Solar net Metering – How it works in Pakistan – Application procedure & Guide

If you happen to have solar panels installed on your roof, it’s highly likely that you’re not fully utilizing all the energy they generate. Instead, any surplus energy is typically fed back into the grid, contributing to your local utility’s electricity supply. Without receiving compensation for this surplus energy, the financial viability of solar panel investments might become more challenging to substantiate.

While residential battery storage solutions can assist in retaining excess energy for later use, there exists a more straightforward and cost-effective approach to address this energy surplus. Net metering stands as a prevalent method through which utility companies reimburse homeowners for the surplus electricity they generate from their solar panels but don’t immediately consume. While net metering enjoys widespread recognition as the predominant compensation system.

Net Metering Overview

Net metering is a framework enabling consumers in Pakistan to produce their electricity using renewable sources such as solar panels and share any surplus energy with the national grid. This system empowers both individuals and businesses to function as both energy consumers and producers, contributing to the development of a more sustainable energy ecosystem.

In an effort to address the energy deficit, the Pakistani government is actively endorsing the deployment of small-scale renewable energy systems through the Alternative Energy Development Board (AEDB), with a primary focus on the Net Metering concept.

In 2015, the National Electric Power Regulatory Authority (NEPRA) formally introduced the guidelines and protocols for net metering as part of the “(Alternative & Renewable Energy) Distributed Generation and Net Metering Regulations, 2015” act.

How does Net metering Works

When the sun shines brightly, in its rays the PV panels produce more electricity than you utilize instead of the evening time. In that scenario, the meter starts to run backward which seems strange, it’s because of the additional energy transferred back to the main system of utility providers.

Consequently, you get credit points for your energy account and utilize them to purchase the electricity from utility in case solar panels aren’t working to produce electricity such as during the night time. The electrical companies deal with this by sending back and getting an exchange in the form of credit points rather than cash.

Essentials for Solar Net Metering in Pakistan

The Simplified Steps of Net Metering Cycle

  • Solar System Installation
  • Application Preparation
  • Inspection and NOC Issuance
  • Agreement Signing
  • Generation License Allocation
  • Activation

Net Metering Rates in Pakistan

Net metering rates, also referred to as tariffs, play a crucial role in determining the economic advantages and feasibility of adopting net metering in Pakistan. Presently, the net metering tariff is set at Rs. 19.32 per kilowatt-hour (kWh), governing the transaction of electricity between consumers and the National Electric Power Regulatory Authority (NEPRA).

In the context of net metering, it’s essential to differentiate between off-peak and peak rates. Off- peak rates denote the lower-priced electricity charges applied during specific time periods when electricity demand is relatively low, typically during late evenings or early mornings. Conversely, peak rates correspond to higher-priced electricity charges during periods of heightened electricity demand, usually occurring between 5 pm and 10 pm.

Net Metering Tariff Remains Unchanged

The proposal under consideration involved lowering the tariff for net metering users from Rs19.32 per unit to Rs9 per unit. Currently, power distribution companies (DISCOs) purchase surplus electricity from solar energy generators at a rate of Rs19.32 per unit. However, DISCOs have expressed the desire to reduce this rate to Rs9 per unit.

The regulatory authority has announced that it will not make any changes to the existing Nepra (Alternative and Renewable Energy) Distributed Generation and Net Metering Regulations 2015. As a result, net metering users will continue to sell surplus electricity to DISCOs at the current rate of Rs19.32 per unit.

The authority emphasized its commitment to further promoting net metering in the country.

LESCO Net Metering

LESCO Net Metering plays a vital role in tackling the widening electrical shortfall and operating as an alternative to balance the national grid. However, in 2018 LESCO gave 20 net metering to those who agreed to produce the energy by utilizing solar panels. In 2023, the establishment schemed to inject 10,000 megawatts of energy into the national grid through the solar system.

How to Apply for LESCO Net Metering

Initial Stages

NOC by Energy Officer

The customers need to mention in writing the application the official visit to their homes including certified professionals. They will evaluate whether you’re eligible for a meter or not, they will check the wiring length, insulation, and the integrity of equipment.

