Net-metering, tax controversies cloud future of solarization in Pakistan despite government clarification

In this file photo, taken on March 10, 2012, a Pakistani company employee arranges a solar panel during a marketing demonstration in a park in Islamabad. (AFP/File)
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Updated 20 May 2024
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Net-metering, tax controversies cloud future of solarization in Pakistan despite government clarification

  • Government says it won’t end net-metering policy for solar power producers, promises to honor commitments made by companies
  • Pakistan’s energy woes stem from high capacity charges consumers pay due to long-term government contracts with power producers

KARACHI: Controversies about net-metering and imposition of a new tax have cast a cloud over Pakistan’s transition to solar energy despite the government’s ambitious plans, stakeholders said on Monday, adding the situation has left them in a state of uncertainty.

Pakistan approved the net-metering policy in 2017 that allows consumers to sell excess electricity produced by their solar systems to power distribution companies, resulting in significant savings in their monthly bills.

However, the energy ministry stirred a controversy last month by declaring that net-metering was promoting “unhealthy investments” in installation of solar power by affluent domestic and industrial consumers, hinting at cutting the buyback rates.

“Before this [controversy], people were shifting to solar [energy] in such a way that we thought that 100 percent Pakistan embraced solar energy,” Zulfiqar Ali, an importer, supplier and installer of solar panels, told Arab News on Monday.

“Now, we’re witnessing a stark contrast, a slowdown in inquiries, stagnation in projects, all amidst a talk of governmental reconsideration of solar energy policies.”

Ali said the net-metering issue had a lot of effect on the market as the purchasing groups suddenly went silent and the deals that were going on became stagnant. “The planned projects have gone into an idle position, people are neither saying yes nor no,” he added.

Recent reports published by local media about new taxes and an end to net-metering policy further compounded the situation and prompted Energy Minister Awais Leghari to explain the government’s position on the matter. 

“We completely reject these stories. The agreements our companies have made with net-metering users, whether they are for five years, six years, or seven years, will not be altered in any way and the government will not damage its reputation, nor will it cause any inconvenience to those investors,” Leghari said at a press conference in Lahore on Sunday.

He said the government was fully committed to renewable energy and solarization and was in favor of continuing the net-metering policy. 

“If, after studying it over the next few months, there is a need to revise it, it will be done very responsibly and in consultation with stakeholders,” Leghari said.

“After the approval of the entire government, if necessary, we will rationalize this. At this moment, we are committed to fulfilling all the contracts we have signed with various people. We will uphold the integrity of the entire government and move forward together.”

But despite the government’s assurances, an atmosphere of uncertainty prevails in the South Asian country with regard to solarization.

“I wanted to install solar panels at my rooftop to mitigate the impact of high electricity bills but now I am unable to take a decision because of the government’s intended moves of either taxing panels or curtailing net-metering benefits,” said Khalid Abbas, a resident of Karachi, adding that he would wait for clarity on the subject.

Solar panel suppliers said people, who were buying solar panels by selling their cars or jewelry, had stopped purchasing the equipment. 

“Residential consumers who wanted to install 5-20KW panels have stopped and are waiting for clarity,” Zulfiqar said.

Pakistan’s energy woes stem from the substantially high electricity bills, mainly due to the capacity charges that are as high as 65 percent and the nation is bound to pay these to power producers, even though their plants stand idle. 

The power purchase price (PPP), or the average per unit price based on the generation cost, is Rs20.60, which includes Rs14.09 capacity charges, and Rs6.21 fuel and variable charges, according to Pakistan’s reference tariff for fiscal year 2023-2024.

Pakistani energy experts believe the volume with which solar energy is increasing is still “insignificant” and does not even make 1 percent of the total power generation in the country.

“But the way it is going on in Pakistan, perhaps a significant portion of our net-metering will be done from it,” Dr. Khalid Waleed, an expert on energy economics, told Arab News. “Around 2,000MWs will be coming from net-metering. So, it should not be discouraged at all.”

