The Power Division dismissed reports suggesting that the government intends to impose a fixed tax on solar power.

“There is no truth in the news of imposing a fixed tax on solar power,” the Power Division said in a statement on Saturday.

“The Central Power Purchasing Agency (CPPA) or the Power Division did not send such a summary to the government,” it added.

The Power Division said the Net Metering Policy of 2017 was aimed at promoting alternative energy in the system. “There has been a phase where the solarization has increased very rapidly,” read the statement.

The Division said that such proposals and amendments are being considered to save the poor from further burden.

Power generated through solar came under renewed scrutiny after Business Recorder, citing its sources on Thursday, was the first to report that the government is mulling rationalization of buyback rates of net metering electricity to Rs11 per unit from current rates of Rs21 per unit.

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

As per the report, 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.

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.

Market reaction to Business Recorder‘s report was of immense criticism directed at the government’s consideration as Pakistan has long been advised to follow a path of renewable energy, lower power tariffs and do more on climate change.

However, burdened with overcapacity and idle charges, the government is looking to reduce buyback rates, making the installation of solar power unfeasible. It argues that a shift to solar power will not reduce the burden on the poor and instead, add to Pakistan’s energy sector woes.