Pakistan Ends Net Metering for Solar Energy in 2026, Impact on Solar Industry

The Government of Pakistan has introduced a significant change in how rooftop solar users are compensated for exporting excess electricity to the grid. As of February 2026, the widely used net metering system has been replaced with a new net billing mechanism under updated regulations issued by the National Electric Power Regulatory Authority (NEPRA). This shift is already stirring strong reactions across the country, especially among homeowners, businesses, solar installers, and renewable energy advocates.

The change affects anyone with rooftop solar panels in Punjab, Sindh, Khyber Pakhtunkhwa, Balochistan, and other regions. With solar adoption rising rapidly in cities like Multan, Lahore, and Karachi, this policy shake‑up has serious implications for energy costs, investment returns, and the future of Pakistan’s solar growth.

What Changed: From Net Metering to Net Billing

Net Metering (Old System)

Under the previous rules, household and business solar owners could:

• Generate solar power from rooftop panels
• Send extra electricity to the grid during the day
• Receive one‑to‑one credits (unit‑for‑unit) against their monthly bills

This made solar financially attractive because excess units produced during daytime could offset units consumed from the grid at night, often resulting in very low or near‑zero electricity bills.

Net Billing (New System)

As of February 9, 2026, NEPRA replaced net metering with net billing. Key differences include:

• Solar users now sell excess electricity at the national average energy price (~Rs. 11 per unit)
• They purchase electricity from the grid at full consumer tariff (~Rs. 25–50 per unit, depending on usage slab)
• Credits are therefore worth much less than the cost of grid power

The result: solar owners get significantly lower compensation for exported energy than before.

Why the Policy Was Changed

Government and Power Ministry Rationale

According to Awais Leghari, the shift was necessary to:

• Prevent rising costs for non‑solar customers, who faced higher rates due to widespread net metering subsidies
• Improve grid stability as solar penetration increased rapidly
• Ensure electricity pricing aligns better with national energy economics

Officials noted that over 466,000 net‑metered users and roughly 6–7 GW of rooftop solar capacity (part of Pakistan’s total 20–22 GW solar base) were exporting power back to the grid. While renewable energy growth is positive overall, the old system was seen as increasingly expensive for the national grid.

Government Actions After Backlash

Public backlash was immediate and intense. On February 11, 2026, Prime Minister Shehbaz Sharif ordered a review to protect existing solar users under their original contracts until expiry. This means:

• Old installations under net metering will continue under previous terms until their agreements end
• New installations will be subject to the net billing system

So while the policy remains changed for future solar setups, existing users received a temporary safeguard.

Why Solar Users Are Angry

Critics argue the new net billing rules:

• Reduce the financial benefits of solar by up to 60–70%
• Extend the time it takes to recover the cost of solar panels (payback period nearly doubles)
• Discourage further solar adoption when Pakistan needs more clean energy
• Push users toward costly alternatives like battery systems instead of grid‑connected savings

Many rooftop solar owners feel the policy penalizes early adopters who invested large sums in clean energy expecting long‑term savings.

Social media posts from Lahore, Karachi, and Multan reflect frustration, suggesting the shift could slow down Pakistan’s renewable energy momentum at a time when the country needs it most.

Winners and Losers of the New Policy

Winners

Non‑Solar Households:

• Reduced risk of hidden tariff burdens due to solar subsidies
• Grid costs spread more evenly across all consumers

State Power Grid Operators:

• More predictable energy flows
• Lower risk of instability from unpredictable rooftop solar exports

Losers

Rooftop Solar Owners (Existing and New):

• Lower return on investment
• Longer payback periods
• Less incentive to install new systems

Solar Installers and Renewable Startups:

• Slowdown in demand for grid‑tied solar installations
• Business uncertainty in the short term

High Solar Producers:

• Those exporting large amounts of power to the grid now get less value
• Loss of expected savings pushes some toward battery storage

What This Means for New Solar Buyers

If you are considering installing solar panels:

• Calculate expected savings carefully under the new net billing rates
• Consider hybrid systems with battery storage to maximize self‑use
• Evaluate long‑term electricity consumption trends
• Compare grid‑connected and off‑grid solar options

With net billing, homeowners may benefit more by storing daytime solar power and using it at night instead of exporting it to the grid at low rates.

What Could Happen Next

Policy Reviews and Adjustments

Energy experts and industry groups are calling for ongoing adjustments, such as:

• Higher buyback rates for solar exports
• Time‑of‑use credits for peak generation periods
• Incentives for storage integration
• Sector subsidies for renewable manufacturing

The government may respond with updated rules aimed at balancing financial sustainability with renewable growth.

Growth in Off‑Grid Solutions

Because net billing reduces export value, many consumers might:

• Add solar batteries for storage
• Shift to hybrid systems
• Consider completely off‑grid solar models

This could accelerate the battery storage market in Pakistan over the next 12–24 months.

Final Summary

• Pakistan ended net metering in 2026 and replaced it with net billing.
• Solar users now receive lower compensation for exporting power.
• The policy aims to protect non‑solar users and improve grid stability.
• Existing net‑metered contracts are protected until expiration.
• New solar installations face tougher financial terms.
• Winners include non‑solar households and grid operators.
• Losers include rooftop solar owners and renewable installers.
• Future solar strategies may involve batteries and hybrid systems.