When consumers switch to solar power, Waleed said, capacity charges are borne by other consumers that ultimately increases their power burden. 

Experts say the country won’t be able to get rid of the capacity charges before 2050 due to long-term contracts made with power producers.


Supreme Court resumes hearing denial of reserved seats petitions filed by ex-PM Khan-backed party

Updated 42 sec ago
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Supreme Court resumes hearing denial of reserved seats petitions filed by ex-PM Khan-backed party

  • Pakistan’s election regulator denied these seats for women and minorities to Sunni Ittehad Council after Feb. polls
  • The outcome of the case may impact National Assembly’s composition, influencing how the government functions

ISLAMABAD: Pakistan’s top court is scheduled to take up a significant political case today, Monday, involving petitions that challenge the denial of reserved seats in parliament to the Sunni Ittehad Council (SIC), a party backed by the country’s jailed former prime minister Imran Khan.

These seats for women and minorities in Pakistan’s national and provincial legislatures, constitutionally reserved for greater political inclusion, are allocated to various political factions on a proportional basis after considering the number of general seats won by them during elections.

Leaders from Khan’s Pakistan Tehreek-e-Insaf (PTI) were compelled to contest the national polls in February as independent candidates after being deprived of their party symbol, the cricket bat, by the Supreme Court of Pakistan due to internal elections deemed flawed.

The PTI-backed independent candidates won the maximum number of seats, emerging as the single largest bloc in the National Assembly, but chose to join the SIC in the absence of their original party identity.

However, the Election Commission of Pakistan (ECP) decided not to allocate the reserved seats to them on technical grounds, instead distributing the SIC’s share among other parties.

“All of these returned candidates were PTI candidates forced by cascading series of errors of law by the ECP to take on the garb of independents,” Justice Munib Akhtar, one of the 13 members of the Supreme Court bench hearing the case, remarked during the last proceeding on June 4.

The Pakistani top court suspended the Peshawar High Court’s verdict in the case last month that followed the ECP decision and upheld it.

The outcome of the case can be politically significant since it may impact the National Assembly’s composition, influencing how legislations are passed and the government functions.

Khan’s party says it is hopeful of winning 78 reserved seats in parliament given to the rival parties after the elections.


PM Sharif’s administration prioritizes security for local and foreign nationals, announces special security unit

Updated 23 June 2024
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PM Sharif’s administration prioritizes security for local and foreign nationals, announces special security unit

  • The prime minister asks the relevant authorities to ‘consult Chinese experts’ for the unit’s formation in Islamabad
  • Shehbaz Sharif orders the construction of a forensic lab in the capital that is in keeping with modern requirements

ISLAMABAD: Prime Minister Shehbaz Sharif said on Sunday protecting Pakistani citizens and foreign nationals residing in the country was a major priority for his administration, as he announced the formation of a special unit for the purpose in the federal capital, to be developed in consultation with Chinese experts.
Top Pakistani officials have held high-profile meetings in recent weeks to underscore their intent to address the challenge of militant violence, which has jeopardized the government’s plan to invite foreign companies and put the national economy back on track.
A day earlier, the prime minister announced plans to prepare a comprehensive response to the issue, warning that a “soft state” could not strengthen its economy as it struggles to gain investor confidence.
He revisited the issue while chairing a meeting in Islamabad to review the progress of ongoing security and public order projects.
“The protection of Pakistani citizens and foreigners residing in Pakistan is among the top priorities of the state,” he was quoted as saying by a statement issued by his office. “Any negligence in maintaining public order and protecting citizens will not be tolerated.”
The prime minister was briefed about the current law and order situation in the federal capital along with the Islamabad Model Jail, Safe City Project, Federal Anti-Terrorism Department, and Special Protection Unit.
The statement informed that Sharif asked the authorities to “consult with Chinese experts” for the formation of the unit.
The meeting also briefed about the National Facilitation Centers in Islamabad and the K-9 units established for the detection and tracing of drugs and explosives.
The prime minister directed the construction of a forensic lab in keeping with the modern requirements and asked the authorities to recruit the personnel on merit for all security projects in Islamabad.
The meeting was also attended by Federal Minister for Interior Mohsin Naqvi, Deputy Chairman Planning Jahangir Khan, Federal Secretaries, and senior officials from the relevant departments.


