Pakistan’s power sector is standing at a tipping point as inconsistencies in policy execution threaten the country’s shift to clean energy. The government, once a vocal supporter of rooftop solar as a sustainable solution, has recently made a sharp U-turn—especially in the net metering regime—leaving both citizens and businesses in uncertainty.
At peak summer, electricity demand reaches around 29,000 megawatts (MW), while installed capacity stands above 46,000 MW. However, capacity remains underutilized due to inefficient grid infrastructure, overreliance on imported fuels, and outdated planning. Solar energy, contributing around 5% of total power generation in 2025, was once seen as a key to fixing these issues. But now, policy reversals risk undermining progress.
Between 2022 and 2024, rooftop solar installations surged as net metering incentives encouraged adoption. Net-metered capacity skyrocketed from just over 300 MW in 2021 to 2,813 MW by FY25, with more than 280,000 households onboard. However, the recent drastic cut in the buyback rate—from Rs27 to Rs10 per unit—has caused alarm among solar adopters.
“The solar transition, once seen as a cornerstone of Pakistan’s energy future, is now treated like an inconvenience,” said Mian Sohail Nisar, Patron-in-Chief of the Pakistan Industrial and Traders Associations Front.
Experts argue this change isn’t driven by energy needs but financial strain on utility companies. In 2024 alone, Rs159 billion in cost burden was shifted onto grid users due to high buyback rates. Projections estimate this could swell to Rs4,000 billion over the next decade without proper reform.
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But blaming solar users is misplaced. As one former official put it, “The problem isn’t solar—it’s bad planning. The grid was never upgraded to handle reverse power flows.” Instead of embracing this growing user base, the government has responded with a gross metering model—charging separately for imported and exported electricity—without adequate consultation or transition plans.
Consumers who invested heavily in hybrid inverters, batteries, and rooftop panels under government encouragement now feel betrayed. Many fear reduced returns, confusing billing, and even reports of tampering with smart meters by power distribution companies.
This isn’t the first policy reversal. Over two decades, Pakistan has seen shifting strategies—from hydropower to LNG to renewables—only to backtrack due to political pressures, lobbying by utility firms, or IMF conditions.
Energy analyst Syed Farid Hussain highlights a lack of a clear transition roadmap. “You can’t shift to clean energy without synchronized reforms—grid upgrades, pricing models, and consumer protection,” he said.
Pakistan’s power sector debt has already crossed Rs2.6 trillion. Yet instead of tackling inefficiencies and theft in distribution companies, the state is shifting the burden onto the very individuals helping move toward sustainability.
“Pakistan does not need policy U-turns; it needs energy clarity,” said Sohail Nisar. “Without that, we risk pushing away the very solutions that could power our future.”
Further Links: Alternative Energy Development Board – AEDB