Pakistan’s transition toward solar energy continues to gain momentum as the share of net metering in the country’s total power generation rose by 57 basis points year-on-year in September 2025. According to data compiled by Arif Habib Limited (AHL) using NEPRA’s latest figures, the increase underscores growing reliance on distributed solar systems by households and industries. The report highlights a 0.8 percent rise in overall power generation during the same period, while net-metered units surged by 28.1 percent month-on-month, further illustrating the expanding role of renewable energy sources in meeting domestic power needs.
NEPRA projects that power demand will grow by 2.8 percent year-on-year in FY25, primarily due to seasonal industrial activity and urban development. However, rising electricity tariffs have led consumers to explore alternative sources such as solar energy to manage their costs. Energy experts note that this shift reflects both economic necessity and environmental awareness. Senior consultant and solar energy specialist Engineer Faiz Bhutta stated that increasing electricity costs have compelled individuals and businesses to seek alternative power solutions. He explained that while solar adoption benefits the environment, it presents challenges for the national grid since lower consumption reduces system utilisation, leading to financial strain on the government through fixed capacity payments owed to independent power producers.
Bhutta further explained that distribution companies have introduced policies that slow down net metering approvals. Previously, consumers were allowed to apply for systems up to 1.5 times their sanctioned load, but some DISCOs now restrict applications to an equal load capacity. Additional conditions such as requiring separate transformers for systems above 10 kilowatts, increased seed money, and lengthy bureaucratic procedures are discouraging adoption. As a result, more consumers are exploring off-grid or hybrid systems equipped with battery storage capable of powering homes for several days. These trends suggest a growing inclination toward energy independence as citizens seek stability amid fluctuating costs and policy uncertainty.
The government is considering transitioning from net metering to a gross metering structure, under which separate tariffs would apply to imported and exported electricity, replacing the current unit-for-unit offset model. Analysts warn that such changes, if not carefully designed, could discourage solar adoption at a time when Pakistan faces a paradox of energy surplus and low utilisation. During winter, Pakistan’s installed generation capacity stands at approximately 37,000 megawatts, while actual demand is only around 8,000 megawatts. This gap results in heavy capacity payments that burden public finances. Experts believe that instead of restricting solar growth, policy focus should shift toward reviving industrial activity to increase grid consumption and enhance exports.
Bhutta also suggested that tariff reforms could improve overall grid utilisation. Introducing four tariff zones instead of the current two could encourage greater power usage during off-peak hours, especially in winter. Despite ongoing policy debates, the increasing number of consumers turning to solar power reflects an organic transition driven by public demand rather than regulation. With fuel imports remaining expensive and circular debt surpassing Rs1.2 trillion, distributed solar generation is emerging as a critical factor in Pakistan’s energy landscape. Analysts emphasize that aligning government policy with public energy choices could enable a more sustainable, efficient, and financially balanced power sector in the years ahead.
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