LAHORE: Various organisations and civil society groups working for the growth of renewable energy in the country’s energy mix have expressed grave concerns over the draft Prosumer Regulations 2025, terming it an attempt to undermine the national commitments on clean energy.
They also claimed the draft to be a plan to protect government revenue streams rather than serving all grid consumers, with the risk of slowing solar adoption instead of addressing structural inefficiencies.
Through letters separately written by the Alliance for Climate Justice and Clean Energy (ACJCE), Pakistan Renewable Energy Coalition (PREC) and others to the National Electric Power Regulatory Authority (Nepra), they called for conducting detailed studies about solar power generation, net-metering and its benefits in comparison to the costly power plants, capacity payments and financial burden on the public exchequer.
According to a letter written by ACJCE, the draft Prosumer Regulations 2025 had adopted a piecemeal, partial, and ultimately counterproductive approach to the regulatory reforms required for a just energy transition. Rather than modernising country’s grid and regulatory framework to enable and integrate peer-to-peer (P2P), business-to-business (B2B), solar-sharing, aggregation, and storage-integrated models, the proposed regulations risk entrenching centralised utility control at the expense of least-cost, efficient, and socially inclusive distributed energy solutions.
In particular, it said the regulation would introduce new tariff and non-tariff barriers for distributed solar, shift effective regulatory authority from Nepra to commercial Discos, foreclose viable pathways for distributed trading and aggregation and risk locking Pakistan into a high-cost and monopoly-controlled transition. It said that this risk would be further amplified by Disco’s privatisation.
The alliance said that the draft had failed to propose any meaningful structural reforms to dismantle legacy constraints and entrenched hydropower and fossil-fuel interests, which were the primary drivers of high grid costs. Moreover, it has also failed to provide a meaningful regulatory framework and policy for maximizing the potential benefits of solar and integrating it for a successful and just energy transition.
“The draft regulations do not modernise distributed solar and net metering; it re-centralises control, suppresses innovation, and raises system costs, while transferring regulatory power to entities with direct commercial conflicts. They further disincentive the emergence of least-cost P2P and B2B trading, solar sharing, and aggregation, precisely when Pakistan’s energy crisis demands flexibility, decentralisation, and citizen-led investment,” it explained.
The alliance urged Nepra to immediately withdraw the draft regulations in its present form, undertake a more comprehensive policy for expanding and integrating distributed solar as a least cost and equitable energy source, restore Nepra’s direct regulatory role over distributed generation and explicitly enable service territory based microgrids, P2P, B2B, aggregation, and storage-integrated models. It also sought reducing grid costs by addressing the true drivers of high tariffs – namely costly over-capacity and legacy contracts. Furthermore, it demanded to conduct empirical studies and trade-off analysis investigating other competing pathways of reducing grid costs such as displacement of legacy fossil fuel plants and large hydro capacity commitments and align power regulation with climate, trade, and equity objectives rather than narrow utility revenue protection.
“Through this draft policy on which a public hearing is set to be held by Nepra on February 6, the government wants to kill renewable energy,” deplored Zain Moulvi, a member of ACJCE while talking to Dawn. He was of the view that the government’s approach towards net metering was not correct. “The government should promote solar energy instead of stopping those from using this cheap and clean energy,” he said.
In another letter to Nepra, the Pakistan Renewable Energy Coalition (PREC), working for the implementation of goals set within the Alternative and Renewable Energy Policy 2019, Paris Climate Agreement and updated Nationally Determined Contributions (NDCs) of Pakistan submitted in 2025, said that net metering had been Pakistan’s primary distributed generation policy instrument since 2015. The PREC, a coalition of seven organisations including Institute for Development Studies and Practices, Center for Peace and Development Initiative and Alternate Development Services, revealed that the regulation 14(3) permitted Nepra to unilaterally convert existing net-metering agreements to net-billing mid-contract, directly undermining the investment terms under which prosumers committed capital.
“Allowing export rates to be revised during the agreement term destroys pricing certainty, the fundamental requirement for household and SME investment decisions financed through savings or loans. The regulations must include a non-retroactivity clause protecting all current and pending contracts for their full duration. Without this, the framework creates regulatory risk that will either halt new installations or accelerate off-grid defection by creditworthy consumers, concentrating cost recovery on remaining users and triggering utility death spiral dynamics. The regulations provide no long-term policy roadmap, replacing a stable 10-year framework with immediate barriers: reduced license periods, suppressed buyback rates, and no transition pathway. This violates the predictability requirement central to ARE Policy 2019 and NDC 3.0 commitments,” the coalition explained.
According to the Policy Research Institute for Equitable Development, the proposed net billing regime — especially one with flat export pricing, restrictive sizing caps, etc— risks pushing consumers into greater self-consumption, accelerating behind-the-meter behaviour, and even accelerating grid defections. This outcome could deepen underutilisation and make fixed-cost recovery harder, not easier. It recommended a clear separation of capacity, energy, and network charges so fixed system costs were recovered transparently and fairly. It further recommended implementing time-differentiated export rates (or TOU structures) that reflected when exports were actually valuable to the system and careful integration of sizing rules with future electrification goals, so households could plan for evolving loads.
Published in Dawn, February 2nd, 2026
