Federal government changes billing procedures for solar consumers

ISLAMABAD: The federal government has changed the billing method for consumers generating electricity from solar systems, contrary to the agreement.

According to the details, electricity distribution companies have started counting excess electricity as “zero units”. Along with this move, “export MDI check” has also been implemented on the connections of consumers who violate the agreement.

Under the new system, the relief given on electricity generated from additional panels has been completely abolished.

According to the government decision, although the additional electricity will be included in the system, no financial benefit or relief will be provided on it under the net metering policy.

Moreover, relief on additional generation based on export MDI reading has also been abolished, while in the case of installing panels more than the approved generation license, no benefit will be given on additional export units.

Meanwhile, Solar panel prices in Pakistan have the possibility of rising due to a new tax imposition by the International Monetary Fund in the coming budget.

The International Monetary Fund has asked the government of Pakistan to impose a new tax of 18% General Sales Tax on solar systems by removing tax exemptions. If approved, solar panel prices in Pakistan will rise for those who are adopting solar power due to high electricity bills.

This is part of a larger strategy for the government to increase tax revenues to over Rs15.6 trillion. The International Monetary Fund has also asked the government of Pakistan to impose a new tax of 18% General Sales Tax on fuel, such as petrol, which is currently being sold at zero percent. This could cause the price of petrol to rise, affecting food inflation.

The International Monetary Fund has also asked the government of Pakistan to remove tax exemptions on newly built houses. The government has also been asked to increase taxes on small traders.

At present, the cost of solar panels depends on the brand and capacity. Low-capacity solar panels can be purchased for Rs. 9,500, while high-end ones can cost up to Rs. 23,700. These costs may also rise with the imposition of the new tax.

Pakistan is facing difficulties in meeting its tax targets because of the reduction in imports, high oil prices, and low business activity.

If these proposals come into effect, people might soon experience high fuel costs, high solar panel costs, and a high cost of living.