In a significant development regarding potential changes to solar net-metering regulations, the federal cabinet has rejected the initial proposal to drastically reduce the buyback rate for solar power to Rs. 10 per unit. However, discussion continues and key policy changes are under consideration.

Yasir Nazir of Aaj News reported that while the proposal to reduce buyback rates faced rejection at the cabinet level, the matter is far from settled. Further discussions within the government are expected to continue. A crucial briefing for the Prime Minister by the task force assembled to review the net-metering policy was scheduled for today, Friday, but did not materialize. These discussions are now likely to be carried forward into the coming week.

Adding another layer of complexity, the proposed changes to net-metering, including the contentious buyback rate, will also be on the agenda for discussions with the International Monetary Fund (IMF) delegation that arrived in Pakistan today.

Sources familiar with the matter suggest that the Prime Minister himself intervened to halt the initial proposal for the significant reduction in buyback rates. This indicates a potential point of resistance within the government. However, if the Prime Minister ultimately gives his nod to any revised proposal, the issue will then move forward for implementation.

The ongoing deliberations underscore the government’s complex task of balancing the promotion of renewable energy with concerns about the financial stability of the power sector and the potential impact on grid consumers.

Sources say the outcome of the continued internal discussions and the crucial role the Prime Minister’s approval will play in any final decision will be pivotal in shaping the future landscape of solar energy adoption across Pakistan.

Meanwhile, reports suggest that government is planning to change regulation using the money bill or budget.

These include proposed increases in equipment fees, the introduction of a new tax structure on service and installation charges, and the application of standard import duties on solar equipment, all potentially to be included in the upcoming Budget 2025-26.