Nepra abolishes licence requirement, fee for small solar users

The development comes two days after the Power Division, facing severe public criticism for “taxing sunlight”, directed Nepra to abolish the requirements.

Complying with the directive, Nepra issued a notification stating that prosumers’ regulations had been amended and there would be no licencing fee on up to 25kW distributed generation. It said higher capacity prosumers would have to deposit a one-time fee of Rs1,000 per kilowatt.

“This notification shall be applicable and deemed to be effective from February 9, 2026,” the order said.

Earlier in the day, Nepra member Amina Ahmed said the regulator was considering the government’s proposal but could not hold press conference or “leak policy decisions” at public hearings.

Then, within hours, Nepra issued the notification in compliance with the Power Division’s directives.

On Sunday, the Power Division said in a statement it had “formally asked” Nepra to abolish the requirement on the instructions of Power Minister Awais Leghari. It recalled previously alerting Nepra about the negative effects of enforcing the licence and licencing fee requirement, as well as requesting the regulator to align its decision with old regulations.

For his part, Leghari had stated in a post X: “Our government is pro-solar, pro-consumer, and committed to clean energy. We want to remove unnecessary barriers, reduce costs, and provide as much relief as possible to the people of Pakistan.”

Under the previous 2015 regulations, distributed generation facilities of 25kW or below did not require a licence from Nepra. Applications were processed directly by power distribution companies (Discos) without any fee, serving as a major fiscal incentive for residential users.

However, the new Prosumer Regulations centralised the approval authority with Nepra and imposed an application fee even on small users.

The Power Division noted in its Sunday statement that the Private Power and Infrastructure Board (PPIB) had flagged the regulatory shift and requested Nepra to maintain consistency with the earlier approvals regime for systems of 25 kW or below.

Additionally, during public hearings, the Pakistan Solar Association, Primage (Pvt) Ltd, the Pakistan Alternative Energy Association, and Siddiq Renewable Energy (Pvt) Ltd had formally objected to the changes, arguing that removing approval authority from Discos would create unnecessary bureaucratic hurdles.

The Power Division had warned that new approach risked slowing the national drive toward alternative energy adoption.

Over the last few years, Nepra has become a virtual rubber stamp for the requirements of the government, particularly the Power Division.

The Power Division originally made several attempts to shift solar net metering to net-billing to significantly curtail financial benefits to prosumers and backtracked after public criticism.

Then it shifted the responsibility to Nepra, which reduced benefits to prosumers in November last year by even withdrawing many benefits for existing prosumers having valid licences.

As the government faced criticism, Nepra restored the net-metering facility to existing prosumers and introduced new applications for net-billing, and the requirements of a licence from Nepra at a one-time licence fee of Rs1000 per kW in February this year.

As applications started to pour in at Nepra, a social media campaign emerged against the government and the power minister for allegedly fleecing the public for a natural energy resource, thus discouraging solar adoption.

The Power Division had distanced itself from the licence fee for weeks, saying it was Nepra’s domain and outside its powers.