What Is Net Metering and How Does It Work?
Net metering lets a solar system owner send unused electricity back to the national grid, where a bi-directional meter tracks both imported and exported units, then adjusts the monthly bill accordingly. Under the original 2015 framework, imported and exported electricity were valued on a strict one-to-one unit basis, so every unit exported directly offset a unit imported at the same rate.
Entity attributes homeowners should know:
- Regulator: NEPRA (National Electric Power Regulatory Authority)
- Meter required: Bi-directional smart meter, sometimes called a green meter
- Connection type required: Three-phase connection only
- Minimum system size: Generally 5kW and above for net metering eligibility
- Inverter requirement: On-grid or hybrid inverter with net metering support; standard off-grid inverters do not qualify
What Changed Under NEPRA's 2025 Prosumer Regulations?
NEPRA introduced the Prosumer Regulations 2025 on December 16, 2025, formally replacing the 2015 net metering framework and shifting the country from net metering to a net billing mechanism for new applicants. Under the old system, one exported unit offset one imported unit at the same retail rate, roughly Rs. 22 to 27 per unit. Under the new net billing model, exported electricity is credited at a separate, NEPRA-determined buyback rate, currently around Rs. 11 to 15 per unit, while imported units are still charged at the full retail rate, which can run Rs. 37 to 55 per unit depending on the slab.
The regulator's stated reasoning is that the old one-to-one model was placing a growing financial burden on distribution companies as solar adoption accelerated, reportedly contributing to an estimated Rs. 101 billion shortfall and pushing a roughly Rs. 0.9 per unit tariff increase onto non-solar consumers. The contract period for new prosumers has also been shortened from 7 years to 5 years under the revised framework.
Do Existing Net Metering Customers Lose Their Old Rate?
No, not automatically. NEPRA has clarified that net metering agreements signed before the 2025/2026 cutoff remain protected under their original terms until the contract expires. Existing consumers continue to be billed under the old one-to-one framework until they either reach the end of their contract term or make a "material modification" to the system, such as adding more panels, which triggers a mandatory transition to the new net billing rates.
Who Is Eligible to Apply for Net Metering in 2026?
Before applying, a property needs to meet several requirements set by NEPRA and the relevant DISCO (distribution company):
- Three-phase connection: Net metering is not available on single-phase meters; single-phase users must upgrade first.
- Sanctioned load: The solar system's capacity cannot exceed the property's sanctioned electrical load. A property wanting a 10kW system but sanctioned for only 5kW must first apply for a load extension.
- Certified equipment: NEPRA only approves inverters and panels carrying IEC, CE, or TUV certification that appear on the official Approved Equipment List.
- Licensed installer: Installation must be performed by a company registered with the Alternative Energy Development Board (AEDB) or the relevant DISCO as an active installer.
What Does the Net Metering Application Process Look Like?
- Technical survey and Single Line Diagram: The installer conducts a site survey and produces a Single Line Diagram (SLD) documenting the system design.
- Application submission: The application is filed with the relevant DISCO, a process that has been substantially digitized to reduce processing delays.
- Approval and meter installation: Once approved, the DISCO installs the bi-directional smart meter that replaces the standard analog meter.
- System commissioning: The solar system is connected to the grid and begins operating under net metering or net billing terms, depending on when the agreement was signed.
Is Solar Still Worth It Under the New Net Billing Rules?
Yes, though the ideal system design has changed. Because exported units are now credited at a lower buyback rate than the retail import rate, oversizing a system purely to export surplus for profit is no longer the best strategy. Even accounting for this shift, the payback period for a well-designed residential system in Pakistan remains roughly 3.5 to 4.5 years given continually rising grid tariffs.
The better approach under net billing is to size the system closer to actual daytime consumption and pair it with battery storage rather than exporting everything to the grid. Storing cheap solar energy in a lithium battery for use during expensive evening peak hours, typically 6 PM to 10 PM, generally saves more money than exporting that same energy at the lower buyback rate.
Net Metering vs Net Billing: A Side by Side Comparison
| Factor | Old Net Metering (pre-2025) | New Net Billing (2025/2026) |
|---|---|---|
| Export credit rate | Same as retail rate (~Rs. 22-27/unit) | NEPRA buyback rate (~Rs. 11-15/unit) |
| Import charge rate | Full retail rate | Full retail rate (unchanged) |
| Contract length | 7 years | 5 years |
| Oversizing strategy | Financially attractive | No longer optimal |
| Battery storage value | Secondary benefit | Primary strategy for savings |
| Existing contracts | Grandfathered until expiry | N/A for new applicants |
How Should a System Be Sized Under the New Rules?
The right approach starts with the property's actual load profile rather than just the monthly bill total, since a home running air conditioning through the day has very different optimal sizing than one where consumption peaks at night. For daytime heavy loads, a system sized close to consumption maximizes self-use of solar power. For evening heavy loads, pairing a smaller solar array with a hybrid inverter and battery storage captures value that would otherwise be exported at the lower buyback rate.
How Solar Solution Pakistan Handles Net Metering for Clients
Solar Solution Pakistan manages the complete net metering documentation and DISCO approval process on behalf of clients, from the technical survey through to final grid connection, which removes the administrative burden from what is otherwise a multi-step regulatory process. Homeowners and businesses evaluating whether net metering still makes sense for their property can review the net metering service page for details on documentation handled, and pair this with the solar system design service to size a system correctly for the new net billing rules rather than defaulting to an oversized legacy design.
For properties where evening consumption is high, it's worth reviewing hybrid inverter and battery options alongside the net metering application, since the inverter and battery combination now plays a bigger role in overall payback than it did under the old one-to-one framework. Businesses considering larger installations can also look at commercial solar solutions, which are sized and financed differently from residential systems. Financing options for the upfront cost are outlined on the solar bank financing page.