Karachi: The federal government was left with no choice but to revise the existing Net-metering regime in the country, as otherwise an unchecked manifold increase in the capacity of on-grid rooftop solar power systems in the coming years would have devastating effects on the national grid, mainly due to the constrained service capacity of the distribution companies.
This was the consensus opinion expressed by the concerned energy experts at a webinar on “Net-metering debate: facts vs claims” organised by the Energy Update in partnership with the Pakistan Solar Association (PSA) and Renewable Energy Association Pakistan.
The speakers at the webinar said that amending the Net-regime was necessary for the financial viability of the system introduced a couple of years back to purchase clean power from consumers having on-grid rooftop solar systems, as the government’s latest move wouldn’t discourage expansion of renewable energy in Pakistan. They emphasised that the government shouldn’t be paying capacity payments to the consumers who switched to the solar Net-metering regime.
Dr Fiaz Chaudhry, Former NTDC managing director who now serves as the Director of the LUMS Energy Institute, told the participants of the webinar that the unchecked increase in on-grid rooftop solar systems had been creating an unbearable financial burden on the government, having already much-constrained fiscal capacity to manage the national electricity system.
He opined that the revision in the Net-metering conditions mainly concerned affluent consumers who consumed over 300 units of electricity in a month and who made up a small percentage of the customer base in Pakistan’s power system.
He said that Rs 18 to Rs 20 per unit continuous capacity payments to the Net-metering consumers were simply unbearable for the government and utterly lacked any technical justification. He said that undue capacity payments had been constantly inflating the monthly bills of the vast majority of power consumers in the country, having no rooftop solar systems. Dr Chaudhry likened unjust inflated payments to affluent Net-metering consumers to evolving a “Smart theft” system in the country under the government’s patronage.
He assured the audience that slashing the Net-metering buy-back rates was aimed at overcoming an obvious financial disparity in the electricity system of Pakistan, as the government’s latest move shouldn’t be viewed as an anti-solar energy step.
Syed Faizan Ali Shah, a renowned renewable energy expert, said the Net-metering policy had been originally conceived in 2015, when there was a severe dearth of clean power production and a widening shortfall of grid-supplied electricity in Pakistan. He said the revision in the Net-metering policy had become inevitable, as had been done in many other countries, given the phenomenal expansion of renewable and base-load power generation capacity of the country. He said that unchecked installation of rooftop systems was responsible for the burnout of the transformers and other expensive equipment and installations of the loss-making distribution companies. He said that given the current pace of increase in Net-metering customers in the country, the cumulative rooftop solar power generation capacity in Pakistan would have increased from four gigawatts to eight gigawatts in a few years had the government not taken the much-needed corrective measures. He said the reforms in Net-metering systems had become necessary to ensure the financial and technical sustainability of the national grid in Pakistan. Had the government allowed the rapid expansion of on-grid solar systems, the operational electricity demand in Pakistan would have decreased to such an alarming level that it couldn’t ensure the technical sustainability of the national grid, he said.
Abid Latif Lodhi, Power Planning and Monitoring Company Managing Director, said the revision in the Net-metering buy-back tariff was in accordance with the grid-level procurement of electricity by the government. He said the reforms in the Net-regime concerned over 2,40,000 power consumers, which made up 42 per cent of the total 500,000 domestic customers using three-phase electric supply. He said that any amendments to the Net-metering policy had nothing to do with the vast majority of low-income power consumers who used single-phase electricity.
He claimed that the revised Net-metering regime had protected the economic interests of the power consumers who had invested in solar rooftop systems for their homes.
Moin M Fudda, senior financial and insurance expert, said the revised per-unit Net-metering rate would further decrease to Rs 8 after application of the general sales tax, which would further discourage prospective consumers planning to purchase rooftop solar systems. He said the new Net-metering policy wouldn’t favour the power consumers from middle-income groups who borrowed loans or spent their hard-earned money to install solar systems to slash their inflated monthly electricity bills. He urged the government not to bypass the National Electric Power Regulatory Authority to impose the revised Net-metering rates in the country. Fudda recalled that the NEPRA in the past hadn’t acted upon the recommendation of the government to slash the Net-metering tariff of the consumers who had obtained licenses from the authority.
Waqas Moosa, PSA Chairman, called upon the government to introduce a grace period before imposing the new Net-metering policy, whose implementation should be in phases to protect the genuine interests of the concerned consumers and traders in the clean market industry. He opined that the new Net-metering policy would simply ruin the market for on-grid inverters in Pakistan. He said the revision in the Net-metering policy should have allowed ample time for the concerned traders to adopt a fresh business strategy, who had already imported a large quantity of inverters and solar panels or placed orders with the foreign companies for the same.
Hasnat Khan, PSA Senior Vice Chairman, said that revised Net-metering rates would compel affluent power consumers to start using batteries to store solar power generated during the daytime to further decrease their reliance on the grid-supplied electricity.
Irfan Ahmed, a senior renewable power expert who also moderated the webinar, said the revision in the Net-metering policy should be a win-win situation both for the concerned consumers who had installed rooftop solar systems and the government that had excess installed generation capacity.
Naeem Qureshi from Energy Update emphasised that the government should conduct proper dialogues with the concerned stakeholders in the energy sector instead of unilaterally revising important policies having implications for the clean electricity market in Pakistan.
He also urged NEPRA to conduct hearings at the provincial level to let the concerned consumers give their input on the proposed changes to the tariff regimes that directly concern them.
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