Technological Standard

NEPRA demanded from your side that your inverters according to the UL 1741 specification, IEEE 1547 2003, IEC 61215 or EN, or other international measures.

Single Line Diagram

For the installation of net metering, the  Distributor Generator must provide protective and control single-line schematics for the connection. Fulfillment of Safety Prerequisites.

  • Must follow the IEC and IEEE rules when you install the interconnection disconnect switch
  • Your inverters meet with the function of an anti-islanding

Procedure for Net Meter Application

Continue the reading to get awareness about the application for LESCO Net Metering

  • Visit your nearby LESCO office, and submit your application.
  • Within 5 days, LESCO will send you a confirmation message but if something is missing, it will inform you in 7 days.
  • Your application will take 20 days to receive.
  • After receiving the application, LESCO will evaluate it, if your application doesn’t meet the prerequisites given by LESCO, you will be informed within 3 days but if you properly fulfil its requirements, then you will be informed within 10 days.
  • After proper investigation, your application will be sent to NEPRA within 7 days for a license.
  • After that LESCO will demand to pay the required fee within 20 days for connection.
  • After payment, within one month the customer will get their connection.

Charges for LESCO Net Metering

Size of DG facilityFee
0-20 KWFree of Cost
20-50 KWRs. 500/-
50-100 KWRs. 1000/-
100-1000 KWRs. 5000/-

Impact of Net Metering Rates on Consumers

Net metering rates in Pakistan hold significant sway over consumers, exerting an influence on the financial feasibility, return on investment (ROI), and payback period associated with the adoption of net metering.

Return on Investment (ROI)

Consumer investments in renewable energy systems, like solar panels, a directly impacted by net metering rates. A higher net metering rate translates to more substantial financial returns for

consumers. A favorable net metering rate empowers consumers to more effectively offset their electricity expenses, potentially leading to a shorter payback period and greater savings over their solar installation’s lifespan.

Payback Period

The payback period for solar installations signifies the duration required for the savings from a net metering system to match or exceed the initial investment outlay. Net metering rates wield a direct influence on this payback period, with higher rates resulting in a shorter timeframe for cost recovery. A shorter payback period enhances the appeal of renewable energy system investments for consumers, as they can begin reaping substantial savings at an earlier stage.

In Pakistan, thanks to the prevailing net metering policy, the payback period for solar systems varies from 4 to 7 years, contingent on factors such as system size, energy consumption, location, and the prevailing electricity rates.

Pros of Net Metering

For an average person, solar net metering is a beneficial technological mechanism.

  • Decreases consumption-based electric charges to zero.
  • It’s an incredible asset to provide customers with chances to save themselves financially.
  • Gives benefits to society by providing clean and green electricity, and lessens global warming.
  • Helping hand for the industry sector by reducing the major crisis of load shedding.
  • Assisting the electricity production power sector to balance the increasing demand of energy.

Net Metering News

NEPRA initially considered reducing the net metering tariff for solar system owners. Fortunately, they abandoned this plan, with the Minister of Energy personally confirming that ‘solar net metering rates will remain unchanged.

FAQs

Net metering is a policy that can provide a solution to this problem by enabling individuals and businesses in Pakistan to produce their own electricity using renewable sources such as solar and wind power. Moreover, they can sell any surplus energy generated back to the grid.

The price for a 5kW solar system in Pakistan, inclusive of net metering, falls within the range of 1,150,000 to 1,200,000. This system can generate over 600 units of electricity per month, even without batteries, leading to substantial monthly savings amounting to thousands of rupees.

Conclusion

Net metering billing represents a utility rate mechanism allowing individuals to sell surplus solar energy they generate but don’t use back to the grid. The primary and evident advantage for consumers lies in the fact that, through this approach, they can not only lower their electricity expenses but also assist their utility company in alleviating its workload while promoting clean energy practices and environmental conservation.

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