Federal cabinet defers approval of solar net metering policy for further review

ISLAMABAD: The federal cabinet has deferred the approval of the solar net metering policy, here on Wednesday.

According to the details, the cabinet meeting was held today under the chairmanship of Prime Minister Shehbaz Sharif. Later, the prime minister ordered the power division to review it.

As per the reports, several cabinet members, including the prime minister, expressed dissatisfaction with the proposed policy. As a result, the cabinet decided to return the policy to the power division for further review.

The federal government recently decided to amend the policy to reduce net metering rates on the pretext that it was putting pressure on grid users.

Now postponed, the federal government was going to change the buyback tariff from Rs. 27 per unit to Rs. 8-9 per unit for solar power users to ensure that all power consumers share the cost equally.

The prime minister also appreciated Pakistan’s successful staff-level agreement with the International Monetary Fund (IMF). He highlighted that the review of the first tranche of the $7 billion Extended Fund Facility has been completed, and the IMF has approved an additional $1.3 billion to support climate change initiatives.

The prime minister said that the IMF’s recognition of Pakistan’s economic stability, falling inflation – now at its lowest since 2015 – and governance reforms reflect confidence in the country’s economic direction. He credited Finance Minister Muhammad Aurangzeb and the economic team for their efforts in securing the agreements, which he said would help stabilize the economy through structural reforms, tax increases and private sector development.

The cabinet also approved a reduction in electricity prices using savings from reduced petroleum product prices. It also approved agreements between the Central Power Purchasing Agency (CPPA) and bagasse-fired power plants under revised terms.

Furthermore, the cabinet approved in principle the Whistleblower Protection and Vigilance Commission Act, 2025 with the aim of strengthening transparency and accountability. Following earlier reforms in 2023 and 2024, amendments to tax regulations within the Islamabad Capital Territory under the Resource Mobilization and Utilization Reform Program were also approved.

The cabinet further approved the Income Tax (Second Amendment) Bill 2025, restoring tax exemption for full-time teachers and researchers. It ratified the decisions of the Cabinet Committee on Privatization (March 11, 2025) and the Economic Coordination Committee (March 13 and 21, 2025). However, it deferred the approval of the Solar Net Metering Regulations, opting for wider stakeholder consultation before finalizing the recommendations.

Prime Minister Shehbaz Sharif stressed that Pakistan’s economic policies aim at long-term stability and sustainable growth, calling for national unity for prosperity.