Net Metering refers to a payment system that rewards solar energy system owners with the energy they generate for the grid.
In this method the power generated by solar panels is sent into the grid. Net metering provides consumers full credit for every kilowatt-hour that is that is exported to the grid permitting the customer to be responsible for the excess.
For instance, if the consumer’s credit for power bills exceeds the amount consumed typically, the credit is transferred to the next month, and then adjusted in the bill of the consumer. However, electricity distribution corporations (DISCOs) are not able to pay the cost of excess energy that consumers supply for the grid.
The solar net metering law was formulated following a careful study of successful models across the globe. In September of 2015, the National Electric Power Regulatory Authority (Nepra) has issued net-metering regulations , which allow DISCOs to buy excess units of electricity that are generated by consumers and to offset them against the electricity consumed by the grid.
According to these regulations, anyone who is a customer who is connected to the grid (having three-phase connections) is eligible to use net-metering that is available for smaller-scale (1kW up to 1MW) renewable energy installations.
Renewable energy can be a long-term power source. Photovoltaic solar (PV) technology provides the ability to access affordable electricity throughout the life of the system. Commercial and residential customers are able to change their energy consumption towards renewable power (RE) and reduce their power costs.
Pakistan has a huge potential for producing electricity using solar power. Nearly all areas that are part of Pakistan are hot and dry except for a few regions that are located to the north.
In spite of this, the nation produces just 1.16 percent of its energy via solar energy. However 64% of energy requirements are met by using fossil fuels.
The huge potential that is untapped provides a fantastic opportunity for consumers to generate and sell electricity to the grid.
As of now, more than 42 approved vendors and service providers who specialize in the installation of solar and wind PV systems that allow net metering with up to 250kW is registered to the Alternative Energy Development Board (AEDB). Many more are awaiting approval by the department.
The astronomical potential of and the growth of solar power generation is an immediate threat to private interests of Independent power producers (IPPs).
Nearly 4,000 net metering licenses have been issued in Pakistan between July and September 2021 quarter, a rise from 2,000 issued in the previous quarter in 2020. This suggests an upward trend for the near term.
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Consumers who install solar panels offer a variety of advantages. They include the ability to offset the cost of power, aid to small businesses and more work for engineers and youngsters. The government also has the ability to eliminate massive overheads, the recurring costs of dams for hydropower as well as the ever-present issue of circular debt that is attached to IPPs.
The immediate advantages of the installation of solar panels is (i) Pakistan complies with the Sustainable Development Goal 7 (SDG-7) (ii) It is in compliance with Pakistan’s obligations to comply with the Paris Agreement and United Nations Framework Convention on Climate Change (UNFCCC) (iii) It also meets Pakistan’s commitment in Agenda 2030 to increase renewable energy in its mix of energy (iv) solar net metering creates many job opportunities. (v) The energy produced is safe and acceptable to humanity and the entire world since it doesn’t cause global warming. (vi) The power producer is able to get carbon credits for each amount of electricity produced by solar panels.
Government officials, as an unexpected decision, has begun to block this policy initiative that has been extremely successful without conducting any analysis. Net metering is a direct danger to IPPs and, consequently consumers are facing obstacles to the issuance of net meters since the beginning of the year.
These challenges have probably been created by IPPs which have already entrapped the power industry in an endless loop of perpetual debt.
The government should conduct an examination of the current solar net metering and discover the gaps to improve the system. The government can be an net winner if gaps are closed, but it is apparent that powerful lobbyists are exerting influence over government policies and the way it operates.
Thus, it is imperative that the current net metering program be backed and improved upon with a realistic review of scientific research and the identification of gaps that should be taken care of by the government, instead of involuntary changing its rates and hindering the availability of net meters to consumers.
Around the globe, countries offer incentives to consumers to purchase solar panels. In Pakistan however, it is evident that the government provide no incentives, but it’s also acting to protect the interests of the vested interest who have stifled the power sector by establishing their monopoly.
The government should permit the net metering policy function within the market mechanism, and not accept any interference from outside players.
Additionally, net metering is in line with Pakistan’s obligations under international law that has been ratified by the UNFCCC, Paris Agreement, SDG-7 and Agenda 2030.
The writer has worked as an environmental consultant for national, international, and provincial organizations.
