Pakistan Sets New 2025 Solar Buyback Rate, Balancing Green Energy with Grid Stability

In a major update to its clean energy framework, the Government of Pakistan has finalized the 2025 National Solar Policy, introducing a revised per unit buyback rate for residential and small-scale solar power producers. Effective from August 2025, solar users exporting surplus electricity to the national grid will now be compensated at Rs14.73 per kilowatt-hour (kWh), a reduction from the previous Rs19.32.

The policy adjustment, announced by the Ministry of Energy in coordination with the National Electric Power Regulatory Authority (NEPRA), is being positioned as a necessary step to ensure the long-term financial health of the country’s power distribution system while still encouraging private solar adoption.

Officials noted that while rooftop solar has gained momentum over the past decade, the existing tariff structure was beginning to weigh heavily on power Distribution Companies (DISCOs), many of which are already burdened by circular debt and high transmission losses. “We are not rolling back solar—we’re making it sustainable,” said a senior official involved in drafting the revised framework. “The aim is to promote responsible growth, not reckless subsidies.”

The net metering system, which has been in place since 2015, allows consumers to feed unused electricity generated by solar panels back into the grid. With rising utility prices and worsening power shortages, thousands of households across urban centers like Lahore, Karachi, and Islamabad have invested in solar setups. However, energy planners argue that overly generous buyback rates were becoming unsustainable, especially for consumers not using solar who were indirectly subsidising grid upkeep.

Under the 2025 policy, the government will also introduce measures to simplify installation procedures, offer faster approval timelines, and promote the local manufacturing of solar components. The Ministry of Commerce is reportedly exploring tariff revisions to make importing solar equipment more cost-effective in the short term, until domestic capacity increases.

Energy sector observers have voiced mixed reactions. “The reduced rate may dampen enthusiasm among new users,” said Hammad Jafri, a Lahore-based solar installer. “But if the government backs this with supportive policies like financing tools and reduced duties, the overall momentum can be maintained.”

The shift reflects a centre-right approach to energy reform—prioritising self-reliance, fiscal discipline, and decentralised production without burdening the broader economy.