ISLAMABAD, July 25, 2025 – Pakistan’s once-promising shift toward clean energy is faltering as the government rolls back its supportive solar policies, sparking frustration among households, businesses, and energy experts.
For years, rooftop solar systems were promoted as a solution to rising electricity prices and energy insecurity. Net metering incentives encouraged over 280,000 households and businesses to install rooftop solar panels, pushing total net-metered capacity from just 300 MW in 2021 to 2,813 MW by FY25.
But the government’s abrupt decision to slash the solar buyback rate from Rs27 to Rs10 per unit has shaken investor confidence and left solar users feeling betrayed.
“The solar transition, once seen as a cornerstone of Pakistan’s energy future, is now treated like an inconvenience,” said Mian Sohail Nisar, Patron-in-Chief of the Pakistan Industrial and Traders Associations Front.
Why the Policy U-turn?
Energy experts say the change stems from mounting financial pressure on the national grid. As solar users reduced their reliance on grid electricity and sold excess power at high rates, distribution companies struggled to recover fixed infrastructure costs.
In 2024 alone, Rs159 billion of the grid’s cost burden shifted to non-solar users, with projections suggesting the imbalance could reach Rs4 trillion within a decade if left unchecked.
However, critics argue the real problem lies in outdated grid infrastructure and poor planning. “The government never upgraded the distribution network for reverse power flows, and now they’re blaming solar users for systemic inefficiencies,” said a former power sector official.
Gross Metering Sparks More Confusion
The government has also introduced gross metering, which bills separately for imported and exported electricity. While this model could stabilize the grid financially, analysts warn it was implemented abruptly without stakeholder consultation, discouraging future investment in clean energy.
Consumers Feel Betrayed
Thousands of consumers who invested in solar panels, hybrid inverters, and battery storage under earlier government incentives now face shrinking returns and unclear billing policies. Reports have also surfaced about covert smart meter replacements by distribution companies to curb buyback rates.
Deeper Structural Issues
Pakistan’s power sector remains stuck in a cycle of policy inconsistency, circular debt exceeding Rs2.6 trillion, and overreliance on imported fuels.
Energy analyst Syed Farid Hussain said the lack of a clear, long-term roadmap for renewable energy is the biggest failure. “You can’t build a clean energy transition without aligning grid upgrades, pricing, and consumer protection. Piecemeal reforms aren’t a strategy.”
With electricity demand peaking at 29,000 MW while installed capacity exceeds 46,000 MW, inefficiencies, power theft, and circular debt remain unaddressed. Instead of reforming the grid and cutting losses, the government is placing the burden on solar adopters who followed its earlier advice, analysts say.
“Pakistan doesn’t need policy U-turns; it needs energy clarity. Without that, we risk pushing away the very solutions that could power our future,” warned Sohail Nisar.
