Net metering power: Govt mulling bringing buyback rates down to Rs11/unit from Rs21

ISLAMABAD: The government is mulling rationalization of buyback rates of net metering electricity to Rs 11 per unit from current rates of Rs 21 per unit, well-informed sources told Business Recorder.

“The current trend of installation of net metering across the country has misbalanced government’s plan to pay capacity charges from the consumers as rich segment is converting it to net metering,” the sources added.

There is an impression in the Power Division that whatever advantage the consumers could get they have availed it, and now damage has begun in the country’s power sector.

“Whoever is rich has money and space is shifting to net metering and now the financial burden will be passed on to poor consumers, who are already facing the brunt of hefty bills,” the sources added.

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The government does not want to discourage solarization in the country, but the current rate of Rs 12-22 per unit is not practicable, the sources maintained.

Consumers are recovering their investment in 18 months at the current rate. The government will reduce the current buyback rate to Rs 11 or Rs 11.50 per unit. The recovery period should be expanded to ten years, the sources maintained.

The Power Division argues that consumers have installed solar system for their own consumption and rates of additional generation should be fixed on the affordability of the receiver i.e. Discos.

The sources said solar plates of 6000 MWs have been imported as of March 31, 2024. Currently, 3000 MW of electricity is being produced through solarization.

In 2022, National Electric Power Regulatory Authority (NEPRA) initiated the process of amendments to the Alternative & Renewable Energy Distributed Generation and Net Metering Regulations, 2015 and proposed the following amendment: In Sub-Regulation 5 of Regulation 14 of the Regulations, the word ’National Average Power Purchase Price (NAPPP)“ be replaced with ‘National Average Energy Purchase Price (NAEPP)’.

The process of amendment in the Regulations was initiated keeping in view increase in National Average Power Purchase Price (NAPPP) from existing Rs.12.95/kWh to Rs.19.32/kWh, after notification of revised consumer end base tariff by the Federal Government effective from July 25, 2022.

The proposed amendment in Regulations was published in newspapers for eliciting public opinion for a period of 30 days. The Authority, however, considering the comments received from various stakeholders and media reports conducted a public hearing in the matter on September 27, 2022.

The public/consumers, during the hearing, strongly opposed the proposed amendments and argued that electricity through net metering is one of the most efficient methods in incurring low distribution losses, with no investment for distribution infrastructure, and the proposed amendment in the Regulations would discourage net metering/solar installation.

The Authority sat on the decision for several months due to pressure from the then government and later announced that it had carefully reviewed the submissions of the stakeholders made during the hearing & in writing and is also cognizant of the vision of the government for induction of cheap and clean renewable energy into the system.

Although net metering is predominantly based on the concept of minimizing the electricity cost through rooftop solar self-generation for self-consumption and not for commercial sale and DISCOs have to maintain Grid & Generation Capacities for the Net Metering Consumers during non-solar hours as well.

However, at the same time, the economic benefits of net metering in terms of displacement of costlier electricity, savings of foreign exchange and incurring minimal losses, cannot be ignored. Moreover, the quantum of net metering units, at present is very low, ie, below 1% of the total energy purchased by DISCOs.

In view of the discussion, the Authority decided not to amend the existing NEPRA (Alternative & Renewable Energy) Distributed Generation and Net Metering Regulation, 2015.

Copyright Business Recorder, 2024