National Assembly passes resolution against mob lynchings in Pakistan, demands citizen safety

Updated 24 June 2024
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National Assembly passes resolution against mob lynchings in Pakistan, demands citizen safety

  • The development follows the killing of a local tourist in Swat on the accusation of desecrating the Holy Qur’an
  • Pakistani lawmakers say violent acts committed in the name of religion have become a norm in the country

ISLAMABAD: The National Assembly of Pakistan passed a resolution on Sunday condemning recent mob lynching incidents in Punjab and Khyber Pakhtunkhwa (KP) provinces, while urging relevant authorities to ensure the safety of all citizens, including religious minorities, and bring perpetrators of such violence to justice.
The development follows the recent torture and killing of a local tourist in the picturesque Swat valley of KP, accused of desecrating the Holy Qur’an, whose body was then set alight by a furious mob.
During Saturday’s parliamentary debate, Federal Minister for Planning and Development Ahsan Iqbal emphasized this was not an isolated incident, but part of a troubling series of violent acts committed in the name of religion.
Earlier today, Pakistan’s Defense Minister Khawaja Muhammad Asif echoed the concern, urging the National Assembly to adopt a clear stance on the issue.
“The House believes that right to life is the most cherished right as enshrined in the Constitution of Pakistan,” the resolution presented by Law Minister Azam Nazeer Tarar said. “Every person is to be dealt with in accordance with the law and not otherwise.”
“This House takes serious notice of the recent mob lynchings of our citizens accused of offenses in Swat and Sargodha,” it continued. “It is noted with grave concern that such incidents have recently increased in different parts of the country. The House strongly condemns these horrific and tragic incidents which cannot be tolerated in any civilized society.”
The resolution urged the federal and provincial governments to ensure “the safety and security of all our citizens, including religious minorities and other vulnerable segments of society.”
Referring to another incident where a Christian man was targeted by his enraged neighbors in Punjab’s Sargodha district over blasphemy allegation, the resolution asked Punjab and KP administrations to “take all necessary measures to ensure that persons involved in these incidents are identified, investigated and prosecuted under the relevant laws.”
“The House also expects that the courts shall ensure immediate and speedy justice in these cases,” it added.
The KP police have formed a joint investigation team to investigate the Swat incident and arrest all involved individuals using CCTV footage.
Mob lynchings are not uncommon in Pakistan where even a mere accusation of blasphemy can lead to violence.
In case of Swat, mob members killed the tourist after storming the police station where he was detained, pulling him out and taking him away.


‘Positive’ progress in talks between Pakistani parties as government seeks budget’s parliamentary approval

Updated 23 June 2024
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‘Positive’ progress in talks between Pakistani parties as government seeks budget’s parliamentary approval

  • PPP says its recommendations relating to the budget are based on its manifesto that centers on public welfare
  • The party has taken up issues related to development funds and administrative positions with the ruling PML-N

