Prime Minister Shahbaz Sharif is said to have directed the National Electric Power Regulatory Authority (NEPRA) and Power Division to amend net metering regulations for rationalization of buyback rates
The decision was taken at a recent meeting on power sector presided over by Prime Minister Shahbaz, which was attended by top officials of concerned authorities.
Currently, substantial number of electricity consumers, especially rich segment, has opted for solarization of their houses due to load shedding and expensive electricity. Industry and commercial consumers are also shifting to solarization.
The current trend of net metering has jolted Power Division and Discos whose revenues is on the decline. The issue of massive solarization has also been discussed with the World Bank, Asian Development Bank (ADB) and now the IMF, who insists on full cost recovery of electricity from consumers.
The ADB in one of its recent aide-memoire stated that the Power Division expressed concerns regarding increasing net metering projects and their potential impact on Discos.
The ADB argued that although its proposed program will primarily focus on off-grid areas, the Mission will consult with the Power Division as the program preparation progresses.
the Power Division has placed its case of massive net metering before the Prime Minister Shahbaz along with its financial implication on revenues of Discos, which is already below target.
Power Division has revised buy back rates at Rs 11 or 12 per unit instead of currently applicable rate of Rs 21 or Rs 22 per unit.
The meeting decided that Power Division will move a summary after fine-tuning the following elements of rationalization:
(i) conversion of existing net metering regime to gross billing (separate rates for import and export of units;
(ii) creation of separate tariff category;
(iii) revision of buy back rates;
(iv) amendment of net metering regulations; and
(v) a dynamic formula to determine a reasonable pay-back period.
After discussion Prime Minister Shahbaz directed Power Division and NEPRA to approve amendments to net metering regulations. Power Division will take lead in this issue to finalize recommendations by May 31, 2024.
The Power Division, sources said, in its presentation to Prime Minister Shahbaz noted that solar panels have been imported to the tune of 6,000 MW during the first nine months of current fiscal year as Chinese PV panels are available at very cheap prices.
The Sindh Energy Department has requested ADB support in the following priority areas identified by the Sindh Government:
(i) mini grid solutions for rural underserved areas;
(ii) a new solarization initiative aimed at bringing electricity to the remotest and most underprivileged regions of Sindh;
(iii) solarization of reconstructed houses in flood-affected areas.
The ADB maintains that the nature of the Sindh Government’s request is aligned well with the objectives of the Second Access to Clean Energy Investment Program. The Mission and the Sindh Energy Department have agreed to pursue the program, including the development of sustainable business models.
