Muhammad Arif
This refers to the news titled “Revised buyback rates for net metering: PM directs PD to verify new tariff in sync with NEPRA” publish by Business Recorder on 28th October 2025.
The government’s plan to slash rooftop solar buyback rates under the net-metering regime is more than just another tariff tweak — it is a policy blunder with far-reaching consequences. It exposes Pakistan’s chronic habit of reacting to fiscal stress rather than addressing structural flaws in its power sector. Citizens who invested in solar panels in good faith, encouraged by government policy and international commitments to renewable energy, are now being punished for doing the right thing.
Officials argue that solar consumers burden other users by avoiding fixed charges and contributing less to grid costs. But this argument wilfully ignores the real problem: the state’s failure to plan, manage, and rationalize its generation portfolio and costs relating thereto which is sole reasons of solariation at peoples own costs. Pakistan’s power crisis is not caused by rooftop solar systems but by governments own ill planned policies and their frequent revisions, misgovernance, corruption, maladministration and inefficies. The cost of this inefficiency is being shifted to the very citizens who attempted to ease it through solar power even without any financial support or incentives from the government – unlike many developed countries.
A sensible policy would not dismantle net metering but modernize it. Academically, economically, and technically, there are multiple smarter ways to manage solar integration without discouraging adoption. The first step is to make tariffs reflect real system behavior. Pakistan still defines “peak hours” as 6 pm to 10 pm or so, a relic from the pre-solar era. Today, the grid experiences stress during midday, when solar generation is abundant and conventional plants cannot ramp down fast enough. Revising peak and off-peak hours — shifting peak pricing to evening and incentivizing daytime consumption by introducing Sweet hours category — would allow the system to absorb surplus solar generation instead of penalizing it.
Such time-of-day reforms are neither novel nor experimental. India, Australia, and several European nations have already demonstrated how dynamic pricing can flatten load curves, protect grid stability, and sustain renewable growth. NEPRA has the regulatory authority to adjust the Time-of-Use framework; what is missing is the sincerity, honesty, professiohalism and courge to do so.
Second, instead of discouraging solar households, Pakistan should incentivize industries and businesses to consume electricity during daylight hours. Offering a moderate daytime tariff (sweet hours) discount to industrial users would shift load to the hours when solar power is abundant. The economic logic is straightforward: higher daytime utilization improves system efficiency, lowers per-unit cost, and supports industrial competitiveness. Every extra unit sold during solar hours replaces expensive, underutilized capacity that the government must otherwise pay for regardless of consumption. With the increase in commercial and industry consumption of electricity, GDP growth takes place and hence the economy.
Third, buyback pricing could be cost-reflective but fair. Instead of arbitrary cuts, the government could compensate solar producers at the true avoided cost — the price the utility would have paid for the next most expensive unit of grid power, minus transmission and wheeling charges. This would ensure equity between prosumers and grid consumers without destroying incentives for distributed generation. However, such precision requires modern infrastructure. This requires transformation to the comprehensive technology governance apprach through value chain for data accuracy, instant availability and precise system load management etc.
The deeper economic challenge lies in Pakistan’s distorted generation mix. The country now has over 44,000 megawatts of installed capacity but a peak demand barely two-thirds of that. Yet circular debt continues to balloon because utilities are forced to pay billions in capacity charges to plants that remain idle. The rational solution is not to suppress solar adoption but to rationalize generation contracts, renegotiate excessive capacity payments, and declare a moratorium on new imported-fuel-based projects. Every new thermal plant locks Pakistan deeper into foreign-exchange exposure and long-term liabilities.
Energy reform, however, is not merely a technical exercise; it is a test of governance credibility. The retroactive alteration of net-metering contracts would violate the principle of legitimate expectation — the foundation of regulatory trust. Investors and consumers must be confident that a government policy will not be reversed at whim. Without this certainty, even future renewable programs will lose credibility.
Equally troubling is the reported plan to craft a “communication narrative” to justify these reforms. Managing public perception cannot substitute for genuine consultation. If the government believes in evidence-based decision-making, it should publish a transparent cost-benefit analysis: how much does rooftop solar truly cost the system, how much fossil fuel does it displace, and how do these savings compare to the subsidies embedded in conventional generation? Only open data can foster informed consent.
The broader vision must look beyond net metering. The world is moving toward smart, decentralized grids that treat consumers as active participants — “prosumers” who both produce and manage energy. With the right digital infrastructure, rooftop solar owners can provide ancillary services such as voltage support, reactive power compensation, and localized balancing. Pakistan should be developing a “net-smart” model, not dismantling the modest progress already achieved.
Such transformation also aligns with Pakistan’s net-zero emissions pledge for 2050. Rooftop solar may seem small in the national energy balance, but it is the most visible expression of citizen-driven climate responsibility. Discouraging it sends the wrong signal to international financiers, multilateral donors, and domestic investors alike. It reinforces the perception that Pakistan remains trapped in reactive short-termism — managing crises rather than governing futures.
The choice before policymakers is clear. They can continue the cycle of blaming consumers for institutional inefficiency, or they can use this moment to modernize tariff structures, reform dispatch priorities, and unlock the economic potential of distributed renewables. They can keep paying for idle plants, or they can empower citizens to generate affordable, clean electricity.
Sustainable energy governance is not about punishing participation; it is about aligning incentives with the public interest. Reform should begin where the waste lies — in over-contracted capacity, fuel import addiction, and bureaucratic inertia — not on rooftops where citizens are generating light, both literally and figuratively.
Rooftop solar users are not freeloaders. They are early adopters of the very energy transition Pakistan claims to support. To penalize them is to punish foresight. A country that hopes to “light up tomorrow” cannot afford to dim the sun today.(Opinions expressed in this article are the author’s own and do not necessarily reflect WNAM’s editorial policy)
The author is former Member, OGRA, Managing Partner at Arif & Associates, a boutique petroleum and business law consultancy, a thought leader in energy, governance, regulatory, economic policy, and consumers rights advocate; [email protected] | 0333 5191381
