ISLAMABAD — Pakistan’s latest rooftop solar reversal has brought short-term relief to consumers after the Power Division asked the National Electric Power Regulatory Authority to drop licensing and fee requirements for solar systems of 25 kilowatts or less, April 28, 2026.
The move follows public criticism over what many consumers described as a “sunlight tax,” but the broader dispute over net billing, export rates and regulatory consistency remains unresolved.
Pakistan solar policy enters another credibility test
The Power Division has formally asked NEPRA to restore the previous approval system for small solar users, under which distribution companies processed applications for systems up to 25 kilowatts without a NEPRA licence or application fee, according to Dawn’s report on the government’s move.
The relief is politically important because most residential rooftop systems fall within that smaller category. It is also limited. Unless NEPRA formally amends or clarifies the rules, households, installers and lenders will still face uncertainty over how applications are processed, how long approvals take and whether future charges could return.
The Power Division said it had earlier warned NEPRA about the adverse impact of the change and asked for alignment with the previous regulatory framework. Industry stakeholders, including solar trade groups and renewable energy companies, also objected during hearings, arguing that shifting approval authority away from distribution companies would create bureaucratic hurdles, The Express Tribune reported.
Fee rollback eases one pressure point, not the whole dispute
The immediate controversy centered on a one-time fee of Rs1,000 per kilowatt for grid-connected solar users. That charge, reported as part of NEPRA’s new approval framework, removed the previous distinction between small and larger systems and added upfront cost for households already facing high electricity bills, according to Profit by Pakistan Today’s account of the fee change.
But the fee is only one piece of a larger policy shift. NEPRA’s 2026 prosumer framework moved new rooftop solar users toward net billing, under which electricity imported from the grid is billed at the applicable tariff while surplus electricity exported to the grid is credited at the national average energy purchase price, as stated in the NEPRA Prosumer Regulations 2026.
That means the rollback may reduce paperwork and upfront costs for small users, but it does not restore the older economics of one-for-one net metering for new applicants. For many prospective consumers, the question is no longer just whether solar is allowed, but whether the payback period is stable enough to justify investment.
How Pakistan got here
Pakistan’s rooftop solar policy began as a solution to power shortages. In early 2015, the country approved grid-connected solar, rooftop installations and mortgage financing for home solar panels as part of a broader effort to boost clean energy adoption, Reuters reported at the time.
Later that year, NEPRA approved a national net metering program for solar photovoltaic and wind generators under 1 megawatt, allowing eligible residential, commercial and industrial consumers to sell electricity back to the grid, according to the International Energy Agency’s policy tracker.
That framework helped rooftop solar grow from a niche option into a mainstream hedge against expensive grid power. Over time, however, policymakers began raising concerns that generous export credits and falling panel costs were shifting grid costs onto consumers without solar.
The debate was already visible before the latest rollback. A Pakistan Institute of Development Economics analysis argued that net metering should be revised only alongside grid upgrades and better monitoring, while also questioning claims that non-solar consumers were necessarily subsidizing solar users, in an earlier policy review on net metering.
Grid pressure keeps policy uncertainty alive
The government’s challenge is that rooftop solar is both a consumer relief valve and a stress test for the power system. Solar users reduce daytime demand from the grid, but they still rely on the grid at night and during low-generation periods. That creates pressure over who pays for wires, backup capacity and system maintenance.
That pressure is expected to grow. Pakistan’s rooftop solar generation could exceed daytime grid demand in some major industrial regions during certain periods, a senior climate official told Reuters in November 2025.
A Dawn editorial warned that repeated shifts from net metering to net billing, followed by partial reversals and fee rollbacks, risk eroding investor trust and slowing adoption. It also argued that Pakistan needs a storage strategy because solar without batteries can reduce daytime demand while leaving evening peaks largely intact, according to Dawn’s editorial on solar policy uncertainty.
What consumers should watch next
The next test is whether NEPRA formally restores the 2015-style process for systems of 25 kilowatts and below. Consumers should also watch whether distribution companies regain a clear role in approvals, whether pending applications are processed without delay and whether the Rs1,000-per-kilowatt fee is removed in writing rather than only opposed in statements.
For households, the practical strategy is shifting. Smaller systems designed mainly for self-consumption may remain attractive because they reduce purchases from the grid. Oversized systems built to export large surpluses are less compelling under net billing, especially if export credits remain below retail tariffs.
For policymakers, the rollback offers a chance to rebuild confidence. Pakistan can encourage solar adoption while protecting the grid, but that requires a durable framework for approvals, tariffs, storage and cost-sharing. Without that clarity, each new fee, reversal or clarification will keep the Pakistan solar policy debate alive — and keep consumers guessing.
