Power Firms Seek Fixed Charges on Solar Net Metering Users 2025
Pakistan’s power distribution companies have proposed new fixed charges for solar consumers using net metering systems, triggering a heated debate over the future of household and industrial solar energy.
The proposal, backed by the Ministry of Energy, is aimed at compensating the losses faced by electricity providers as more people switch from the national grid to rooftop solar systems.
This move, however, has raised concerns among solar users and energy experts, who see it as an attempt to discourage clean and independent energy adoption in the country.
Background – Why Power Companies Are Targeting Solar Consumers
The demand for solar net metering in Pakistan has surged sharply in the past three years due to high electricity prices and frequent power outages.
Consumers across major cities — including Lahore, Karachi, Faisalabad, and Islamabad — have installed on-grid solar systems that allow them to sell excess power back to the grid.
While this system has helped reduce household electricity bills and promote renewable energy, it has also reduced the revenue of distribution companies (Discos), which are already burdened with circular debt and operational losses.
To offset this impact, power firms such as Multan Electric Power Company (Mepco) and Gujranwala Electric Power Company (Gepco) are now lobbying the National Electric Power Regulatory Authority (Nepra) for permission to introduce fixed service charges on all solar net metering users.
The Proposal Presented to Nepra
At a public hearing on Tuesday, Mepco and Gepco presented their case before Nepra officials.
According to their statement, the rapid growth of solar net metering is “eroding company revenues and destabilizing the financial balance of the national grid.”
They proposed that all solar consumers pay a fixed monthly charge — regardless of how much electricity they use or export — to help cover the transmission and distribution (T&D) costs incurred by power companies.
The Ministry of Energy has supported the proposal, stating that the policy is necessary to ensure grid stability and maintain fair cost distribution among all consumers.
Government’s Perspective – Balancing Losses and Energy Security
Government officials argue that as more people adopt solar panels, grid-connected consumers are forced to bear a larger share of capacity charges, which are fixed payments made to power producers whether or not electricity is used.
The Power Division believes that the trend of switching to solar threatens the financial sustainability of the entire electricity system.
To address this, the government has been exploring different measures, including:
- Introducing fixed capacity fees for all consumers.
- Adjusting buy-back tariffs for solar power sold to the grid.
- Offering discounted electricity rates to encourage grid consumption.
A previous plan to reduce the solar buy-back rate from Rs. 21 per unit to Rs. 10 per unit was withdrawn earlier this year after public backlash and direct intervention by Prime Minister Shehbaz Sharif.
Solar Users Fear Extra Financial Burden
Solar consumers, however, fear that fixed charges could make renewable energy less attractive and financially unviable.
Household users argue that they have already made heavy upfront investments in solar panels and inverters to reduce their dependency on the national grid.
“We switched to solar because the bills were unbearable. Now they want to punish us for generating our own clean power,” said one consumer from Lahore.
Experts warn that such charges could slow down Pakistan’s solar revolution at a time when the country desperately needs energy diversification to cut fuel imports and reduce emissions.
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Nepra’s Role and Response
The National Electric Power Regulatory Authority (Nepra) has not yet given its final decision on the proposal.
However, the regulator raised serious concerns during the public hearing about the transparency and fairness of the proposal.
Nepra officials questioned whether such fixed charges would discourage investment in solar technology and contradict Pakistan’s renewable-energy targets under the National Climate Policy 2030.
The regulator also criticized Gepco for the unauthorized installation of smart meters and reminded all companies that consumer-friendly reforms must align with the Renewable Energy Policy 2019, which aims for 30 percent clean energy in Pakistan’s power mix by 2030.
Mepco’s Financial Position
During the hearing, Mepco reported that it had achieved 100 percent billing recovery for fiscal year 2024-25, though a portion of payments remains pending and is collected in later months.
The company’s leadership argued that despite improved recovery, infrastructure costs remain high and revenues are shrinking because thousands of users have installed solar panels.
They claimed that solar adoption has caused a decline in grid demand, which affects their ability to meet financial commitments to power generation companies (Gencos).
Gepco’s Argument – Need for Policy Support
Gepco representatives shared similar concerns, noting that solar power generation has drastically reduced their unit sales and revenue collection in urban centers like Gujranwala and Sialkot.
“If the trend continues unchecked, Discos will not be able to maintain their networks or invest in grid modernization,” said a Gepco spokesperson.
The company maintained that fixed service fees would help sustain the distribution network while keeping essential services operational.
Public Backlash and Consumer Concerns
The proposal to impose additional fees has been widely criticized by the public.
