The Headline Numbers
A new knowledge brief from the Pakistan Institute of Development Economics (PIDE) puts hard numbers on the policy shift from net metering to net billing — and its central message is sobering. The study, titled “From Net Metering to Net Billing: Tariff Design and Distribution-Sector Stress in Pakistan” and authored by Research Economist Dr Rubina Ilyas and Staff Economist Bilal Aftab, finds that net billing will cut distribution companies’ revenue exposure from rooftop solar exports by nearly Rs 31 billion — but will not fix the underlying sickness of the DISCOs.
According to the brief, net-metered electricity exports reached 1,997.33 GWh in FY2024-25. Under the old net metering regime, those exports were credited at around Rs 25–26 per unit — close to retail tariff rates — creating a revenue exposure of Rs 52.93 billion for distribution companies. Under net billing, where exported units are bought at the national average energy purchase price of roughly Rs 10–11 per unit, that exposure falls to Rs 21.97 billion.
What Net Billing Changed — and Why
In February 2026, NEPRA replaced the one-for-one net metering arrangement with net billing for new prosumers. Households still buy grid electricity at the full applicable tariff, but electricity they send back to the grid is credited separately at the much lower energy purchase price. As we reported yesterday, industry groups have warned that proposed tweaks to buyback rates could cut solar savings dramatically — and PIDE’s figures explain exactly why export compensation matters so much.
The brief estimates that a typical 10 kW residential solar system previously paid back in around four to five years, depending on consumption patterns. Under net billing, the payback stretches to seven to nine years for import-reliant systems, assuming 60% self-consumption and an export rate of Rs 11 per unit. When the spread between what you pay per unit and what you are paid per unit widens to four or five times, the rational consumer response is not to abandon solar — it is to stop exporting altogether.
A Stress Index for the DISCOs
The study’s most original contribution is a composite DISCO Stress Index combining transmission and distribution losses, net-metering penetration and recovery performance. Its headline finding: financial stress is concentrated in the weakest utilities, not necessarily in the ones with the most solar.
| DISCO | Stress index | Reading |
|---|---|---|
| QESCO (Quetta) | 2.21 | Most stressed |
| HESCO (Hyderabad) | 1.52 | High stress |
| SEPCO (Sukkur) | 1.42 | High stress |
| PESCO (Peshawar) | 1.31 | Elevated stress |
| LESCO (Lahore) | 1.17 | Lower stress despite most solar |
Remarkably, LESCO — which recorded the highest net exports at 840.34 GWh — has a stress index of only 1.17. The brief concludes that rooftop solar penetration alone does not explain financial distress. The main drivers remain energy losses, electricity theft, poor recoveries, deferred investment and tariff distortions. Rooftop solar may amplify existing weaknesses in some utilities, but it is not the primary cause of their difficulties.
Even modest net-metering penetration of 2–3% of DISCO sales can increase financial pressure on utilities already struggling with high losses and weak recoveries, the authors note. The brief also calculates that net metering mechanically increased per-unit capacity charges by Rs 0.1–0.5 per kWh — a small but real addition to tariff pressure in an already fragile distribution system. That stress, of course, sits inside the wider Rs 1,675 billion circular debt crisis facing the power sector.
The Battery Effect: Net Billing May Push Consumers Behind the Meter
One of the brief’s most consequential observations is behavioural. Lower export compensation encourages solar users to invest in batteries and hybrid systems to maximise self-consumption rather than exporting surplus to the grid. While this reduces immediate export-credit pressure on DISCOs, it may also cut future grid sales from higher-income consumers — exactly the customers whose bills carry the system’s fixed costs.
This is already visible in import data: Pakistan’s battery imports surged as households pair storage with rooftop solar to ride out evenings and load-shedding. Readers weighing that move should compare our lithium vs tubular battery guide before buying. And for those still connecting to the grid, our step-by-step walkthrough of applying for a green meter with LESCO and IESCO remains the fastest path to legal export.
Under net billing, net-metered capacity has already crossed 5 GW, and total distributed solar is considerably higher once off-grid and behind-the-meter systems are counted. With retail tariffs reaching Rs 35–40 per unit in many urban slabs, rooftop solar remains an attractive hedge — the economics simply shift from exporting to self-consuming.
What PIDE Recommends
The brief does not celebrate net billing as a cure. Its recommendations read as a to-do list for the whole power sector:
- Cut DISCO losses and close recovery gaps alongside solar-sector reforms — repricing exports alone cannot fix utilities that lose power and money.
- Implement net billing through a transparent, predictable export-pricing framework so investors can plan around a known export rate.
- Integrate rooftop solar expansion with feeder-level planning, network upgrades and preparation for battery-based hybrid systems.
The central conclusion: while net billing may provide short-term financial relief worth roughly Rs 31 billion in reduced revenue exposure, Pakistan’s distribution-sector stress will persist unless losses, recoveries, governance shortcomings and fixed-cost recovery challenges are addressed.
What This Means for Solar Households
For a family considering solar in late 2026, PIDE’s brief reinforces three practical lessons. First, size your system for your own daytime consumption, because exports now earn a fraction of what imports cost. Second, seriously evaluate a battery: under net billing, stored sunshine you use yourself is worth Rs 35–40 per unit, while exported sunshine earns roughly Rs 10–11. Third, buy from the top of the market — our top 10 solar panels in Pakistan for 2026 comparison shows which modules deliver the most kilowatt-hours per rupee over their warranty life.
Follow our Solar News section for continuing coverage of NEPRA policy, net billing and the economics of going solar.
If tighter net billing terms push you behind the meter, a zero-export setup is the alternative worth understanding — see how zero-export solar works, its controls and its limitations: zero-export solar explained
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