The growing reliance on solar energy has imposed a staggering Rs200 billion burden on consumers who depend on the electricity grid for the fiscal year 2023-24, The Express Tribune reported while citing a research report.

As more households adopt solar power, those still connected to the grid have experienced an Rs2 per unit increase in electricity rates, highlighting the financial pressures and disparities caused by the unregulated expansion of solar energy facilitated by net metering.

The report cautions that without prompt government intervention, the financial strain on grid-dependent consumers will only worsen. Projections suggest that if solar energy usage reduces grid demand by 5% this fiscal year, grid-reliant consumers could incur an additional Rs131 billion in costs. Should the reduction reach 10%, this figure could double to Rs261 billion.

To tackle the rapid and uncontrolled shift towards solar energy, the report stressed the need for urgent reforms and policy adjustments. These changes are essential to ensure equitable electricity pricing and maintain the stability of the electricity grid.

A recent report recommended significant changes to the current energy pricing structure in Pakistan, suggesting a shift from net metering to net billing or feed-in tariff systems at lower rates. It advocated for the introduction of fixed grid fees that accurately reflect the true costs of electricity and the establishment of an ancillary services market to improve grid stability.

The report also emphasised the need to amend the distribution code to better manage two-way power flow, ensuring fair pricing and a harmonious integration of renewable energy benefits while maintaining grid sustainability.

The rise of rooftop solar installations has notably affected energy demand across the country. Estimates indicate that consumers utilising a 10-kilowatt net metering system can save up to Rs20 per unit on their grid expenses while those with behind-the-meter installations can reduce their fixed costs by approximately Rs7 per unit.

Despite such savings for solar users, the overall decrease in demand for grid electricity during daylight hours has resulted in an 8-10% drop in sales. This shift has placed additional financial pressure on consumers who do not use solar power, as they are now bearing a larger share of the grid maintenance costs.

The study has pinpointed several technical challenges facing Pakistan’s distribution companies, including issues like voltage instability, reverse power flow, and an increasing demand for services such as frequency regulation and reactive power support. Tackling these challenges will necessitate significant infrastructure investments, which could further burden the already strained energy sector.

The report paints a concerning picture for the future of Pakistan’s electricity grid, predicting sharp declines in demand during midday hours due to peaks in solar energy generation, juxtaposed with a surge in demand during the evening. This fluctuation complicates grid management and operational planning.

The study warns that without prompt reforms, distribution companies may suffer “severe losses” stemming from rising tariffs, decreasing grid revenues, and a rapid shift towards solar energy. If these issues are not addressed, they could jeopardize the long-term sustainability of the energy sector in Pakistan.