ISLAMABAD: Facing severe public criticism for “taxing sunlight”, the power division has dire­cted the National Electric Power Regulatory Autho­rity (Nepra) to abolish the requirement of a licence and licence fee for solar prosumers with systems below 25 kilowatts.

In a statement issued on Sunday, a weekly holiday, the power division said that it had “formally asked Nepra to review and abolish the application fee and remove the licence requirement for solar consumers of 25 kilowatts and below” on the directives of Minister Awais Leghari.

The division recalled that it had earlier alerted Nepra about the adverse effects of the decision and requested that it be aligned with previous regulations.

Announcing the decision on X, Mr Leghari said, “Our government is pro-solar, pro-consumer, and committed to clean energy. We want to remove unnecessary barriers, reduce costs, and provide as much relief as possible to the people of Pakistan.”

Backtracks on solar licence for systems under 25kW

Under the earlier 2015 regulations, distributed gen­eration facilities of 25kW or below did not req­uire a licence from Nepra. Applications were processed directly by power distribution companies (Discos) without any fee, serving as a major incentive for residential users.

However, the new Pros­umer Regulations centralised approval authority with Nepra and imposed application fees even on small-scale systems.

The power division noted that the Private Power and Infrastructure Board (PPIB) had flagged the regulatory shift and urged Nepra to maintain consistency with the earlier approval regime for systems of 25kW or below.

During public hearings, industry stakeholders, incl­uding the Pakistan Solar Association, Primage (Pvt) Ltd, the Pakistan Alter­native Energy Asso­ciation, and Siddiq Rene­wable Ene­rgy (Pvt) Ltd, also objected to the chan­ges, arguing that removing approval authority from Discos would create unnecessary bureaucratic hurdles.

Following Mr Leghari’s directive, the power division formally requested Nepra to reinstate the earlier framework for small systems, warning that the current approach risks slowing the country’s transition towards alternative energy.

Over the past few years, Nepra has often been seen as endorsing policy directions set by the government, particularly the power division.

The power division had earlier attempted to shift solar net metering to net-billing, which would have significantly reduced fina­ncial benefits for prosumers, but withdrew the proposal after public backlash.

It subsequently shifted the responsibility to Nepra, which in November last year reduced benefits for prosumers, including some with existing licences.

Amid mounting criticism, Nepra restored net-metering for existing users and introduced new applications under a net-billing regime, along with a one-time licence fee of Rs1,000 per kW in February.

As applications increased, a social media campaign emerged accusing the government of “taxing sunlight” and discouraging solar adoption.

The power division had distanced itself from the licence fee for weeks, saying it was Nepra’s domain and outside its powers.

As pressure mounted, the power minister issued directives for an end to the licence fee and discreetly sought licensing to return to Discos instead of the regulator.

Published in Dawn, April 27th, 2026