Here’s How NEPRA’s New Gross Metering Will Work for Solar Users

In a major policy shift, the National Electric Power Regulatory Authority (Nepra) has proposed replacing the existing net metering regime with a gross metering mechanism for new rooftop solar consumers, citing the growing financial and operational burden on conventional grid users. Under the proposed Nepra Prosumer Regulations (NPR), an 18-page draft document uploaded to the regulator’s website, future domestic solar consumers will be required to trade electricity with their respective distribution companies (Discos) under a gross metering framework rather than net metering. However, existing net metering consumers holding valid seven-year agreements will continue to sell surplus electricity to the grid at the current buyback rate of Rs. 22 per unit until the expiry of their contracts. For new solar installations, electricity exports will be compensated at a proposed feed-in tariff of Rs. 11.30 per unit under gross metering. These contracts will be valid for five years, with the possibility of extension on a mutually agreed basis. Nepra has invited feedback from stakeholders and consumers within 30 days and may also hold a public hearing before finalising the regulations. The proposed changes follow concerns that the current net metering regime is imposing an estimated financial burden of up to Rs. 2 per unit on non-solar grid consumers. During a meeting on October 22, Prime Minister Shehbaz Sharif directed the Power Division and Nepra to review the buyback tariff and assess its broader impact before finalising any reforms. Under the existing net metering system, electricity exported to the grid is adjusted against electricity imported, reducing consumers’ power bills. In contrast, gross metering compensates consumers at a fixed tariff for all electricity exported, while electricity drawn from the grid is billed separately at prevailing retail rates. According to official data, the rapid expansion of rooftop solar led to a decline of 3.2 billion units in grid electricity sales during FY2024, resulting in revenue losses of nearly Rs. 101 billion for distribution companies. These losses contributed to an average tariff increase of Rs. 0.9 per kilowatt-hour for other consumers. Power Division projections warn that by FY2034, lost grid sales could rise to 18.8 billion units, translating into a financial impact of Rs. 545 billion and a potential tariff increase of Rs. 5-6 per unit. An energy official said the grid is effectively being used as battery storage for solar consumers, who sell surplus power at high buyback rates while avoiding fixed system charges. Officials argue that the disparity is increasingly evident, as new utility-scale solar projects are being contracted at tariffs below Rs. 10 per unit, making the existing Rs. 22 per unit net metering buyback rate unsustainable. The proposed gross metering tariff of Rs. 11.30 per unit is intended to limit further tariff escalation for grid-connected consumers. The rapid growth of net-metered solar capacity, now estimated at around 6,000 megawatts nationwide, has also raised concerns over grid stability. During winter, electricity demand often drops to 8,000-9,000 megawatts, increasing the risk of excess daytime generation. Energy planners have warned that unchecked solar expansion could threaten grid stability, citing Sri Lanka’s experience, where a sudden surge in solar generation reportedly contributed to a nationwide blackout. Authorities have also identified instances of misuse, including consumers with sanctioned loads of 10 kilowatts exporting up to 20 kilowatts to the grid. To address these issues, distribution companies have begun installing smart meters capable of real-time monitoring and controlling electricity exports.