The government of Pakistan is set to revise net metering rates due the issue of overwhelming capacity charges. Solar power has been widely used in Pakistan now as every household now opts to produce their own powers by housing the panellists on their roof. However, this has turned out to be quite a troublesome situation.
Net Metering rates to be revised
Net metering is a way in which the solar panels in households sell their electricity to the state. This is the electricity that is in excess and is produced by the panels during the day. This is sold to the authorities like WAPDA to meet Pakistan’s growing energy needs. However, citizens are having to pay for much more than they should because capacity payments are rising and rising.
Capacity Charges or Payments
What are capacity payments though? When Pakistan’s energy needs were growing, the government started making power plants all across the country. The power plants were on a cataract with certain investors who would pay for it if there is surety that the endeavour was going to be successful. The officials set out on this contract that they would pay the investors on the basis of the energy produced by the powerplant. The investors agreed to this and set up a lifetime contract with the government officials.
However, a problem arose that even though the power plants set up can produce 100 MW of electricity they’re only producing half or less than half because there is no feasible way to transmit the energy yet. Therefore, even though they are capable of producing more power, they’re unable to do so due to transmission issues. However, despite this, the citizens still have to pay for the charges of electricity they never use because it never reaches them.
In the wake of this issue, Pakistan is already in a debt of Rs 2 trillion on capacity payments. Therefore, the government has decided to revise net metering rates as the citizens are having to pay for electricity they don’t even use. As the economy plummets and our currency drops, those rates continue to increase which has become quite a problem.