KARACHI – Pakistan’s government finds itself in a delicate position, aiming to promote renewable energy, particularly solar power, while grappling with constrained grid capacity and economic challenges. The government’s recent consideration to reduce buyback rates for net-metering electricity has sparked debates regarding the balance between incentivizing solar installations and managing grid constraints.
The introduction of net-metering was a significant move to encourage households and businesses to generate their electricity and sell excess power back to the grid. However, the proposed rate cuts have raised concerns among solar users who viewed solar power as a cost-saving measure.
Omar Malik, CEO of Shams Power, noted that while the proposed changes could impact buyback rates for excess electricity, net-metering’s core concept remains intact, allowing consumers to offset their consumption with solar generation.
The government’s dilemma stems from its obligation to manage idle capacity charges amid economic slowdowns and high inflation. Additionally, concerns about subsidizing affluent individuals at the expense of low-income groups have prompted discussions about revising net-metering policies.
Experts emphasize the need for a nuanced approach. Dr. Khalid Waleed, an energy economist, highlighted the long-term benefits of rooftop solar despite potential investment challenges with lower buyback rates. He stressed the importance of raising consumer awareness about utilizing surplus solar energy for various purposes, including electric cooking and charging electric vehicles.
The Ministry of Energy’s Power Division acknowledged the need to review net-metering policies to address concerns about subsidies and burden sharing among consumers. The government aims to strike a balance that promotes solar adoption while ensuring equitable distribution of benefits.
Pakistan’s energy sector is undergoing a transformation towards a more sustainable future, with plans to increase the share of renewable energy sources significantly. However, challenges such as circular debt, grid constraints, and economic growth must be addressed holistically to achieve long-term energy sustainability.
As Pakistan navigates these challenges, a balanced approach that encourages renewable energy adoption, promotes economic growth, and addresses grid reliability will be crucial for a sustainable energy transition.
