The National Electric Power Regulatory Authority (NEPRA) on Tuesday hinted at lowering the power tariff for the excess units generated by rooftop solar power producers from the current Rs 19.32 per unit to Rs 9 per unit as part of the government’s plan to promote solar energy, a move that is likely to deter new entrants in the market.
The government intends to expand the national grid by 10,000 MW by encouraging and rewarding residential solar power projects. In light of this, the power regulator has taken action to lower the prices for electricity produced by rooftop solar. The solar sector, however, has resisted this measure.
NEPRA has also started a move to lower tariffs for rooftop solar power producers to sell their excess electricity to power distribution firms.
The regulator held a public hearing, and the solar energy sector fiercely resisted a move to lower pricing. They claimed it would deter people from installing rooftop solar panels. In Pakistan, there are a total of 20,700 rooftop solar power generators.
“We wanted to avoid creating another IPP” (Independent Power Producer). While chairing?over a public hearing on the proposed amendment to the National Electric Power Regulatory Authority (Alternative and Renewable Energy) Distributed Generation and Net Metering Regulations, 2015, NEPRA Chairman Tauseef Farooqi made it clear that this was not intended to be a profitable endeavor.
Farooqi continued, “NEPRA might have made a choice unilaterally, but chose to invite the stakeholders to learn their perspective.
The head of NEPRA also threatened legal action against solar power industry players who spoke out against the pricing drop during the session.
The NEPRA chairman said, “We are not discouraging but are building a renewable capacity of 10,000 MW when it is said that the power regulator is discouraging the solar industry. Hydropower has been identified as a renewable energy source as part of our modernization of the energy industry. The share of renewable energy in overall energy generation is at 35%.
It should be mentioned that on December 20, 2017, NEPRA issued another SRO 1261 (J)/2017, bringing the first changes to existing regulations by extending the period of the contract between the Distributed Generator and Distribution Company (DISCO) from three to seven years.
The Authority may periodically establish the tariff payable by the Distribution Company to the Distributed Generator; provided, however, that the tariff once given to a Distributed Generator shall be valid for the length of the Agreement/License. This is an interesting change to Regulation 14.
The “decrease in power tariff is for netting off the cost of extra units,” Farooqi continued. For extra units, we believe Rs 9 per unit should be charged. We have paid IPPs approximately Rs. 1,400 billion this year, which is more than the total budget of the three forces. We have about 42,000 MWs of installed capacity altogether.