The Ministry of Energy is creating a new solarization policy to boost renewable energy use in the country.
Among the proposed measures is a significant reduction of net metering electricity rates by 50%, alongside adjustments in buyback power rates and capital return timelines for net metering customers.
According to sources, the new policy aims to reduce capacity payment costs by cutting the buyback power tariff from the current Rs. 22 to Rs. 11. Furthermore, the proposal recommends raising the current three-year capital return period for net metering clients to five years.
To ensure fair distribution and effective use of solar energy resources across the country, the policy will also specify the percentage of net metering allotted to each grid. The federal cabinet’s approval will be sought to facilitate implementation, demonstrating the government’s commitment to advancing sustainable energy policies.
Additionally, it has been suggested that net metering users receive their money back in five years as opposed to three.
The Ministry of Energy claims that the increase in solar users—whose numbers have increased by an astounding 60% in the last year —underlines the rising acceptance of renewable energy sources. At the moment, the nation has about 150,000 solar users who together produce 3,000 megawatts of solar-powered electricity.
Still, there are issues: net metering arrangements cost on-grid consumers an annual sum of Rs110 billion. According to the sources, the monthly net metering units have increased to 550 million.
According to earlier reports, the Ministry of Power was considering imposing a fee on residential or commercial solar panel installers, a proposal put up by the Central Power Purchasing Agency. It purportedly suggested taxing solar panel installation at a rate of Rs2,000 per kilowatt.
A grid of 12 kilowatt solar panels is expected to yield revenue of Rs 2,000 per kilowatt. This one-time charge will be applied to those installing residential or commercial solar panels, according to sources in the Energy Ministry.
The Power Division did, however, declare that the nation did not yet have a set tax on solar energy. Reportedly, the government has not received any summary from the Power Division or the Central Power Purchasing Agency (CPPA) about the imposition of solar energy charges.
Read More: Govt to significantly reduce solar net metering buyback rates