The federal government has decided to end solar net metering and switch to a gross metering system to discourage the use of solar energy and push consumers back to costly grid electricity.
The Ministry of Energy has informed the International Monetary Fund (IMF) that net metering is reducing the revenues of distribution companies (DISCOs).
Under the new gross metering system, consumers will have to sell all the electricity generated by their rooftops to the grid and then purchase back what they need, according to reports.
This move by the government comes as a response to the growing number of households turning to solar energy to avoid expensive grid electricity, which can cost around Rs. 62 per unit with additional charges.
The energy ministry has explained to the IMF that the adoption of solar panels has decreased the demand for grid electricity, leading to increased payments for idle capacity and quarterly tariff adjustments. In the last ten months, solar panels worth 6,800 MW were imported.
The IMF considers payments for idle capacity as a significant contributor to rising electricity costs and has suggested reviewing the policy on captive power generation.
This policy currently allows industrialists to use cheaper gas for their in-house electricity needs. The government may discontinue this captive gas policy next month, compelling industries to rely on more expensive grid electricity.
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