• By Best Solar Company PK
  • 12 Aug, 2026
  • Solar Policy
  • 8 min read

When NEPRA replaced net metering with **net billing** on 9 February 2026, most Pakistani homeowners focused on one number: the buyback rate crashing from around Rs25–27 per unit to roughly Rs11. But the real story sits underneath that headline. **Net billing in Pakistan** is not just a lower export price — it is a quiet transfer of the power sector's biggest structural costs onto the people who invested their own money to generate clean electricity.

This article breaks down how independent power producer (IPP) capacity payments and unaddressed distribution losses are being folded into the tariffs you pay, why that lengthens your solar payback, and what you can practically do about it in 2026.

What actually changed under net billing

Under the old 2015 net-metering regime, your exported units were "banked" and netted against imported units at nearly the same retail rate. It was effectively a one-to-one swap.

Net billing ends that swap. Now two separate prices apply:

  • **You sell surplus** to the grid at the National Average Power Purchase Price — currently around Rs10–11 per unit.
  • **You buy from the grid** at your normal retail tariff — roughly Rs40–50 per unit including all surcharges.

On top of this, NEPRA introduced a **Rs1,000 per kW** charge and made licensing mandatory for all system sizes. Consumers who held valid net-metering agreements before 9 February 2026 are grandfathered on their old terms until those agreements expire — everyone applying after that date lives under the new rules.

The gap between what you sell for (Rs11) and what you buy back for (Rs45) is not a market signal. It is where the grid's fixed costs get recovered — and increasingly, that means capacity payments.

The capacity-payment problem, in plain figures

A "capacity payment" is a fixed charge Pakistan pays IPPs simply for being available to generate — whether or not their electricity is actually used. These were negotiated under "take-or-pay" contracts, many dollar-indexed.

The scale is staggering:

  • Capacity charges are projected near **Rs1.7 trillion for 2026**, equivalent to roughly **Rs17 per unit** of the tariff.
  • Over the last five years, consumers paid about **Rs13.4 trillion to IPPs** — including plants that generated little or no electricity.
  • Power-sector **circular debt stood at Rs1.84 trillion** in February 2026.

Here is the core injustice for solar owners: because your retail tariff bundles this ~Rs17/unit capacity cost, but your export is paid only the ~Rs11/unit fuel-based average price, you are billed for capacity when you draw power yet paid nothing toward it when you supply power. The fixed cost only flows one way — toward you.

Meanwhile, DISCO losses go unaddressed

If the state genuinely wanted to protect the grid, the first target would be distribution-company (DISCO) inefficiency, not rooftop solar. The numbers make that obvious.

According to NEPRA's own FY2024-25 reporting:

  • Average **transmission & distribution (T&D) losses hit 17.55%**, far above the allowed benchmark of 11.43%.
  • Excess T&D losses cost about **Rs265 billion** in a single year.
  • A recovery rate of just **96.62%** (against 100% allowed) created a **Rs132 billion** shortfall from unpaid and stolen electricity.

That is nearly **Rs400 billion** of avoidable loss in one year — theft, ageing lines, and poor bill recovery — none of which a solar prosumer causes. Yet net billing effectively asks disciplined, bill-paying solar households to help plug a hole dug by loss-making DISCOs and idle IPP contracts.

What the cost-shift does to your payback

Let's put real numbers on a typical 10 kW residential system in Punjab.

| Factor | Old net metering | New net billing (2026) | |---|---|---| | Export/buyback rate | ~Rs25–27/unit | ~Rs10–11/unit | | Import/retail rate | ~Rs40–50/unit | ~Rs40–50/unit | | Value of a self-consumed unit | ~Rs45 | ~Rs45 | | Value of an exported unit | ~Rs26 | ~Rs11 | | Typical payback period | 3–4 years | 5–7+ years |

The lesson is stark and simple: **every exported unit is now worth roughly 55–60% less**, while every unit you consume in your own home is still worth the full retail rate you avoid paying. Systems designed to "sell to the grid" now barely break even on exports. Systems designed to **self-consume** still deliver excellent returns.

For a deeper walk-through of the maths, see our solar payback calculator for 2026 and our guide to choosing the right system size.

How smart Pakistani homeowners are responding

The policy is unfair, but it is not a reason to abandon solar — it is a reason to design differently. In our own installations across Lahore, Karachi and Islamabad, the households doing best under net billing share three habits:

  • **Right-size, don't oversize.** Match panel capacity to daytime consumption instead of building a large export surplus that now earns only Rs11/unit.
  • **Add battery storage.** A hybrid inverter with lithium storage lets you use your own evening power (worth ~Rs45) instead of exporting it cheaply and re-buying it dear. Battery prices in 2026 have fallen enough to make this the single biggest payback lever.
  • **Shift heavy loads to daytime.** Run air conditioners, washing machines, water pumps and EV charging while the sun is up. Every self-consumed unit dodges the full retail tariff — the capacity charge included.

This is the practical, first-hand insight most sellers skip: under net billing, **your inverter's job changes from "sell to the grid" to "avoid buying from the grid."** Optimise for self-consumption and your payback can still land in the 4–5 year range.

The bigger picture for solar policy

Rooftop solar in Pakistan is not the cause of high tariffs — it is a symptom of them. Families didn't install panels to profit; they installed them to escape Rs50/unit bills. Punishing that response while leaving Rs1.7 trillion in capacity payments and Rs400 billion in DISCO losses untouched treats the symptom and protects the disease.

For homeowners, the takeaway is clear-eyed rather than gloomy: solar still saves you money, but the savings now come from what you keep, not what you sell. Read more on the long-term case for going solar despite policy changes.

Frequently Asked Questions

**Is solar still worth it in Pakistan under net billing?** Yes — for self-consumption. Because retail electricity still costs Rs40–50 per unit, every unit you generate and use yourself delivers full savings. Payback lengthens mainly for systems that rely on exporting surplus at the new ~Rs11 rate. Pairing solar with storage keeps returns strong.

**Why are IPP capacity payments my problem as a solar owner?** Capacity payments (about Rs17/unit) are baked into the retail tariff you pay when importing power, but they are excluded from the ~Rs11/unit you receive when exporting. So you contribute to these fixed costs as a buyer while getting no credit for them as a seller — the cost-shift only moves in one direction.

**Will my old net-metering agreement change?** No. If you held a valid net-metering agreement before 9 February 2026, you keep your original terms and buyback rate until that agreement expires. Only new applicants fall fully under net billing.

**What's the single best way to protect my payback now?** Add battery storage and shift heavy appliances to daytime. Using your own generation instead of exporting it cheaply and re-buying it at retail is the most effective response to the net-billing cost-shift in 2026.

The bottom line

Net billing in Pakistan didn't just cut your buyback rate — it quietly enrolled solar owners in paying down IPP capacity payments and DISCO inefficiencies they never created. The policy is flawed, but your strategy doesn't have to be. Design for self-consumption, add storage, and solar remains one of the smartest investments a Pakistani household can make.

Want a system sized for maximum savings under the 2026 rules? Get a free net-billing-optimised solar quote from Best Solar Company PK and we'll model your real payback before you spend a rupee.

Best Solar Company PK designs and installs reliable solar systems in Rawalpindi, Islamabad, Lahore, Multan, Taunsa Sharif and Karachi. Contact us for a free survey and the best advice for your home or business.