ISLAMABAD: The Pakistan Peoples Party (PPP) said on Sunday the latest round of negotiations with the ruling Pakistan Muslim League-Nawaz (PML-N) party continued in a “positive way” after the PPP expressed reservations about a range of issues following the presentation of the federal budget earlier this month.
The PPP decided to support the PML-N’s efforts to form a coalition government soon after the last general elections in February, though its top leadership announced it was not interested in becoming part of the federal cabinet or getting ministerial posts.
Prime Minister Shehbaz Sharif invited PPP chairman Bilawal Bhutto-Zardari last week to discuss his reservations over the government’s economic and political policies amid efforts to secure a smooth passage for the budget from parliament.
The two leaders agreed to form negotiating teams to discuss all outstanding issues that mostly related to development funds and administrative positions in the country’s most populous Punjab province.
“Different matters were discussed between the two sides, and the talks continued to move forward in a very positive way,” PPP Secretary General in Central Punjab Syed Hassan Murtaza, who is part of his party’s negotiating team, told Arab News after the latest round of talks with the PML-N in Islamabad earlier today.
“We have given all our recommendations regarding the budget, good governance, appointments and transfers [of bureaucracy], funds for ongoing development schemes in Sindh and other areas,” he continued. “We have also urged to release funds for the schemes suggested by the PPP members.”
Murtaza maintained the PPP’s stance and recommendations relating to the federal budget were based on its manifesto that centered on public welfare.
He said the party had also informed the PML-N that PPP leaders must be consulted if the government wanted to make changes to the local government legislation in Punjab.
According to some reports, it was also discussed during the negotiations that an additional secretary be appointed at the chief minister’s secretariat in Punjab, with the sole responsibility of resolving the issues faced by the PPP.
The PPP also wanted a say in the Punjab administration’s decisions to appoint deputy commissioners, district police officers and revenue functionaries in districts where the party boasts active support.
“Now, we will inform our leadership, and the PML-N delegation will consult their leadership on [these issues] before another round of talks is held to move forward,” Murtaza said. “The final decisions will be taken as per the direction of the party leadership.”


New Pakistan political party to focus on economic reform, reduce government footprint, founder says

Updated 23 June 2024
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New Pakistan political party to focus on economic reform, reduce government footprint, founder says

  • Awam Pakistan Party led by former prime minister Shahid Khaqan Abbasi scheduled for launch on July 6 in Islamabad
  • Founder Miftah Ismail says party leaders will hold workers’ conventions, seminars across the country to mobilize the public

ISLAMABAD: The Awam Pakistan Party, scheduled for launch on July 6 in Islamabad, plans to focus on the economic prosperity of people by extending tax concessions to middle-income and salaried classes and bringing down annual government expenditure, a top party official announced Sunday.
Miftah Ismail, one of the founding members of the party who previously served as finance minister, said that people from all four provinces had already started joining the party.
More than 175 political factions have been registered with the Election Commission of Pakistan, though only 13 of them managed to get their members elected to the National Assembly in the wake of the last general elections held on February 8.
The leading political parties in the country pivot around a central leader who is viewed as charismatic by its followers and play a vital role in getting the popular vote.
Former Prime Minister Shahid Khaqan Abbasi and ex-finance minister Ismail, the driving forces behind the new party, aim to encourage public participation in governance and address the country’s fragile economy through reforms and the privatization of public entities.
“One of our major purposes behind forming the new political party is to struggle for the uplift of poor people through their active participation in politics, governance and economy,” Ismail told Arab News in a conversation over the phone.
“We have to extend tax concessions to middle-income and salaried classes, focus on privatization, limit the government’s footprint by encouraging the private sector and privatize the public organizations to reform the economy,” he added.
Ismail said Pakistan had been one of the leading economies in the region until the 1990s, but the poor governance model brought its development to the lowest level in the last two to three decades.
“A specific elite group is ruling the country without the active participation of the public, experts and professionals,” he maintained, pointing out that his party wanted to focus on improving the education and health sectors.
Criticizing the ruling coalition led by Prime Minister Shehbaz Sharif, the ex-finance minister said the current administration had lost the opportunity for economic reforms by bringing in the latest budget.
“This government has literally wasted opportunities for effective reforms in the governance and economic models,” he said.
Ismail acknowledged it was a long and assiduous journey to establish the new party, adding it would also be challenging to get its members elected to parliament.
“We know it is difficult,” he said, “but the journey of a thousand miles begins with the first step.”
“If elections are held in a year now, definitely we will not be in a position to fully participate in them through our platform,” he continued. “But if we get two to three years ahead of the national elections, we will be in a position to field our candidates across the country.”
Ismail said the Awam Pakistan Party leadership planned to hold workers’ conventions across the country and mobilize the public.
“We will be using social media effectively for our publicity, but along with that, we will be focusing on ground activities like conventions and seminars on issues of public importance,” he added.