New rules change net-metering for 283,000 households

New regulations for net-metering in Pakistan will change how surplus solar electricity is bought by the grid. Under the revised rules, excess power from net-metered homes will be purchased at a rate closer to the grid's average electricity cost. The increase in solar power generation has happened due to a sharp drop in solar panel prices, particularly from China. This price decline has made solar energy popular, especially in rural areas where traditional electricity access can be limited. Recent data shows there are nearly 2.96 million households using solar panels, with the majority in rural regions. These households primarily consume the electricity they generate and are not expected to be impacted by the new net-metering changes. The rise in solar usage has reduced electricity demand from the grid during the day, leading to lower prices for electricity generated during peak sun hours. The article describes a “duck curve” effect seen in many countries where the grid demand drops during the day due to solar power. In the evening, as the sun sets, demand rises and prices for electricity increase significantly. Net-metering users benefit from swapping cheap solar energy generated during the day for more expensive grid electricity at night. However, they do not pay their fair share of fixed infrastructure costs, which are passed on to other consumers. These regulations primarily affect 283,000 households, a small fraction of the total connected to the grid. The changes aim to create a fairer energy market and prevent increased costs for the majority of consumers. Net-metering users may still find their investments in solar viable, potentially recovering their costs in about three years. Looking forward, experts believe that as battery prices decrease, more households may go completely off-grid. The energy market will need to adapt to these changes to avoid losing customers and creating stranded assets. Efficient use of solar energy could drive future growth in the power sector.