Govt is Considering Reduction in Solar Net Metering Tariff

The government told the Senate Standing Committee on Power on Tuesday that it might lower net metering tariff for rooftop solar power units.

The meeting, chaired by Senator Azam Nazeer Tarar, focused on various energy-related issues, including investigations into alleged malpractices surrounding the award of contracts for a foreign-funded energy project.

Government officials also claimed at the meeting that the circular debt was frozen at Rs. 2.31 trillion.

During the session, Power Secretary Asad Rehman Gilani said recent fuel cost adjustments had surpassed tariff estimates due to higher insurance costs and tanker charges from the Middle East.

Concerns were raised about the net metering tariff, currently set at Rs. 22 per unit, with government officials suggesting a potential reduction. Caretaker Power Minister Muhammad Ali and Secretary Gilani argued for a lower tariff and said affluent urban homeowners could afford higher rates compared to smaller consumers. They emphasized the need for equity, suggesting that the current tariff unfairly burdens poorer consumers.

The secretary briefly mentioned that the circular debt, totaling Rs. 2.310 trillion, had been successfully managed as of December 21, 2023, meeting targets set by the IMF. He attributed this to efficient power sector management, tariff adjustments to address losses, and an anti-theft campaign that yielded Rs. 85.7 billion in recoveries since August 2023.

The committee also discussed the award of contracts for the Dasu project’s transmission line. The contracts under scrutiny involved companies such as Sinohydro Corporation and Harbin Electric International for constructing transmission lines, as well as consultant GOPA Intec of Germany.