Solar industry rejects Nepra’s move to cut tariff for rooftop solar
The solar industry has rejected a move by a power regulator to cut power tariffs for excess electricity generated by rooftop solar power producers under a net metering system and sell it to power distribution companies (Discos).
The power regulator held a public hearing on Tuesday to cut the tariff of electricity through solar sources under a net metering system to sell to
The National Electric Power Regulatory Authority (NEPRA) hinted at a reduction of the power cost for access units generated by rooftop solar power producers from the current Rs19.32/unit to Rs9/unit, which would discourage new entrants into this sector.
Tauseef H. Farooqi, chairman of the National Electric Power Regulatory Authority said that it was not a money-making endeavour.
He stated that this was not done for financial gain, but to minimise personal expenses and increase self-sufficiency.
Moreover, he stated that NEPRA might make a unilateral decision, but it was interested in hearing the opinions of the affected parties regarding the regulation of net metering. In Pakistan, there are 20,700 rooftop solar power generators.
Solar industry stakeholders said that Nepra was discouraging solar projects. The chairman stated that they were not discouraged as the government wanted to add 10,000 MW of renewable capacity.
He said that they were reforming the energy industry and had designated hydropower as a renewable resource. Now, renewables account for 35% of overall energy production.
Notably, on December 20, 2017, the NEPRA issued another SRO 1261 (J)/2017 that increased the period of the agreement between a distributed generator and a Distribution Company (DISCO) from three to seven years.
The Authority may periodically determine the tariff payable by the Distribution Company to the Distributed Generator; provided, however, that the tariff awarded to a Distributed Generator shall remain in effect for the duration of the Agreement/License.” The inability of the authority to alter the tariff was the main complaint raised by the audience.
Rafique Ahmad Shaikh stated that there is no mention of tariff fixing in the rules and that it is only based on the net off of access units. However, one of the NEPRA officials stated that there is mention of tariffs, to which they responded, “Okay, we’ll look into it.” However, we have not yet made a decision on this matter.
In addition, the chairman of NEPRA stated that it is to offset the cost of access units. We believe that access units should cost Rs9 per unit. Additionally, he stated that we have spent nearly Rs1400 billion in capacity costs to IPPs this year, which exceeds the defence budget (of all three forces i.e. Navy, Army, and Airforce). We have a capacity of around 42,000 MW installed.
In addition, he stated that the payback period for your rooftop solar panels is approximately 3,6 years and that the duration decreases as tariffs rise.
