Business
Cuts in solar power benefits on the cards
ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has decided to hold a public hearing on proposals to curtail benefits for solar net-metering consumers — known as prosumers — amid concerns that unaffordable tariffs and persistent inefficiencies are undermining the power utility business.
The regulator has now scheduled a public hearing for February 6 after receiving comments from stakeholders, including the general public, government ministries, departments, power utilities and representative organisations. In a public notice, Nepra invited all stakeholders to attend the hearing on Friday and present their views.
Nepra has already issued draft rules seeking to reduce the size, duration and repayment rates of net-metering arrangements after the government repeatedly backtracked on changes to the solar power policy following public criticism. Earlier, the Economic Coordination Committee of the cabinet had approved similar proposals at the request of the Power Division, but these were blocked by the prime minister at the cabinet stage due to public backlash.
Because of expensive, unreliable and inefficient utility services, daytime electricity demand from distribution companies has failed to keep pace with growth in night-time consumption. This imbalance has created grid stability challenges, as generation has to be rapidly ramped up after sunset and scaled back during the day, while also exacerbating financial pressures.
Public hearing set for Feb 6 to discuss slashing incentives for solar net-metering users
The draft Prosumer Regulations 2025, issued at the government’s behest, propose repealing the Alternative and Renewable Energy Distributed Generation and Net Metering Regulations of 2015. The revision aims to strike a “balance” between the interests of utilities and consumers by allowing households to hedge against unaffordable tariffs without turning net metering into a profitable business.
Under the proposed framework, prosumers would not be allowed to install solar systems exceeding their sanctioned load, effectively cutting permissible solar capacity by up to 50 per cent. For instance, a consumer with a sanctioned load of 10 kilowatts would only be allowed to install a 10kW solar system.
Currently, prosumers are entitled to install solar capacity of up to 150pc of their sanctioned load, allowing a 10kW consumer to set up a 15kW system. Existing consumers will remain unaffected until the expiry of their current seven-year contracts, after which they will be governed by the new rules.
The revised regulations would apply to installations ranging from one kilowatt to one megawatt, bringing all such systems under Nepra’s direct regulatory and licensing domain. At present, consumers with systems below 25kW are licensed directly by distribution companies.
The proposed rules also reduce the life of net-metering contracts from seven years to five, with renewal for another five years subject to mutual consent of the distribution company and the consumer, and without any binding obligation.
Another major change involves payments for surplus electricity supplied to the grid. Prosumers would be paid the national average energy purchase price, estimated at around Rs13 per unit, instead of the current rate of about Rs26 per kilowatt-hour.
The billing mechanism would shift from net metering to net billing. Electricity imported from the grid would be charged at the applicable consumer tariff, while exported electricity would be credited at the national average energy purchase price. Excess credits could be carried forward or settled quarterly.
This comes despite Nepra’s own assessment that the quality of service provided by distribution companies remains sub-optimal. The regulator has noted that heavy taxes, levies and surcharges inflated electricity costs, pushing consumers towards decentralised and off-grid solutions and weakening demand for grid-based power. Nepra says on-grid solar installations have crossed 6,000MW, while total solar capacity, including off-grid systems, has exceeded 13,000MW.
The draft regulations also propose clearer procedures, stricter technical standards and a revised billing methodology to better integrate small-scale generation into the national grid while safeguarding system stability.
Published in Dawn, January 31st, 2026
ISLAMABAD: Pakistan’s merchandise exports posted a modest rebound in January after recording five consecutive monthly declines in the current fiscal year, offering tentative relief to exporters and reviving expectations of a potential recovery in overseas shipments.
In absolute terms, export proceeds reached $3.061 billion in January, up from $2.951bn in the corresponding month of last year, reflecting an increase of 3.73 per cent, the Pakistan Bureau of Statistics (PBS) said on Monday. On a month-on-month basis, export proceeds grew by 34.96pc in January.
Negative growth in exports has continued since August of the current fiscal year, barring July, when proceeds grew 16.43pc year on year. Export earnings posted negative growth, with proceeds declining by 20.41pc in December.