Energy activists, environmentalists, and civil-society groups have condemned the move as anti-renewable and anti-consumer.
Social-media campaigns under hashtags like #SaveSolarPakistan and #NoFixedCharges have begun trending nationwide, with users demanding that the government protect net metering policies instead of penalizing clean-energy users.
Comparison with International Models
In countries like Germany, the United States, and Australia, power utilities have introduced minimal grid-maintenance charges for solar users.
However, these are typically offset by tax incentives and feed-in tariffs, ensuring that renewable-energy adoption remains financially viable.
In contrast, experts fear that Pakistan’s proposed model lacks such compensatory incentives, which could lead to a slowdown in solar investment and reduced trust in the government’s clean-energy commitments.
Power Division’s Justification
The Power Division defended the proposal by saying that Pakistan’s electricity demand has declined, while installed generation capacity continues to grow.
As a result, the government is forced to pay billions of rupees in capacity payments to idle power plants every month — a burden ultimately passed on to grid-connected consumers.
Officials claim that fixed charges on solar users would ensure equitable cost sharing, preventing non-solar consumers from subsidizing those who have shifted off the grid.
Nepra’s Multi-Year Tariff Discussions
The hearings also included deliberations on multi-year tariff petitions filed by both Mepco and Gepco for 2025-26 to 2029-30.
These petitions outline projected revenue requirements, operational costs, and investment plans for each company.
Nepra directed both firms to submit detailed analyses explaining:
- How fixed charges would affect consumer affordability;
- Whether the proposal aligns with federal renewable-energy goals; and
- How power companies plan to improve efficiency and transparency in billing.
Government’s Incremental Power Scheme
In parallel, the government has launched a three-year incentive plan to encourage higher electricity usage by offering reduced incremental rates for consumers who increase their monthly consumption.
This is designed to boost grid demand, minimize losses, and discourage mass migration to solar energy.
Under this plan:
- Households consuming more units than the previous year receive discounted tariffs.
- Industrial consumers benefit from lower incremental rates on additional usage.
Officials hope the policy will help stabilize national-grid demand, though analysts believe it may not offset the mass appeal of solar independence.
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Energy Experts Warn of Long-Term Consequences
Energy economists warn that imposing fixed charges could have far-reaching economic consequences.
They argue that discouraging solar adoption would:
- Increase dependence on imported fuel,
- Worsen environmental pollution, and
- Undermine Pakistan’s climate-change commitments under the Paris Agreement.
“Instead of taxing solar users, the government should invest in smart grids and battery storage to integrate distributed power effectively,” said an energy expert from LUMS Energy Institute.
Conclusion – A Crossroads for Pakistan’s Energy Future About Fixed Charges on Solar Net Metering Users 2025:
The debate over fixed charges on solar consumers highlights the growing tension between financial recovery and clean-energy transition in Pakistan’s power sector.
While power firms seek financial stability, consumers fear losing access to affordable renewable energy — a step backward from Pakistan’s sustainability goals.
Nepra’s final decision will determine whether the government prioritizes revenue protection or green-energy expansion.
Whatever the outcome, it will shape Pakistan’s energy landscape and its commitment to solar independence for years to come.
Frequently Asked Questions (FAQs)
1. What are fixed charges on solar consumers in Pakistan?
Fixed charges are proposed monthly fees that solar net metering users may have to pay to cover the transmission and distribution costs of electricity. Power companies like Mepco and Gepco have requested Nepra to approve these charges for all rooftop solar users.
2. Why are Pakistani power companies targeting solar users with new charges?
Electricity companies argue that the rapid increase in solar installations has reduced their revenue and grid demand. As more consumers switch to solar, fewer people use grid electricity, which affects the companies’ ability to pay capacity charges to power producers.
3. How will the fixed charges affect solar net metering users?
If approved, these charges could increase monthly costs for households and industries using solar panels. Many fear it will make solar energy less affordable, slowing down Pakistan’s clean energy transition and discouraging future solar investments.
4. What is Nepra’s role in the solar fixed charges proposal?
The National Electric Power Regulatory Authority (Nepra) is reviewing the proposal and has yet to issue a final verdict. During the hearing, Nepra raised questions about fairness, transparency, and whether this move aligns with Pakistan’s Renewable Energy Policy 2019.
5. What are experts saying about Pakistan’s solar fixed charge plan?
Energy experts warn that such charges could harm Pakistan’s renewable energy goals and solar independence. They recommend that instead of taxing solar users, the government should focus on smart grids, storage solutions, and solar-friendly incentives to promote sustainable growth.
