Pakistan Officially Ends Net Metering — New Net Billing Regime Cuts Rooftop Solar Payback by Years

Pakistan has formally retired its decade-old net metering framework for rooftop solar customers and replaced it with a net billing regime that pays exported units at a regulated buyback rate rather than offsetting them one-for-one against imported electricity. For the country's roughly 280,000 net-metered households and small businesses already on the system, the change does not apply retrospectively — but every new applicant from the cut-off date onward is enrolled under the new terms.

Under the old framework, a unit exported to the grid was credited against a unit consumed at the same retail tariff — effectively zeroing the bill of a well-sized 5–10 kW system. Net billing breaks that symmetry: exported units are bought back at a lower buyback rate notified by NEPRA, while imported units are billed at the full applicable consumer tariff including fuel adjustment and GST. The payback math changes accordingly.

Why the regulator moved

The Power Division and NEPRA have argued for two years that the original net metering settlement was cross-subsidised — that the DISCOs were buying back power at retail rates which had embedded transmission, distribution, capacity, and policy charges that net-metering customers did not actually incur. As rooftop installations surged past 4 GW of installed solar capacity, the unrecovered cost shifted onto non-solar bill payers, widening the circular debt overhang.

The numbers driving the policy shift

• Cross-subsidy attributable to net metering was estimated at Rs 90–100 billion per year by the Power Division's working group.
• Rooftop solar additions in FY 2024-25 and 2025-26 cumulatively delivered the bulk of new generation capacity coming online — outpacing utility-scale projects.
• Buyback rate under the new regime is notified by NEPRA and reviewed periodically; the headline rate at launch sits well below the residential protected slab.

What changes for a typical 5 kW household

A 5 kW Karachi or Lahore rooftop system typically generates around 700 kWh per month. Under the old net metering scheme, a household consuming roughly the same monthly units could see its bill fall to near zero. Under net billing, that same household will see a residual bill — because imported units are still billed at retail rates while exported units earn the lower buyback. Payback periods for new installations extend from the previous 3–4 year window to closer to 6–7 years on typical assumptions.

What stays unchanged

• Households with existing approved net metering agreements continue under their original terms for the contracted period.
• Self-consumption — using your solar generation directly inside the home — is unaffected and still effectively free at the prevailing slab rate.
• Hybrid systems with battery storage tilt sharply in favour now, because storing exports for evening self-use is worth more than selling them back to the grid.