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The argument is that they have long-term contracts. What has an independent regulator done when these contracts were concluded at such a high rate for projects with an asset factor of only 19%? NEPRA set the tariff for them and granted them licenses. Large business groups own all of these independent producers, but small businesses or middle-class households do the net metering. It is easier for government and a regulator to target and punish honest, middle-income consumers. “The changes to the net metering policy should apply not only to the 28,000 net metering consumers, but also to the 35 million non-net metering consumers who have already paid the highest tariffs of Rs 28.07/kWh and Rs 34.39/kWh respectively for off-peak and peak periods, and would be further burdened by the impact of the increase in the billing price of these wealthy net metering consumers. said one of the consumers which is IESCO`s purchasing power. If the agency approves the proposed change, it would be a win-win for both sides, the sources continued. According to the details, a number of consumers have contacted the registrar of the National Electric Power Regulatory Authority (NEPRA) to protest the proposed change in its rules, calling it a discouragement for solar power in the country. A loss of up to D may occur, while some consumers may still have to foot the bill. During the hearing, NEPRA had to provide a valid explanation with figures for this step. In contrast, President NEPRA made a moving description that these 20,700 net metering consumers were to give 10.32 rupees/kWh to DISCOs for the additional units exported; For 36 million consumers who did not choose this facility because they do not have the resources to do so. Before going into more detail about the likely impact of this change, it is important to mention that NEPRA is an autonomous organization by law.

In practice, however, its decision-making independence with regard to various aspects of its competence, including consumer tariffs, is compromised. Therefore, NEPRA`s repeated claim that NEPRA took this step for these 36 million consumers is hard to believe. This statement contradicts what NEPRA stated in its Article 30. The September 2022 State of the Industry 2022 report indicated that the behaviour of DISCOs vis-à-vis net metering connections is not favourable. The installed capacity under self-consumption and net metering for these 20,700 consumers does not exceed 476 MW, according to Malik. Assuming a capacity factor of 19% and given that 25% of self-generated electricity is exported to the grid, Malik expects only 23 MW of overcapacity to be exported to the grid by consumers affected by the change. On September 27, 2022, NEPRA held a public consultation on NEPRA`s proposed amendment to the Power Generation and System Metering Regulations, 2015. According to NEPRA, as a result of this change, the current national average purchase price of electricity of 19.32 rupees/kWh will be replaced by the national average purchase price of energy of 9 rupees/kWh. The difference between the two is that the purchase price of electricity includes the purchase price of capacity. NEPRA also clarified earlier in a press release that these changes only apply to 20,700 consumers across Pakistan who are allowed to measure net under NEPRA regulations. The latest consultation, announced on Nepra`s net metering website, began on August 24, 2022 and is expected to conclude this week. This proposal only concerned the amendment of the wording of a phrase used in the rules from “national average purchase price of electricity” to “national average purchase price of energy”.

Discos had previously asked Nepra that instead of net metering, all units exported by a decentralized producer could be purchased at the Power Purchase Price (PPE), but the proposal was not accepted by Nepra on the grounds that net metering is mainly based on the concept of avoided costs. As long as the compensation unit mechanism remains applicable, the net metering regime will always be viable and tempting. With the current off-peak tariffs of Rs 28.07/kWh, the payback period for net metering consumers has been reduced to about 4 years. The electricity regulator says it is a myth in various forums that nightclubs are the beneficiaries of the proposed change, adding that electricity supply costs for nightclubs are in fact passed on; Therefore, any reduction in the feed-in price of net units of measure would result in a reduction in the overall cost of purchasing electricity and would therefore directly benefit all consumers. The regulator confirmed that any increase in the cost of net metering would be borne by all electricity users. The government agency said last week that the potential change to net metering — which allows solar households to sell excess electricity to the grid, reducing their net energy bills — relates only to a proposal to increase payments for solar power injected into the grid. “If the tariff for a solar IPP is set at around Rs 9/kWh, would it be in the interest of consumers to buy the same electricity from consumers of net metering at twice the price? How would Nepra justify these inconsistencies in its own decisions in various forums,” the sources asked. The change in Pakistan`s net metering rules will affect 20,700 solar system owners. Consumers who have installed solar panels in their homes to avoid high electricity bills in Pakistan are now seriously “at risk” as the country`s electricity regulator, NEPRA, will change its rules so that users supplying electricity to WAPDA via net meters are likely to suffer a loss of up to 20%, while some consumers will now have to foot the bill. The National Power Regulatory Authority (Nepra) has been forced to allay fears that its plans to change Pakistan`s grid metering rules could hurt solar plant owners and the country`s clean energy ambitions. The statement continues: “The units would be compensated according to the mechanism already approved. The rule change will only apply to surplus units sold by net metering consumers.

Well-informed sources in Nepra told Business Recorder that the number of net metering consumers is currently around 28,000. Excess units delivered by net metering consumers to the grid in August 2022 were approximately 4.2 GWh, which is expected to increase exponentially as installed capacity for distributed generators (DGs) increased from less than 100 MW in fiscal year 2019-2020 to 500 to 750 MW. A draft Integrated Production Capacity Expansion Plan (IGCEP) 2022-31 was recently submitted to NEPRA for approval. The draft plan takes into account 480 MW of net metering per year until 2031. This amendment to the NEPRA Regulation will never achieve the objective. ISLAMABAD – The National Electric Power Regulatory Authority (Nepra) is designed to protect the interests of net metering consumers and the remaining 35 million consumers across the country. The proposed amendment initially raised concerns that the changes could jeopardize the country`s clean energy ambitions. But Nepra later said that “the regulatory change only applies to surplus units sold by net metering consumers,” amounting to 20,700 households across Pakistan. Nepra has not yet publicly discussed the findings of the consultation. The change in Pakistan`s net metering rules is expected to discourage consumers from installing rooftop PV systems.

“The interests of net metering consumers must be protected, but at the same time, Nepra must protect the interests of the remaining 35 million consumers who do not have the net metering facilities,” the sources added. Nepra itself confirmed that at the time of its declaration, only 20,700 households benefited from net metering. The current mechanism provides that kWh provided by a net metering consumer during peak periods will be offset by kWh provided by a discotheque during peak periods and kWh provided by a consumer during off-peak periods will be offset by kWh provided by a discotheque during off-peak periods. With regard to the impact of this change, the net metering or self-generation capacity for 20,700 consumers does not exceed 476 MW. With 476 MW of installed capacity with a plant factor of 16% to 19%, the maximum photovoltaic (PV) production could be 90 MW. About 25% or only 23 MW of additional units are exported to the grid. With the current production of about 30,000 MW, what difference would 0.08% of self-generation systems make for these 36 million consumers without PV systems on the price of the basket? The National Electric Power Regulatory Authority of Pakistan (Nepra) has completed a public consultation on a proposal to amend the 2015 regulations for distributed generation and net metering. It will increase the price that households with net meters pay to feed excess electricity into the grid, from PKR 19.32 ($0.089)/kWh to PKR 9/kWh. At the same event, a utility spokesperson pointed to the lack of training, aging electricity infrastructure, financial problems for energy companies and lack of standards for net meters as reasons for meter installation difficulties.