Government mulls lowering solar net Metering Tariff in Pakistan

The federal government on Tuesday told the Senate Standing Committee on Electricity that it may reduce the net metering tariff for rooftop solar power units, following more than a year of unsuccessful attempts in this regard.

The meeting chaired by Senator Azam Nazir Tarar focused on various energy-related issues, including an investigation into alleged malpractices in the allocation of four contracts for a 765-kilovolt transmission line from the Dasu Hydropower Project to Islamabad, which was funded by a foreign entity.

This decision followed an examination into whether the power division had granted preferential treatment to its subordinate company. Government officials also claimed at the meeting that the circular debt has been frozen at Rs. 2.31 trillion.

READ MORE: Pakistanis will receive uninterrupted power supply during Ramadan

During the session, Power Secretary Asad Rehman Geelani said that the recent fuel cost adjustment has led to higher-than-estimated tariffs due to higher insurance costs and tanker charges from the Middle East.

Power Secretary admitted to excess fuel costs due to Middle East issues, insurance premiums, and tanker fees, but claimed it was not their responsibility.

He stated that the petroleum price reached consumers with a two-month lag due to the “automaticity factor” negotiated with the International Monetary Fund (IMF), which constrained the government’s actions.

Caretaker Power Minister Muhammad Ali and Secretary Geelani argued for lower tariffs and said rich urban homeowners could afford higher rates than small consumers. He stressed the need for equity, suggesting that the current tariff unfairly burdens poor consumers.

The secretary briefly mentioned that revolving credit, totaling Rs2.310 trillion, was successfully managed by December 21, 2023, meeting the targets set by the IMF. He attributed this to effective management of the power sector, tariff adjustments to cover losses, and an anti-theft campaign that generated revenue of Rs85.7 billion has been recovered since August 2023.