Regulating solar energy

Nepra's draft protects utilities, stalls solar adoption, energy reform

Nepra's newly released draft Prosumer Regulations, 2025, ostensibly designed to "balance" the interests of electricity consumers and distribution companies, reads less like reform and more like a defensive manoeuvre to shield an ailing power utility sector from the disruptive rise of solar energy.

The proposed changes include: future net-metering contracts reduced from seven to five years; solar generation capacity for prosumers halved; compensation for surplus energy slashed to the National Average Energy Purchase Price - roughly half of what current prosumers receive. While framed as technical necessities to prevent transformer overloads and standardise procedures, these measures come against a backdrop of substandard Disco performance and mounting consumer frustration. For years, Pakistan's utilities have survived on subsidies and debt surcharges, all while passing inflated costs onto consumers. Now, as households and businesses increasingly turn to solar and other decentralised energy solutions, Nepra's draft aims at containment - slowing the very innovation that could ease pressure on the grid and reduce electricity costs. The five-year contract ceiling and reduced compensation risk are chilling new solar adoption at a time when on-grid solar capacity has already crossed 6,000MW. The policy may safeguard system stability, but it also indicates that the government and energy giants are uncomfortable with the growing independence of consumers who have indirectly challenged the outdated energy model.

Energy policy cannot be a shield for inefficiency. A genuine balance between utilities and prosumers requires structural reforms, not regulatory curbs that stifle renewable adoption. Nepra has opened the draft for public comment. The window is brief. If Pakistan lets bureaucratic caution or utility self-interest dictate its solar policy, the country risks stalling a critical transition to a sustainable, consumer-driven energy future.