Nepra may curtail rooftop solar customers’ perks

Israr Khan
Wednesday, Sep 28, 2022

ISLAMABAD: The government’s power regulator on Tuesday made up its mind to curtail rooftop solar customers’ perks by more than half by redesigning the Net Metering Regulations 2015.

If the regulator makes the amendment, the credit rates to rooftop solar customers will be substantially reduced from current rates. The regulator wants to reduce the per unit price paid to the roof-top solar power generators for their net surplus units from the existing Rs19.32 per unit to Rs9 per unit, as the chairman of the authority clearly said, “It was not for the purpose of earning, but to reduce own cost. It was for self-generation.”

Since the solar energy industry is in its infancy, with meagre competitors and solar panels much pricey, the policy redesign to reduce the credit rates to consumers at this time would be discouraging for the new entrants. In Pakistan, the rooftop solar customers are only 20,700, and instead of discouraging them, the government should compensate them, a participant said.

“We did not want to generate another IPP [independent power producer]. It was not for the money-making venture,” Nepra Chairman Tauseef H Farooqi said while chairing a public hearing on the proposed amendment to the National Electric Power Regulatory Authority (Alternative & Renewable Energy) Distributed Generation and Net Metering Regulations 2015.

“We could unilaterally take this decision, as we [Nepra] have powers but we deliberately invited the stakeholders to know their views,” he said, adding, “Media created a misconception; Nepra never takes decisions under pressure.”

On Sept 1, 2015, the authority notified vide S.R.O. 892(1)/2015, the Nepra (Alternative & Renewable Energy) Distributed Generation and Net Metering Regulations 2015. Farooqi said, “There are 20,700 roof-top solar power generators in Pakistan, we are not only looking after them but there are also 36 million other power consumers.”

Interestingly, one distributed generator from Karachi asked the chairman why not the authority allows them to carry forward the surplus units that they could use later and give to neighbours or to mosque. “We don’t want to sell them at this rate of Rs9 per unit.”

Farooqi said, “There are also such places in the world where excess units are taken for free from the generators, cash given to them instead of units.” An energy expert asked the chairman that then Disco will take from them at Rs9 per unit and sell it to other power consumers at higher rates, Farooqi said, “You have nothing to do with that. We are adding renewable and thermal power and taking its average price.”

Another distributed generator customer said, “You are discouraging us. You are encouraging to buy IPPs’ electricity at higher rates.” The chairman replied they were not discouraging. “This government is adding a renewable capacity of 10,000 MW. We have already classified hydropower as renewables, so currently our share of RE is 35 percent of our energy mix. We are modernising the energy sector.”

It may be noted that on Dec 20, 2017, Nepra brought the first amendments to these rules by issuing another SRO 1261 (J)/2017 in which the term of the agreement between distributed generator and Disco was increased from three years to seven years.

Interestingly, in regulation 14, a sub-regulation (5) was inserted, “The Authority may determine the tariff payable by the Distribution Company to the Distributed Generator from time to time; provided; however, the tariff once awarded to a Distributed Generator shall remain valid for a term of the Agreement/ License.” When one of the participants pinpointed this amendment under which the authority cannot change the tariff and which is still applicable, and no amendment was proposed regarding it except a change in price.

The chairman including members of the authority and officials was unaware of it, which clearly says, “The tariff once awarded to a Distributed Generator shall remain valid for a term of the Agreement/ License.” The chairman replied that it was a valid point and added, “We would look into it.”

Rafique Ahmad Shaikh, a member of Nepra, asked the person who raised the question that whether there was any commitment of tariff in regulations. “I think it’s just net off of excess units.”

When Shaikh asked an official, who looks after these issues in Nepra whether the tariff was there in the rules, the official nodded in the affirmative. The Nepra chairman further said it was for the netting off of the cost of excess units. “We think that Rs9 per unit should be paid for excess units.”

He also said that this year we have paid nearly Rs1,400 billion as the capacity cost to IPPs, which is more than the defence budget. We have around 42,000 MWs installed capacity. He also said that the payback period of your rooftop plants is nearly 3.6 years and with tariff increase, the period reduces.