Pakistan’s rooftop solar capacity has expanded nearly 37-fold over the past six years, reaching almost 7,000 megawatts by June 2026, prompting the government to replace the country’s net metering regime with a new net billing system to address mounting financial and technical pressures in the power sector.

Speaking at a SAARC webinar, Energy Adviser to the Power Division Syed Faizan Ali said solar generation under Pakistan’s net metering framework rose from just 190MW in FY2020 to around 6,978MW by FY2026.

He said the sharp expansion was driven mainly by rising electricity prices, the depreciation of the Pakistani rupee and a steep decline in global solar panel prices.

According to the presentation, the rupee depreciated by about 75 percent between FY2021 and FY2025, electricity tariffs increased by nearly 140 percent, and imported solar panel prices fell by around 60 percent over the same period. These trends significantly improved the economics of rooftop solar and triggered record installations across the country.

However, officials said the one-to-one credit mechanism under the old net metering system placed growing strain on the electricity sector. They estimated the policy had a Rs101 billion revenue impact in FY2024, leading policymakers to introduce the Prosumer Regulations 2026, which came into effect on February 8, 2026.

Under the new net billing system, new rooftop solar consumers will receive a lower reference price for electricity exported to the grid, while electricity imported from the grid will continue to be billed at the applicable retail tariff. Existing consumers who signed net metering agreements under the 2015 regulations will continue to receive their agreed benefits until their contracts expire.

Officials said the challenge ahead will be to balance incentives for rooftop solar with the need to protect the financial health of the power sector and limit the burden on consumers without solar systems.