NEPRA Prosumer Regulations 2025: Transition from Net to Gross Metering
The National Electric Power Regulatory Authority (NEPRA) has proposed a major shift in Pakistan’s solar policy, aiming to replace the existing net metering system with a gross metering framework for new rooftop solar consumers. This change is designed to address the growing financial and operational burden that net metering places on non-solar grid users.
Under the Nepra Prosumer Regulations (NPR) draft, future domestic solar consumers will trade electricity with their respective distribution companies (Discos) using gross metering rather than net metering. The draft, spanning 18 pages, has been uploaded to NEPRA’s official website, and stakeholders have 30 days to submit feedback, with a public hearing possible before final approval.
Difference Between Net Metering and Gross Metering
Net Metering
Under the current net metering system, electricity exported to the grid offsets electricity imported, reducing a consumer’s monthly power bill. Surplus power is compensated at the buyback rate of Rs. 22 per unit, and valid contracts for existing consumers last seven years.
Gross Metering
Gross metering will function differently:
- All electricity exported to the grid will be compensated at a fixed feed-in tariff, proposed at Rs. 11.30 per unit
- Electricity drawn from the grid is billed separately at prevailing retail rates
- Contracts under gross metering will be valid for five years, with the possibility of renewal upon mutual agreement
This shift aims to reduce the financial burden on non-solar consumers while allowing solar users fair compensation for their generated electricity.
Why NEPRA Is Making the Change
The decision comes after NEPRA and the Power Division observed that the net metering regime imposes an estimated Rs. 2 per unit financial burden on non-solar grid users. Key reasons for the transition include:
- Revenue Loss for Discos:
- During FY2024, rooftop solar expansion led to a decline of 3.2 billion units in grid electricity sales
- Distribution companies suffered revenue losses of nearly Rs. 101 billion, contributing to an average tariff increase of Rs. 0.9 per unit
- Projected Future Losses:
- By FY2034, lost grid sales could rise to 18.8 billion units, with a financial impact of Rs. 545 billion
- Potential tariff increase for grid-connected consumers could reach Rs. 5-6 per unit
- High Buyback Rate vs. Market Prices:
- The current buyback rate of Rs. 22 per unit is unsustainable
- New utility-scale solar projects are being contracted at rates below Rs. 10 per unit, making the existing system costly
- Grid Stability Concerns:
- Excessive solar generation during low-demand periods (e.g., winter) risks grid instability
- Instances of misuse, such as consumers exporting more than sanctioned loads, exacerbate the problem
- Global Lessons:
- Sri Lanka experienced a nationwide blackout after a sudden surge in solar generation
- NEPRA aims to prevent similar disruptions in Pakistan
Proposed Tariff and Contract Terms
- Feed-in Tariff: Rs. 11.30 per unit for all exported electricity
- Contract Duration: 5 years, with possible extension
- Payment: Separate billing for electricity drawn from the grid at retail rates
- Extension: Renewable on a mutually agreed basis between the consumer and Disco
Existing net metering consumers will continue to benefit from the Rs. 22 per unit buyback rate until the end of their seven-year contracts, ensuring no disruption for current users.
Smart Meters and Grid Management
To support the gross metering system and ensure fair usage, Discos are installing smart meters capable of:
- Real-time monitoring of electricity generation and exports
- Controlling electricity exports to prevent misuse
- Enhancing grid stability during peak solar generation hours
These meters will play a critical role in maintaining a balance between solar and grid electricity, preventing technical issues, and ensuring accurate billing.
Impacts on Consumers
For New Solar Users:
- Lower compensation for exported electricity compared to the net metering buyback rate
- Clear separation between electricity drawn and exported
- Contracts limited to 5 years, encouraging long-term negotiation
For Existing Solar Users:
- Continued benefit of the Rs. 22 per unit buyback rate until contract expiry
- No immediate changes to current billing or agreements
For Grid-Connected Consumers:
- Reduction in hidden costs previously imposed by net metering
- Lower tariff increases in the long term due to reduced losses for Discos
Broader Implications
The shift to gross metering has broader economic and environmental implications:
- Financial Sustainability: Helps maintain revenue streams for distribution companies
- Tariff Stability: Limits excessive tariff hikes for non-solar consumers
- Grid Security: Reduces risks of blackouts or grid overloads
- Market Efficiency: Aligns solar buyback tariffs with utility-scale solar prices
Energy planners argue that the gross metering model ensures a fair and balanced energy ecosystem, benefiting both solar prosumers and traditional consumers.
NEPRA’s Stakeholder Consultation
NEPRA has invited feedback from consumers, industry stakeholders, and experts within 30 days of the draft publication. The regulator may also conduct a public hearing before finalizing the Prosumer Regulations.
This participatory approach ensures:
- Stakeholder concerns are addressed
- Regulations are balanced and implementable
- Solar energy adoption continues sustainably
Conclusion
NEPRA’s proposed gross metering framework represents a strategic shift in Pakistan’s renewable energy policy. By replacing net metering for new rooftop solar users, the regulator aims to:
- Limit financial burden on non-solar consumers
- Protect grid stability
- Encourage sustainable growth of solar energy
- Align tariffs with market realities
While existing net metering consumers retain their benefits, new solar installations will operate under a structured, fair, and financially viable system, promoting long-term sustainability for Pakistan’s electricity sector.
The successful implementation of gross metering, combined with smart meters and regulatory oversight, can ensure that Pakistan balances renewable energy adoption with grid stability and financial sustainability.
FAQs About NEPRA’s New Gross Metering for Solar Users
1. What is NEPRA’s new gross metering policy?
NEPRA proposes replacing the net metering system with gross metering for new rooftop solar users. Under this system, electricity exported to the grid is compensated at a fixed feed-in tariff, while electricity drawn from the grid is billed separately.
2. Who will be affected by the change?
New solar consumers installing rooftop systems after the policy is implemented will use gross metering.
Existing net metering consumers with valid seven-year contracts will continue under the current system at Rs. 22 per unit until contract expiry.
3. What is the proposed feed-in tariff under gross metering?
The draft regulations propose a feed-in tariff of Rs. 11.30 per unit for electricity exported to the grid under gross metering.
4. How long will gross metering contracts last?
Contracts will be valid for five years, with the possibility of extension based on mutual agreement between the consumer and distribution company.
5. Why is NEPRA making this change?
The net metering system has caused:
Revenue losses for distribution companies
Hidden costs on non-solar grid consumers
Potential risks to grid stability
Gross metering aims to reduce these burdens while still encouraging solar adoption.
