Distributive policy

Proposed policy change could discourage use of solar power

Solar panels. Photo: The News/File

LAHORE: The proposed policy change in electricity tariff from rooftop solar net metering may discourage the use of one of the cheapest clean energy sources in the country.

In accordance with this decision, the National Electric Power Regulatory Authority (Nepra) is in the process of revising downwards the tariff for electricity produced from solar net metering, which is intended for export to distribution companies (DISCO). The proposal, if implemented, will discourage the use of solar energy as consumers will face excessive electricity bills. The Pakistan Solar Association rejected the proposal for an energy regulator, saying such a regressive measure would discourage the use of solar power in the country.

Domestic consumer interest in solar net metering is likely to decline as Nepra plans to bring net metering customers on par with the wholesale electricity supplier. Therefore, net metering may become unavailable due to the decline in the selling price of electricity.

According to a public announcement made by Nepra on August 24, comments were invited on a suggested amendment to the 2015 Distributed Generation and Net Metering Regulations of the National Electric Power Regulatory Authority (Alternative and Renewable Energy). ).

The proposed amendment will leave domestic consumers in the dilemma of losing their investments in solar energy due to the fact that excess electricity sold to the distribution company as swap agreements will no longer be relatively profitable. Ideally, units generated by solar net metering by the domestic generator should be treated on an equal footing with units purchased from the distribution company.

Any proposed difference between the “average national energy purchase price” and the “average national electricity purchase price” will negatively affect the competitiveness of small investments in the country’s green future.

Solar net meter generators are primarily not in the business of generating and selling power, rather they sell excess electrical power units to DISCO and the utility sells at its own rates to other consumers . In a single-buyer power market in Pakistan, domestic consumers see net solar metering as an attractive option, not only to have relatively cheap electricity, but also to get rid of the nuisance of poor billing.

Meanwhile, the National Electric Power Regulatory Authority (NEPRA) clarified on Friday that no changes had been made to net metering regulations, saying it had only solicited comments from the General public.

The regulator made the clarification following media reports about net metering after NEPRA released an advertisement seeking public comment. NEPRA called it a “misrepresentation” by a quarter of the press, as it said no changes had been made to the regulations.

He further said, “It is important to stress that the impact of the changes is only for 20,700 consumers across Pakistan who have been allowed to measure the net under NEPRA approved regulations.” She further clarified that the proposed change would have no impact on self-consumption. The units would be compensated according to the mechanism already approved. The rule change only applies to surplus units sold by net metering consumers. The impact of any higher cost paid on excess units would be shared by the network’s remaining consumers, he said.

NEPRA fully supports the solar initiative of the Government of Pakistan and as such the NEPRA regulation on net metering has absolutely no impact on the initiative of the Government which seems to have again been misquoted in the mainstream and social media. In addition, the government’s planned rate of large-scale solar supply will be much cheaper than what Nepra allows for net-metering consumers.

Nepra welcomes input from all stakeholders and any decision in this regard would be made after due consideration of feedback received from stakeholders and with the public interest in mind.

On the other hand, Rashid Mehmood, Secretary Power, in his Twitter post, opined that the uproar around net metering is an information war of wealthier households against poorer households. According to current projections, 2% of consumers (almost all using a three-phase meter) will have a net meter with a capacity of 3,600 MW.

This would cost over 100 billion rupees per year to power utilities by 2027. This cost will be transferred to the rest of the consumer connections (mainly single phase). Even at the proposed Nepra tariff of Rs 9 per unit, the wealthiest households will make a net profit of Rs 5 per unit and it will be charged to poorer households without net metering, he observed.

Net metering is a free service to transfer electricity generated during the day to night and not a business, he concluded.