This follows a 14.54pc drop in November, 4.46pc in October, 3.88pc in September, and 12.49pc in August, reflecting persistent pressures on the country’s external trade performance. In the first seven months (July-January), export proceeds recorded negative growth of 7.09pc to $18.195bn compared with $19.583bn in the corresponding period last year.
Trade gap widens 28.22pc to $22.038bn in July-January FY26
The government has recently announced several measures, including a reduction in the energy rates and others, to minimise pressure on the country’s trade performance. Last week, the prime minister announced a decrease of Rs4.4 per unit in the electricity tariff for the industrial sector, in a bid to improve productivity and exports. He also announced a reduction in wheeling charges for industries, stating that “it will be less than Rs9 per unit.” He hoped that the move would help “industries sell their power to neighbouring industries”.
To provide additional relief, the premier said that “with the cooperation and support of Pakistan’s banks, we are announcing a reduction in the export refinance rate from earlier 7.5pc to 4.5pc”.
Currently, the exporters are grappling with subdued global markets and the high cost of doing business in the country. The textile exporters have already complained about contractions owing to the high cost of doing business. In FY25, export proceeds rose 4.67pc to $32.106bn against $30.675bn in the preceding year.
Trade deficit
According to the PBS data, imports fell 1.4apc to $5.786bn in January from $5.904bn over the corresponding month of last year. Month-on-month, imports decreased 4.85pc.
In the first seven months of 2025-26, the import bill grew by 9.42pc to $40.233bn, up from $36.771bn in the corresponding period last year. The import rose 6.57pc to $58.38bn in July-January FY25 from $54.78bn over the previous year.
The trade deficit narrowed 6.61pc to $2.725bn in January from $2.918bn over the corresponding month of last year. The trade deficit swelled 28.22pc to $22.038bn in July-January 2025-26, up from $17.188bn over the corresponding period last year. The trade deficit for FY25 widened by 9pc to $26.27bn, up from $24.11bn in the preceding year.
Published in Dawn, February 3rd, 2026
Consumer price inflation rose 5.8 per cent year-on-year in January, official data showed on Monday, underscoring the central bank’s warning that price pressures could temporarily breach its target band as economic activity picks up.
The reading comes a week after the State Bank of Pakistan (SBP) held its policy rate at 10.50pc, saying inflation could exceed its 5pc to 7pc medium-term target range for a few months this year, even as growth gains momentum and imports push the trade deficit wider.
The reading from the Pakistan Bureau of Statistics (PSB) compared with 5.6pc in December, when prices fell on a monthly basis due to lower perishable food costs.
On a month-on-month basis, inflation increased by 0.4pc in January.
The SBP said it viewed the real policy rate as sufficiently positive to stabilise inflation over the medium term, even as it flagged stronger domestic demand and external pressures as upside risks to prices.
The finance ministry had projected inflation would remain within a 5pc to 6pc range in January.
An International Monetary Fund staff report has cautioned against premature monetary easing under the $7 billion loan programme, urging policymakers to remain data-dependent to anchor inflation expectations and rebuild external buffers.
Consumer price inflation rose 5.8 per cent year-on-year in January, official data showed on Monday, underscoring the central bank’s warning that price pressures could temporarily breach its target band as economic activity picks up.
The reading comes a week after the State Bank of Pakistan (SBP) held its policy rate at 10.50pc, saying inflation could exceed its 5pc to 7pc medium-term target range for a few months this year, even as growth gains momentum and imports push the trade deficit wider.
The reading from the Pakistan Bureau of Statistics (PSB) compared with 5.6pc in December, when prices fell on a monthly basis due to lower perishable food costs.
On a month-on-month basis, inflation increased by 0.4pc in January.
The SBP said it viewed the real policy rate as sufficiently positive to stabilise inflation over the medium term, even as it flagged stronger domestic demand and external pressures as upside risks to prices.
The finance ministry had projected inflation would remain within a 5pc to 6pc range in January.
An International Monetary Fund staff report has cautioned against premature monetary easing under the $7 billion loan programme, urging policymakers to remain data-dependent to anchor inflation expectations and rebuild external buffers.
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