ISLAMABAD: Pakistan’s rooftop solar sector witnessed unprecedented growth in FY2026, with solar generation under the net-metering regime soaring to nearly 7,000MW, prompting the government to replace the existing net-metering framework with a net-billing system to address mounting financial and technical challenges in the power sector.
Speaking at a SAARC webinar, Energy Advisor to the Power Division Engr Syed Faizan Ali said solar generation under the net-metering regime expanded from just 190MW in FY2020 to approximately 6,978MW by June 2026—an almost 37-fold increase in six years.
He explained that the rapid expansion was driven largely by macroeconomic factors rather than policy incentives. Between FY2021 and FY2025, the Pakistani rupee depreciated by nearly 75 percent, electricity tariffs increased by around 140 percent, and global solar panel import prices fell by approximately 60 percent, making rooftop solar an increasingly attractive investment for consumers.
According to the presentation, the one-to-one retail credit mechanism under the net-metering regime imposed a significant financial burden on the power sector, with an estimated Rs101 billion revenue impact in FY2024. This prompted policymakers to introduce a new net-billing framework under the Prosumer Regulations 2026, which came into effect on February 8, 2026.
Under the new regime, electricity exported to the grid is compensated at a lower reference price rather than the retail tariff, while electricity imported from the grid continues to be billed at standard retail rates. The policy aligns Pakistan with international markets, including California, which have also transitioned from net-metering to net-billing to improve utility cost recovery while encouraging distributed renewable energy.
Engr Faizan noted that the key policy challenge going forward is balancing three critical objectives: protecting consumers who invested under the previous net-metering rules, ensuring rooftop solar remains economically viable for future adopters, and reducing the cross-subsidy burden on consumers who do not own solar systems.
Pakistan introduced its net-metering framework through NEPRA in 2015, allowing consumers to offset electricity imports with exported solar power on a one-to-one basis. While the system significantly accelerated rooftop solar adoption, it has now been replaced with net-billing for new consumers.
However, existing consumers who enrolled under the 2015 regulations will continue to enjoy the benefits of the original net-metering arrangements until their current agreements expire.
