Government Considers Reduction in Net Metering Tariff for Solar Energy

During the Senate Standing Committee on Power meeting held on Tuesday, government officials hinted at the possibility of reducing the net metering tariff for rooftop solar power units. Senator Azam Nazeer Tarar chaired the session, which addressed several energy-related concerns, including investigations into alleged irregularities surrounding contracts awarded for a foreign-funded energy project.

Officials informed the committee that the circular debt had been stabilized at Rs. 2.31 trillion. Asad Rehman Gilani, the Power Secretary, explained that recent fuel cost adjustments had exceeded tariff estimates due to increased insurance costs and tanker charges from the Middle East.

One of the focal points of discussion was the current net metering tariff, currently set at Rs. 22 per unit, with government representatives suggesting a potential reduction. Caretaker Power Minister Muhammad Ali and Secretary Gilani advocated for a lower tariff, arguing that wealthier urban homeowners could better afford higher rates compared to smaller consumers. They stressed the importance of fairness, suggesting that the current tariff disproportionately burdens lower-income consumers.

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Secretary Gilani briefly touched upon the successful management of the circular debt, amounting to Rs. 2.310 trillion as of December 21, 2023, meeting the targets set by the IMF. He credited this achievement to efficient management of the power sector, tariff adjustments to mitigate losses, and an anti-theft campaign that resulted in recoveries totaling Rs. 85.7 billion since August 2023.

The committee also deliberated on the awarding of contracts for the transmission line of the Dasu project. Companies such as Sinohydro Corporation and Harbin Electric International, tasked with constructing transmission lines, as well as consultant GOPA Intec of Germany, were under scrutiny regarding these contracts.

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