June 6, 2024

Pakistan-Saudi Collaboration New 600-MW Solar Plant Approved

Renewable-energy has just gotten a boost, as the Pakistani government announced the approval of a 600-MW solar power plant with Saudi Arabian investors.

This development comes amid rumors that the country’s net metering policy, a key incentive for adopting solar energy, is in danger of being scrapped.

The newly approved 600-MW sensitive solar power plant backed by Saudi investors is a real leap to renewable energy in Pakistan. This project will help the energy mix of the country, de-dependence on fossil fuels and encourage renewable energy.

Pakistan’s new prime minister Shehbaz Sharif has laid down emphasis on completing the project as soon as possible as the country’s energy demand keeps mounting.

Net Metering Speculations

Recent rumors about the possible discontinuation of Pakistan’s policy of net metering – through which individuals using solar panels can sell any excess electricity back to the net – have created a heated debate among solar energy stakeholders. Net metering provides a monetary incentive to generate and utilize solar energy.

But the Power Division insists that it has no plans to put an end to the policy. Following a report in a digital publication that claimed the government planned to amend existing net metering regulations and eventually eliminate it, an official told an English daily that this report was inaccurate.

Awais Leghari, the country’s energy minister, stressed ‘the significance of net metering to the government’s energy policy, debunking news reports that the policy will be abolished’.

Net metering is an essential part of the renewable energy framework of Pakistan,’ he stressed. ‘Incentivizing installation of solar is essential for a green energy future of Pakistan.’

Implications of Ending Net Metering

It fears that - if net metering is ended - its customers will experience Reduced Financial Incentives because the net metering policy provides a financial benefit to solar users via a sale of excess electricity at retail rates.

Without robust financial incentives, installations would likely slow down drastically. Reduced returns from investments in solar – and less capital invested in solar infrastructure – would have consequences for the technological development of renewable energies.

On the other hand, as the proponents point out, the reasons for the termination of net metering could be spreading the costs, maintaining grid stability and enforcing equity so that average consumers’ price does not bear the cost of solar citizens’ benefit.

What are the Net Metering Policy Details?

Under Pakistan’s net metering policy – directed by the National Electric Power Regulatory Authority (NEPRA) – residential, commercial and industrial consumers with solar installations weighing between 1 kW and 1 MW can enjoy the following provisions.

Surplus electricity generated by users of solar panels can earn credits towards offsetting electricity bills, and electricity exported to the grid is credited at the same rate as imported electricity. Exported and imported electricity are measured via bi-directional meters.

Compliance is enforced by the Regulatory Framework (NEPRA) and Credits can be carried over for a year. The state’s position on net metering hasn’t changed, but dialogue about potential policy reform signals continued efforts to balance renewable energy expansion with grid management.

After committing his first major investment with Saudi investors, to build the new solar plant, Sharif has reaffirmed Pakistan’s commitment to bring more renewable energy projects online. the estimated total solar power plant will generate an amount of 600-MW.

Nevertheless, the reaffirmation by the government of a well-established net metering policy shows the central government’s will to encourage the development of solar energy, a goal that is very important in reaching the low-carbon future for the country where heavy dependence on burning fossil fuels causes the biggest carbon emissions.

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