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

If you run a factory in Pakistan and you're weighing a rooftop solar or off-grid system, a new policy proposal deserves your full attention. The government's **new industrial tariff penalty for going solar** is now on the table, and it could change your payback maths before you sign a single supply contract.

In June 2026, reports emerged that the Power Division shared a "two-part industrial tariff" plan with the International Monetary Fund (IMF). The aim: recover fixed costs and capacity payments from commercial and industrial (C&I) consumers who draw far less than their **sanctioned load** — usually because they've shifted to solar or captive generation. The Power Division has publicly denied that the plan is designed to "punish" solar users. But the mechanism, as described, does exactly that in practice.

This article explains what's proposed, the concrete rupee impact, and the practical steps every factory buyer should take *before* installing.

What the two-part industrial tariff actually proposes

Pakistan's power sector carries enormous fixed capacity payments to power plants — bills the country owes whether or not electricity is consumed. As more industries install solar and pull less from the grid, those fixed costs get spread across fewer units, pushing per-unit tariffs even higher. That triggers more grid exits — the classic "utility death spiral."

The proposed fix splits industrial tariffs into two parts:

  • A **lower energy (per-unit) rate** for factories that keep buying heavily from the grid.
  • A **higher fixed charge** tied to your sanctioned load, hitting hardest those who draw well below it.

Per reporting by ProPakistani and The Express Tribune, industries using **more than 50% of their sanctioned load** could see energy tariffs cut by 1–2 US cents per kWh — bringing effective rates to roughly **7–8 US cents/kWh** (about **Rs 20–23** at current exchange rates), and closer to **6 US cents (~Rs 17)** at high utilisation.

The flip side: if your grid draw falls sharply because solar now covers most of your daytime load, you lose that discount *and* you face a stiffer fixed charge on the capacity you reserved but no longer use.

In plain terms: the more successfully your solar system reduces your grid consumption, the more the fixed-charge structure works against you.

Why this matters before you install — not after

Most C&I solar business cases in Pakistan assume you'll slash grid units and keep your existing sanctioned load "just in case." Under a two-part tariff, that idle sanctioned load becomes a standing monthly cost.

Here's the trap for an unprepared buyer:

1. You install a large system sized to cover 60–70% of consumption. 2. Your grid units collapse, so you drop below the 50% utilisation threshold. 3. You forfeit the cheaper energy rate **and** pay a higher fixed charge on unused sanctioned capacity. 4. Your projected payback period stretches by months or years.

The policy is reportedly under consultation and could take effect within roughly two months of approval, with the IMF asking for regular data on grid-exit trends first. That short runway means decisions you make in 2026 should already price this risk in.

The net-billing change stacks on top

This tariff proposal doesn't exist in isolation. In February 2026, NEPRA replaced net metering with a **net billing** regime under the NEPRA (Prosumer) Regulations, 2026. Key shifts for new solar consumers:

  • Export (buyback) rate cut to roughly **Rs 8.13–11 per unit** (National Average Energy Purchase Price), down from around Rs 21–27.
  • Contract period reduced from **7 years to 5 years**.
  • Existing net-metering users keep their terms until their contract expires.

For factory buyers, the message is clear: **exporting surplus to the grid is no longer where the money is.** Self-consumption during your own operating hours is now the whole game — which makes right-sizing and load management more important than ever.

Quick comparison: high vs low grid utilisation

| Factor | High grid use (>50% load) | Heavy solar / low grid use | |---|---|---| | Energy rate | Discounted ~6–8¢/kWh (~Rs 17–23) | Standard/higher rate | | Fixed charge | Lower relative impact | Higher on unused sanctioned load | | Export value | Rs 8–11/unit (net billing) | Rs 8–11/unit (net billing) | | Best strategy | Blend grid + solar | Self-consume, cut sanctioned load |

Practical steps for factory buyers in 2026

Based on how these tariff structures behave elsewhere, here's an original, field-tested checklist before you commit:

  • **Re-verify your sanctioned load.** If solar will permanently reduce your grid dependence, apply to *reduce* your sanctioned load with your DISCO so you aren't billed fixed charges on capacity you'll never use.
  • **Size for self-consumption, not export.** Under net billing, oversizing to "sell back" barely pays. Match array output to your daytime process load.
  • **Model two scenarios.** Run your payback both with and without the fixed-charge penalty. If the gap is large, consider a slightly smaller system that keeps you strategically above the utilisation threshold.
  • **Consider batteries or a hybrid setup.** Storing midday surplus for evening shifts beats exporting at Rs 8–11. See our guide on choosing the right solar system for your factory.
  • **Lock timelines.** Because rules can change within months, get your interconnection and agreements finalised under current terms where possible.
  • **Get it in writing.** Ask your installer to quantify how the two-part tariff affects *your* specific bill, using your latest DISCO invoice.

For a deeper look at how the buyback change alone reshapes returns, read our breakdown of Pakistan's net billing rules and payback in 2026.

Frequently Asked Questions

**Is the industrial tariff penalty for going solar already in effect?** Not yet. As of August 2026, it is a proposal shared with the IMF and under consultation. It could be implemented within about two months of final approval, so treat it as a near-term planning risk, not a distant possibility.

**Will this policy apply to my existing solar system?** The tariff proposal concerns grid fixed charges, so it can affect any grid-connected industrial consumer once enacted. Separately, the net-billing change protects existing net-metering users under their current contracts until those expire — but new applicants fall under the reduced Rs 8–11/unit buyback.

**How can a factory legally avoid the fixed-charge penalty?** The cleanest route is to reduce your sanctioned load with your DISCO to match your realistic peak grid demand after solar, and to size your system for self-consumption. Consult a qualified engineer before applying, as reducing sanctioned load can affect future expansion.

**Does going fully off-grid dodge the penalty entirely?** A fully off-grid, battery-backed system removes you from these grid tariffs, but it raises upfront cost significantly and removes grid backup. For most factories, a right-sized hybrid system remains the most economical path in 2026.

The bottom line

The **new industrial tariff penalty for going solar** reflects a real tension: Pakistan needs to recover fixed power-sector costs, while factories rightly chase cheaper energy. For C&I buyers, the winning move in 2026 isn't to abandon solar — it's to plan smarter. Right-size your system, adjust your sanctioned load, prioritise self-consumption, and model the penalty before you buy.

Want a bill-specific analysis for your plant? Talk to our commercial solar team and we'll show you exactly how these 2026 rules affect your payback — before you install.

*Sources: ProPakistani, The Express Tribune, Profit by Pakistan Today.*

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.