Solar Net Metering Causes Cut in Electricity Rates: Power Firms

Power firms have admitted that solar net metering has led to reducing electricity prices for the consumers on account of fuel adjustment for month of October 2025.

The consumers may enjoy a relief of Rs 0.65 per unit on account of fuel charges adjustment for month of October 2025.

Read More: Discos seek fixed charges on solar net metering

Pakistan’s power sector posted a negative fuel charges adjustment (FCA) of Rs0.65/kWh for October, reflecting lower generation costs against the reference benchmark.

The calculation, shared in the latest NEPRA data, showed an actual fuel cost of Rs8.7177/kWh versus the reference rate of Rs9.3685/kWh.

During the hearing, it was informed in presentation that net-metering supplies rose sharply in October as Pakistan’s power distributors purchased 204.5 GWh from solar consumers.

It eased the fuel charges adjustment (FCA) burden for the month. New NEPRA data showed that these units carried zero fuel cost, reducing the pooled fuel expense for distribution companies.

The latest dataset indicated that total net-metering units procured by DISCOs from July to October reached 573.7 GWh. October recorded the highest monthly uptake so far, driven by strong rooftop solar generation across urban centers.

IESCO led procurement in October with 45.9 GWh, followed by MEPCO at 51 GWh and LESCO at 58.3 GWh. According to NEPRA’s determination notes, net-metered energy directly displaces high-cost thermal generation and lowers the uniform FCA applied to consumers.

LESCO procured a cumulative 134.2 GWh of net-metered units over four months. IESCO followed with 139.7 GWh. MEPCO recorded the largest total procurement at 157.7 GWh.

The lower-than-expected generation cost created a negative FCA of Rs0.6508/kWh. Total units sold during the month were recorded at 9.63 billion kWh, leading to an estimated gross FCA impact of around Rs6.27 billion for the consumers.

The national electric power regulatory authority (Nepra) conducted a public hearing on Thursday to consider reduction in tariff of Rs 0.65 per unit for the consumers.

Nepra also raised question over higher demand of electricity and sudden dip in the electricity demand. The CCP officials said that demand was reduced during the day time whereas it jumped during night time due to use of solar.

 Tanveer Bari representing Karachi business community said that utilization of local coal and RNLG based generation had increased during the period under review whereas the utilization of hydel had decreased.

He said that the power generation from coal and RLNG will increase in upcoming months. It means that electricity price will increase in coming month.

He also raised question over high prices of coal based generation compared to the last month.

CCP official informed that coal based generation had some fixed cost and some variable portion. He said that prices of local based generation are reduced when its utilization increases.

The participants also raised question over utilization of RLNG. Officials said that they were allocated 600 MMCFD RLNG and the entire allocation was used by power plants.

Bari said that Pakistan had become third largest country of solar panel imports. He said that consumers had switched to solar due to higher rates of electricity in the country.

Electricity Generation

Electricity generation from local coal-fired plants reached 1,261 GWh in October 2025, which accounted for 12.76 percent of the total electricity generation at a cost of Rs13.1024 per unit.

In comparison, electricity produced from imported coal stood at 466 GWh at cost of Rs14.3874 per unit. RFO-based plants contributed 48 GWh at a significantly higher cost of Rs32.6908 per unit.

Gas-fired power plants generated 905 GWh accounting for 9.16 percent of overall production—at a rate of Rs13.3635 per unit.

Meanwhile, RLNG-based generation contributed 1,949 GWh, representing 19.72 percent of the power mix at a unit cost of Rs21.0611.

Nuclear power remained the most cost-efficient source which delivered 2,188 GWh (22.13 percent of total generation) at just Rs2.1728 per unit.

Pakistan also imported 43 GWh of electricity from Iran, which amounted Rs22.7572 per unit.

Renewable energy sources contributed as wind plants generated 185 GWh (1.87 percent), bagasse-based units produced 40 GWh (0.40 percent) at Rs10.7409 per kWh, and solar power added 96 GWh (0.97 percent) to the energy mix.