Proposing revision to net-metering regime was necessary, webinar told

The federal government was left with no choice but to propose a revision to the existing net-metering regime, otherwise an unchecked manifold increase in the capacity of on-grid rooftop solar power systems in the coming years would have devastating effects on the national grid, mainly due to the constrained service capacity of the distribution companies.

This was the consensus opinion expressed by energy experts at a recent webinar titled ‘Net-metering debate: facts vs claims’, which was organised by Energy Update in partnership with the Pakistan Solar Association and Renewable Energy Association Pakistan.

The speakers said that proposing amendments to the net-metering regime is necessary for the financial viability of the regime introduced a couple of years ago to purchase clean power from consumers having on-grid rooftop solar systems, as the government’s latest move would not discourage expansion of renewable energy in Pakistan.

National Transmission & Despatch Company Chairman Dr Fiaz Chaudhry said that the unchecked increase in on-grid rooftop solar systems has been creating an unbearable financial burden on the government, having already much-constrained fiscal capacity to manage the national electricity system.

Dr Chaudhry, who also serves as the director of the Lahore University of Management Sciences’ Energy Institute opined that the revision to the net-metering conditions mainly concerns affluent consumers using over 300 units of electricity in a month and who make up a small percentage of the customer base in Pakistan’s power system.

He said that Rs18 to Rs20 per unit continuous capacity payments to the net-metering consumers are simply unbearable for the government, and utterly lack any technical justification.

Undue capacity payments have been constantly inflating the monthly bills of the vast majority of power consumers in the country having no rooftop solar systems, he added. He likened the unjust inflated payments to affluent net-metering consumers to evolving a “smart theft” system in the country under the government’s patronage.

He made the assurance that slashing the net-metering buy-back rates is aimed at overcoming an obvious financial disparity in the electricity system of Pakistan, as the government’s latest move should not be viewed as an anti-solar energy step.

Renewable energy expert Syed Faizan Ali Shah said the net-metering policy was originally conceived in 2015, when there was a severe dearth of clean power production and a widening shortfall of grid-supplied electricity in Pakistan.

Shah said that the proposed revision to the net-metering policy has become inevitable, as has been done in many other countries, given the phenomenal expansion of renewable and base-load power-generation capacity of the country.

He said that unchecked installation of rooftop systems is responsible for the burnout of the transformers, and other expensive equipment and installations of the loss-making distribution companies.

He also said that given the current pace of increase in net-metering customers in the country, the cumulative rooftop solar power-generation capacity would have increased from four gigawatts to eight gigawatts in a few years, had the government not introduced the much-needed corrective measures.

He stressed that reforms in net-metering systems have become necessary to ensure the financial and technical sustainability of the national grid. Had the government allowed the rapid expansion of on-grid solar systems, the operational electricity demand would have decreased to such an alarming level that it could not ensure the technical sustainability of the national grid, he said.

Power Planning & Monitoring Company Managing Director Abid Latif Lodhi said that reforms in the net-metering regime concern over 240,000 power consumers, which make up 42 per cent of the total 500,000 domestic customers using three-phase electric supply.

Lodhi said that any amendments to the net-metering policy have nothing to do with the vast majority of low-income power consumers who used single-phase electricity.

Senior financial and insurance expert Moin M Fudda said that the proposed revised per-unit net-metering rate would decrease to Rs8 after applying the general sales tax, which would further discourage prospective consumers from purchasing rooftop solar systems.

Fudda said that the proposed new net-metering policy would not favour power consumers from middle-income groups who borrowed loans or spent their hard-earned money installing solar systems to slash their inflated monthly electricity bills.