ISLAMABAD: Pakistan has sharply reduced the rate at which households and businesses are paid for excess electricity generated from rooftop solar systems, a move that lowers returns for consumers but is expected to ease financial pressure on state-run power utilities, according to new regulations notified this week.

The change shifts Pakistan from a net metering regime, under which solar users offset their electricity bills at the same rate they pay for grid power, to a net billing framework that separates buying and selling prices. Consumers will continue to pay full tariffs for electricity drawn from the grid while receiving a lower, market-linked rate for excess power they export.

Under new regulations notified by the National Electric Power Regulatory Authority (NEPRA) on Feb. 9, 2026, consumers exporting surplus electricity to the grid will no longer be compensated at retail tariffs.

“The power purchase price for electricity supplied by a prosumer to the distribution company shall be the national average energy purchase price,” the regulator said in the notification.

Pakistan has seen an unprecedented boom in rooftop solar over the past three years as households and businesses turned to private generation to escape record electricity prices, frequent outages and inflation-driven energy costs. 

Solar power grew from 4 percent of the energy mix in 2021 to over 14 percent–25 percent in 2024-2025, official figures show. Driven by skyrocketing grid tariffs, Pakistan became one of the world’s top new solar adopters, importing roughly 22 gigawatts (GW) of solar panels in 2024 alone. Industry data shows tens of thousands of new solar connections have been added annually, significantly reducing demand from the grid during daylight hours.

Power distribution companies, however, have warned that net metering was eroding revenues, worsening losses and shifting costs onto non-solar consumers, a growing concern in a sector already weighed down by billions of dollars in circular debt.

The revised framework seeks to rebalance incentives while still allowing consumers to generate their own electricity, officials say.

The new regulations apply to distributed generation systems using solar, wind or biogas technology with installed capacity of up to one megawatt. Installed capacity may not exceed a consumer’s sanctioned load, and utilities may restrict new connections if injections exceed 80 percent of a local transformer’s rated capacity.

Projects above 250 kilowatts will require technical studies before approval. All new agreements will be signed for five years and renewed under the updated rules.

Existing net-metered consumers will remain on their current contracts until expiry, after which they will transition to the new billing system.

NEPRA said the policy aims to balance renewable energy adoption with grid stability and financial sustainability as Pakistan tries to reform a power sector marked by chronic losses, rising subsidies and persistent fiscal pressure.