Solar Panel Price Hike Triggers Policy U-Turn in Pakistan

Federal Minister for Petroleum Awais Leghari has recommended removing licence fees for all solar users with a system capacity of up to 25 kilowatts across the country.

The minister warned that imposing fees on small solar consumers could directly obstruct the policy of promoting and expanding renewable energy in the country.

Power Division has formally approached the National Electric Power Regulatory Authority (PEPRA), requesting the removal of the licence fee condition currently applied to solar system users.

Power Division has raised formal concerns over new solar regulations introduced by Nepra, objecting specifically to the fee and licence requirements imposed on smaller consumers.

The division has proposed restoring the original 2015 solar regulations, which did not impose the additional licence and fee conditions now introduced under the new rules.

The solar industry has also formally rejected the new Nepra regulations, adding private sector opposition to the government’s own internal concerns about the regulatory framework.

Power Division stated that the government is actively working to remove bureaucratic barriers that are currently slowing down solar adoption among consumers throughout the country.

Demand for solar panels has risen sharply as summer temperatures increase across Pakistan, with more households and businesses seeking alternatives to the national electricity grid.

Retailers report that the prices of solar panels and associated equipment have increased significantly, driven by higher import costs and rapidly growing consumer demand in markets.

The direct impact of these price increases is being felt by ordinary consumers, who are finding solar system installation increasingly difficult to afford at current market rates.

Pakistani citizens are increasingly choosing off-grid inverters, hybrid systems, and battery storage solutions rather than grid-connected on-grid solar installations linked to the net metering scheme.

Consumers say that recent government policy changes have made on-grid net metering unattractive, leading many to actively avoid connecting new solar systems to the national grid.

The shift in consumer behaviour reflects growing frustration with regulatory uncertainty and rising costs, pushing more users toward fully independent off-grid energy solutions in Pakistan.

Earlier this week, NEPRA clarified solar licensing rules after reports of misinformation, outlining approval requirements for net billing users and responsibilities of distribution companies.

The regulator stated that off grid solar systems do not require its approval, while systems under 25 kilowatts remain under distribution companies jurisdiction.

NEPRA confirmed that net billing users must obtain approval, while previous regulations required licensing only for systems exceeding 25 kilowatts connected to the national electricity grid.

For on grid solar systems, a one time fee of one thousand rupees per kilowatt is applicable under the existing regulatory framework for approvals.

The authority also stated that no new taxes have been imposed on solar installations despite concerns raised following recent policy discussions and public confusion.

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