In a concerning development for solar panel owners, the government has proposed a reduction in net metering rates to the International Monetary Fund (IMF), aiming to curb revenue losses for power distribution companies (DISCOs).
Under the proposal, the government would purchase electricity from solar panel users at Rs10 per unit, down from the current rate of Rs27 per unit.
This move follows reports that the IMF is concerned solar energy could affect the future efficiency of the national power sector. Pakistan has recently experienced a more than 10 per cent decline in grid electricity demand. According to reports, major cities such as Lahore, Karachi, Islamabad, Faisalabad, and Peshawar account for 80 per cent of the country’s net metering users, with total connections exceeding 226,440.
The IMF is also reportedly concerned about how Pakistan will manage and incorporate consumers who are completely off-grid, as they do not contribute to grid upkeep or capacity payments. This could potentially increase costs for those still dependent on the grid.
Talks between Pakistan and the global lender began this month for the first biannual review of the $7 billion Extended Fund Facility (EFF). The IMF delegation, led by Nathan Porter, is holding discussions with Pakistani authorities.
The demand for solar panels in Pakistan has surged recently due to rising electricity prices. Solar panels offer a more cost-effective option for the public and are eco-friendly, as they generate electricity from sunlight without relying on fossil fuels, which are a major contributor to carbon emissions.
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