Categories: Business

Govt proposes significant cut in solar net metering rates

Published by

Digital Desk

1 year ago

ISLAMABAD: The federal government has improvised a plan to purchase the surplus units generated by solar panel owners at significantly lower rates.

The government has shared the plan to revise the solar net metering policy with the International Monetary Fund (IMF) mission, which is currently in Pakistan for the first biannual review of the $7 billion programme.

As per details, the government currently purchases surplus units at Rs27 per unit, but it has now proposed to reduce this rate to approximately Rs10 per unit.

However, the IMF raised concerns over how the government would address the issue of solar panel owners who remain off-grid.

While the government has not yet provided a firm commitment, the IMF has flagged this issue, citing reports of a rapid increase in solar installations.

These reports suggest that the growing trend of solar adoption could escalate in the coming months and years, potentially creating challenges for the overall efficiency of the power sector.

The federal government has also informed the IMF about the need to rationalise power tariffs.

Currently, 86 independent power producers (IPPs) are operating across the country along with 18 government-owned plants. The government has terminated five inefficient power plants and successfully negotiated tariff reductions with 14 IPPs.

“The government is now renegotiating with the remaining IPPs. There is also a proposal to utilise the available fiscal space created by the reduced debt servicing burden, which amounts to Rs1.3 trillion. These measures will help the government lower the baseline tariff,” The News reported, citing a top official.

Digital Desk