PSA calls for continued support of net metering

Says capacity charges of IPPs are driving factor behind the proposed alterations

LAHORE:

The Pakistan Solar Association (PSA) has issued a resounding call to action, urging authorities and stakeholders to maintain their support for net metering as a critical element of the nation’s sustainable energy future. Net metering stands as a cornerstone in the shift toward clean and affordable energy, aligning Pakistan with the global transition to solar power.

The PSA has expressed concerns about potential changes in the net metering policy, citing capacity charges of Independent Power Producers (IPPs) as the driving factor behind the proposed alterations. The association deems this approach misleading, warning that it could exacerbate electricity prices in the country.

During a press conference on Tuesday, PSA Chairman Amir Chaudhry asserted that the actual issue at hand is rampant energy theft, leading to a significant revenue shortfall for Distribution Companies (DISCOs). This shortage contributes to the continuous growth of circular debt.

“In February this year, Power Division Secretary Rashid Mehmood Langrial informed the National Assembly Standing Committee that electricity worth Rs380 billion is stolen every year in the country. He further stated that the impact of Rs520 billion in stolen electricity would be passed on to consumers in bills from the next fiscal year, which is the current fiscal year,” Chaudhry noted.

Chaudhry emphasised that net metering offers a sustainable energy solution, enabling consumers to generate their electricity through solar panels and feed excess power into the grid. This not only reduces electricity bills but also contributes surplus energy to the national grid, benefitting both consumers and the environment.

Conversely, with electricity theft, the cost of financing circular debt, resulting from the recovery shortfall, is imposed on paying customers in the form of surcharges. Moreover, electricity bills are burdened with multiple taxes, such as a 1.5% electricity duty, an 18% GST, and additional taxes totalling 8%, along with advance income taxes ranging from 5% to 12% of the total bill value. This leads to exorbitant electricity costs, discouraging bill payment and exacerbating the issue.

Rather than addressing electricity theft or re-evaluating the impact of extensive taxation on electricity bills, the focus has shifted unjustly toward solar energy.

The PSA expressed concern over the dissemination of inaccurate information and false propaganda by stakeholders from IPPs and DISCOs, diverting attention from the core issue and undermining trust in the solar industry.

“The solar energy sector in Pakistan holds immense potential, not only in providing clean and sustainable energy but also in creating job opportunities and driving economic growth. However, resistance from those hesitant to embrace this change is hindering progress,” Chaudhry stated.

The PSA firmly believes in a future where Pakistan's energy landscape is more sustainable and eco-friendly. Achieving this vision requires steadfast government support for the solar energy sector and the creation of a fair and enabling environment for all stakeholders, said the official.

Published in The Express Tribune, September 6^th, 2023.

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