The government’s move to cut solar benefits by 68 percent appears aimed at curbing mounting losses of power distribution companies (DISCOs), the Overseas Investors Chamber of Commerce and Industry (OICCI) said, warning that the revised policy disproportionately impacts urban solar consumers.

Under the updated net billing framework, the solar electricity buyback rate has been reduced to Rs8.13 per unit — a sharp 68 percent decline from previous levels. According to OICCI, this adjustment now forces urban prosumers to export nearly seven units of electricity to offset the cost of importing one unit during peak hours, significantly weakening the financial viability of rooftop solar investments.

The chamber noted that Lahore and Multan together account for more than one-third of Pakistan’s net metering consumers. Despite this concentration, net metering users contribute only 0.32 percent to the total grid energy supply.

OICCI highlighted that the policy shift comes at a time when distribution companies are facing losses exceeding Rs399 billion, with total theft-related losses reaching Rs734 billion. These losses, it said, are primarily driven by systemic inefficiencies, electricity theft, and declining industrial demand — rather than by net metering consumers.

The widening gap between low export credits and high retail import tariffs effectively compels solar households to subsidise structural shortcomings in the power sector, the chamber observed.

To address underlying issues, OICCI urged the government to mandate hybrid battery storage systems to shift peak demand, accelerate the rollout of Advanced Metering Infrastructure (AMI) and Supervisory Control and Data Acquisition (SCADA) systems for real-time monitoring and theft control, and ensure that installed solar capacity is strictly aligned with sanctioned load to protect distribution infrastructure and maintain grid stability.