Solar power stakeholders urge govt to keep net metering incentive

LAHORE: Pakistan Solar Association (PSA) has made a resounding call to action, urging authorities and stakeholders to continue supporting net metering as a crucial pillar of the nation’s sustainable energy future.

Speaking at a media interaction, an association office bearer said on Tuesday that net metering has been recognised as a cornerstone in the transition to clean and affordable energy, aligning Pakistan with the global shift towards solar power adoption. The PSA noted that the government is contemplating a change in net metering policy, citing capacity charges of Independent Power Producers (IPPs) as the reason. The PSA has termed it as an erroneous and misleading approach, which will aggravate the electricity prices in the country.

Speaking at a press event, PSA Chairman Amir Chaudhry said, “The real issue lies in rampant energy theft, which results in a significant shortfall in the revenue collection of distribution companies (DISCOs), resulting in a continuous increase in circular debt. In February this year, Power Division Secretary Rashid Mehmood Langrial, in a briefing to the National Assembly Standing Committee said that electricity worth Rs380 billion is stolen every year in the country. In the same briefing, he said that the impact of Rs520 billion in stolen electricity is to be passed on to consumers in bills from the next fiscal [ie now the current fiscal year].”

PSA chairman has stressed that net metering is a sustainable energy solution that allows consumers to generate their own electricity through solar panels and feed excess power back into the grid. This process not only reduces electricity bills, but also contributes surplus energy to the national grid, creating a win-win situation for both consumers and the environment.

On the other hand, with electricity theft, in addition to the direct impact of ‘paying customers’ being forced to foot the bill for stolen electricity, the cost of financing the circular debt, caused by the recovery shortfall, is also passed on to the customers who actually pay their bills, in the form of FC surcharge and PHL surcharge.

“On top of this, our electricity bills are loaded with a plethora of taxes, such as electricity duty of 1.5 percent, GST of 18 percent, further tax and extra tax of 5 percent and an additional 3 percent, and even advance income taxes of an additional 5 percent to 12 percent of the total bill value,” he pointed out.

The result is an exorbitant cost of electricity that drives up electricity price for those who pay their bills and hence incentivizes more customers to avoid paying their bills, which makes the problem even worse. Rather than enhancing governance and vigilance to combat electricity theft or re-examining the impact of such massive taxation on electricity bills, the issue is being deflected by unjustly targeting solar energy.

PSA expressed concern over the spread of incorrect information and false propaganda by stakeholders from IPPs and DISCOs who want to draw away attention from the real problem and undermine the trust and progress of the solar industry. As per NEPRA ruling in the matter of Net Metering Regulations, dated February 10, 2023, NEPRA mentions that “the economic benefits of net metering in terms of displacement of costlier electricity, savings of foreign exchange and incurring minimal losses, cannot be ignored. Moreover, the quantum of net metering units, at present is very low, i.e. below 1 percent of the total energy purchased by DISCOs.” PSA chairman said, “The solar energy sector in Pakistan has enormous potential, not only to provide clean and sustainable energy but also to create job opportunities and boost economic growth. However, we are facing resistance from those who are reluctant to embrace this change.”

The PSA stated that net metering is a sustainable energy solution that allows consumers to generate their own electricity through solar panels and feed excess power back into the grid. This process not only reduces electricity bills, but also contributes surplus energy to the national grid, creating a win-win situation for both consumers and the environment. By promoting net metering, the PSA underscores its commitment to sustainable and eco-friendly energy practices. He added, “We believe in a future where Pakistan’s energy landscape is more sustainable and eco-friendly. To achieve this vision, it is imperative that the government stands by the solar energy sector and ensures a fair and conducive environment for all stakeholders."