ISLAMABAD: Amid official efforts to tame consumer-oriented penetration of solar energy, Karachi-based industrialists and financial wizards have sought to introduce a not-for-profit “Social Net-Metering Unit Donation Framework (SNUDA) to divert surplus solar generation to the poor and deserving consumers.

The framework originally proposed by business leader and former Karachi Stock Exchange managing director Moin M. Fudda is now being pushed by the Korangi Association of Trade and Industry (Kati). It is believed the proposal would reduce the government’s subsidy burden, ease industrial tariffs from cross-subsidy pressures, and help improve recoveries and reduce system losses for distribution companies across the country.

The proposal has been formally submitted to the National Electric Power Regulatory Authority (Nepra), which may take it up for public and stakeholder comments on Friday (February 6).

The proposal, according to Kati President Muhammad Ikram Rajput, has been developed by Mr Fudda and Kati representative Rehan Javed and envisaged “a voluntary, non-monetary, and regulator-supervised framework that allows net-metering consumers (prosumers) to donate a portion of their surplus electricity units, in kilowatt-hours, to low-income households registered with Not-for-Profit (NPOs) organisation duly certified by Pakistan Centre for Philanthropy (PCP)”. The proposal did not seek any change to existing net-metering rights or settlement mechanisms, but rather presents an optional social extension to the current regime.

Under the proposed framework, surplus units will be donated as “Social Net Metering Units,” credited directly against beneficiary electricity bills through NPOs, without monetisation, tradability, or commercial sale. “The mechanism is designed to be fully auditable, digitally tracked, and transparently reported, with clear safeguards to prevent misuse”, Mr Rajput reported.

Framework allows net-metering consumers to donate surplus energy to low-income households, easing subsidy burden and industry costs

From a system perspective, the proposal offers three key benefits. First, it would help reduce fiscal subsidy burden on the government as “each donated unit replaces electricity that would otherwise require fiscal subsidy support, thereby reducing pressure on the federal budget and minimising the need for future subsidy injections”.

Second, it would ease cross-subsidy pressure on industry, currently estimated at around Rs3-4 per unit. “By lowering the overall subsidy gap in the system, the framework helps reduce recovery pressure through tariffs and adjustments that are disproportionately borne by industrial and commercial consumers”, it said.

Third, it would help improve recoveries and reduce system losses as the targeted unit to be credited at slab-sensitive levels would improve bill affordability for vulnerable consumers, helping reduce arrears, disconnections, and theft-driven losses.

“The proposal is strictly voluntary, limited in scale through defined caps, and supported by a digital platform to ensure transparency, traceability, and regulatory oversight”, Mr Rajput wrote, requesting Nepra to consider its feasibility and introduction “as a pilot-worthy, socially aligned, and fiscally responsible concept, without prejudice to any ongoing regulatory proceedings or tariff determinations”.

Kati said that the country’s electricity sector currently faced high tariffs, rising fiscal subsidies, and growing cross-subsidy pressure on industrial consumers, while rooftop solar adoption under net-metering had resulted in surplus generation settled through financial credits without addressing affordability or social equity.

Explaining the model, Kati suggested that prosumers be given the option to donate surplus units to an NPO on an annual basis through the licensee. “Donations between 10-200 units per billing cycle per donor are proposed to maximise slab-protection impact and affordability”, and should be provided initially to widows and specially challenged low-income households registered with NPOs duly certified by the PCP.

There should be monthly caps, CNIC-linked verification, and a prohibition on self-credit as safeguards to prevent misuse, and a regulator-supervised digital platform should enable donor selection, unit allocation, beneficiary notification, billing integration, and audit reporting. In addition, donated units should be treated as Social Energy Credits, separate from financial net-metering settlement, with no wheeling, transmission, or distribution charges.

The regulator should also monitor, on a monthly basis, the total units donated, the number of beneficiaries supported, and the reconciliation status through the annual audit of institutional donations. “This framework converts surplus rooftop solar generation into a social, fiscal, and system-stabilising instrument without altering net-metering rights or imposing obligations. It aligns social welfare with fiscal discipline and consumer tariff rationalisation”, the Kati advocated for implementation.

Published in Dawn, February 6th, 2026