How Net Metering works in Pakistan? A Complete Guide

Net metering is a billing process that allows solar energy users to send back excessive energy produced by their solar panels to grid stations and avail of credits and different buyback programs in return. This system enables consumers to use energy from the grid during low production periods such as at night or in rainy and cloudy weather to balance their energy usage. This initiative will help to promote clean energy production and encourage users to send excess energy to the grid.

This is becoming an affordable solution in Pakistan due to rising electricity prices and frequent power shortages. People are now shifting to solar systems due to their lot of benefits like high buyback rates and fixed long-term licenses. This setup not only reduces your electricity bills but also allows users to earn profit by selling excess energy to the grid. This is a long-term and cost-effective energy management solution.

How Net metering work in Pakistan?

The net metering solar system works with two-way meters, which can track energy consumption and production amounts and ensure that users only get charged for their net energy uses. This process starts with applying to your local energy distribution company (DISCO) to install a Green meter that tracks the flow of electricity in both directions.

For example, suppose a solar system is producing 500 units per month and consumers are using only 300 units in a month. In that case, the remaining 200 units will credited to their account and it will help to reduce their overall bill. On the other hand, if energy consumption is increased from their production, then it will be charged to their bill. In Pakistan, according to NEPRA, consumers who can generate 1KW TO 1MW are eligible to get net metering benefits.

How to apply for Net Metering?

1. Solar System Installation: The first step is installing a solar system that must be an on-grid or hybrid system that is connected by a three-phase electricity meter. Make sure that the installed system capacity exceeds your energy consumption because only an extra amount of energy can be sold back to the grid through net metering.
2. Active Connection: You need an active electricity connection from your local electricity distribution company with a proper billing history. This will ensure that you are already a registered user of the power grid station.
3. Contact AEDB-Registered Installer: you have to contact an official solar company, which will manage the complete process of net metering applications on your behalf because NEPRA wants applicants to work through an AEDB-registered solar company.
4. Application Preparation: The official solar company will help you to prepare your application. You will need important documents, like your national ID card, utility bills, property ownership proofs, and other different forms provided by DISCO.
5. Inspection and NOC Issuance: After the submission of the application the Punjab Energy Department or any other relevant authority will inspect the site. If your installation setup meets all regulatory standards, then they will issue a No Objection Certificate (NOC), that will allow you to proceed to the next process.
6. Agreement Signing: After NOC approval, you will have to sign a three-year agreement with the local distribution company. This agreement allows a user to transport excess energy to the national grid and, in return, receive credits or other buyback programs.
7. Generation License Allotment: This agreement is forwarded to NEPRA for further verification. After a detailed review, NEPRA issues a generation license, that will give you rights to produce and sell energy to the grid and officially recognize you as an independent power producer.
8. Green Meter Installation: The final step is installing a green meter at your site to measure both energy consumption and excessive energy transfer to the grid. You can save your electricity bill by using credits for exported energy and also earn money.

How to calculate net metering bills?

You can calculate your net metering solar system bill easily by following this method;

Step 1: Off-Peak Hours Bill Calculation

Example: A consumer imports 40 units and exports 200 units during off-peak hours. 

Result: The consumer earns a credit of PKR 2,240 during off-peak hours

Step 2: Peak Hours Bill Calculation

Example: A consumer imports 120 units and exports 50 units during peak hours. 

Result: The consumer owes PKR 1,400 during peak hours.

Step 3: Final Net Bill Calculation

Final Result: The consumer has a credit of PKR 840, which will be adjusted in the next month’s bill.

Benefits of Net Metering in Pakistan

Buyback Net Metering Rates in Pakistan

Pakistan introduced this metering process for the first time in 2015 at an average price of 27 PKR per KWh. Up to the middle of 2024, approximately 2.2GW of solar energy was connected to the grid, due to a promising payback period from 2 to 4 years for the solar system between 5KW to 25KW. This rapid increase in solar energy usage promotes clean energy production and also helps to reduce peak hour demand.

Power distribution companies are concerned about the high amount of solar energy in the grid, which could increase electricity costs for consumers without a metering setup. To solve this problem, the government is thinking about lowering the buyback rates up to PKR 15/kWh. This will slow down the process of recovering solar costs, but still, most users can recover within 5 years. Larger systems often have even shorter paybacks because of lower costs per kW.

Conclusion

Net metering allows you to save on electricity costs by using solar energy and selling any extra power to the grid. It helps to reduce your high electricity bills, promotes clean energy, and reduces reliance on carbon footprint and fossil fuels. While it offers financial and environmental benefits, careful planning and policy adjustments are essential to balance consumer savings and grid stability.