised.
Authorities argue new utility-scale solar contracts are coming in below Rs10 per unit, making current buyback rates misaligned with market realities. Installed rooftop capacity is estimated near 6,000MW, which also creates operational challenges during low winter demand when daytime generation can exceed load.
A recalibrated buyback rate, officials contend, would better reflect costs, limit cross-subsidies, and curb upward pressure on tariffs while the government works on grid upgrades and fair cost recovery.
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