Transition from Net Metering to Net Billing

The National Electric Power Regulatory Authority (NEPRA) has introduced a major regulatory transition by repealing the 2015 Distributed Generation and Net Metering Regulations and notifying the NEPRA (Prosumer) Regulations, 2026 (SRO 251(I)/2026) on February 9, 2026. This framework ends the 1:1 unit-for-unit energy exchange mechanism for new systems, replacing it with a net billing system.

Under net billing, imported grid electricity and exported solar energy are treated as separate financial transactions. Consumers pay standard retail tariffs, ranging from approximately Rs 37 to Rs 55 per kilowatt-hour (kWh), for electricity imported from the grid. In contrast, surplus solar power exported to the grid is repurchased at the National Average Energy Purchase Price (NAEPP), which ranges between Rs 10 and Rs 13 per kWh. The precise buyback rate fluctuates depending on monthly fuel price adjustments and distribution company (DISCO) tariff schedules.

Updated Agreement Conditions and System Capacities

The 2026 regulations introduce several revised technical and operational conditions:

  • Contract Length: Terms for new prosumer contracts are reduced from seven years to five years.
  • Capacity Limits: Solar system capacity is capped at the consumer's sanctioned load, up to a maximum limit of 1 megawatt (MW).
  • Grid Constraints: Systems remain subject to local transformer capacity utilization limits.

Protection for Existing Prosumers

Through amendment SRO 547(I)/2026, issued on April 3, 2026, NEPRA amended Regulation 21(2) to clarify the status of existing solar power users. Prosumers holding valid DISCO agreements executed prior to February 9, 2026, will continue under their legacy 1:1 net-metering billing rates and offset mechanism until their current contracts expire.

However, this protection applies only if the system remains unaltered. Existing prosumers who undertake material physical modifications or expand their system capacity after February 9, 2026, will forfeit their grandfathered status and transition to the new net billing rules.

Recommended Steps for Consumers

Solar prosumers and new applicants should consider taking the following practical steps:

  • Verify Agreement Execution Date: Check your official contract with your DISCO to confirm whether it was executed prior to February 9, 2026.
  • Monitor Monthly Bills: Review electricity bills regularly to ensure unit crediting aligns with your applicable regulatory status.
  • Consult DISCO Before System Modifications: Reach out to your local DISCO prior to modifying or expanding your solar array to prevent losing grandfathered net-metering rates.
  • Check Sanctioned Load Limits: Ensure installed generation capacity does not exceed your sanctioned load allowance.