Net Metering vs Net Billing in Pakistan: What Changed in 2026
The single rule that flipped Pakistani solar economics, in 800 words. Plus what to do if you have an existing system, and what to size for if you are installing now.
By Asad Baig · Lahore · April 2026 · Approx. 6-min read
The two rules in one paragraph each
Net metering is a one-to-one swap. Your solar system exports a kilowatt-hour to the grid in the afternoon. The grid credits you for one kilowatt-hour of electricity to use later. You export at the same rate you import. Pakistan operated this way from approximately 2017 through February 2026.
Net billing is a two-rate system. You export at one rate. You import at another. In Pakistan as of February 2026, you export at approximately Rs. 11 per unit. You buy grid electricity back at approximately Rs. 48 per unit. The asymmetry is roughly four to one. Pakistan now operates this way for new installations.
That single change is the most important shift in Pakistani solar policy in nearly a decade. It changed the economics for new installations, the right system size to install, and the value of adding battery storage.
This article walks through the implications.
The economic effect on payback periods
Under net metering, a typical 10 kW residential solar system in Pakistan paid back its installed cost in approximately 30 to 36 months for a household consuming 1,000 units per month.
Under net billing, the same system pays back in approximately 48 to 60 months for the same household.
Five years instead of three. Worse, but still positive over the 20-25 year life of the panels. After payback, you have effectively free electricity for 15 to 20 more years.
The longer payback is driven entirely by the export-import rate gap. Less revenue per exported unit means longer time to recover the installation cost.
WHY THIS HAPPENED
The Pakistani government chose net billing over net metering specifically to slow the exodus of households from the grid. Six million Pakistani households had gone solar between 2018 and 2024. Aggregate grid demand was falling, threatening the IPP capacity payments that are fixed by contract. Net billing makes solar less attractive, which is the policy point. The government's choice was between fixing the IPP contracts that caused the affordability crisis, or punishing the households trying to escape that crisis. They chose the latter.
I have written about the political logic at The Solar Crackdown.
What to do if you have an existing net metering system
The most common question I get from existing solar households is whether their system will continue to operate under the original net metering rules.
The answer is mostly yes. Most existing net metering agreements are grandfathered for the duration of the original contract. The new rules apply primarily to new installations.
Continue operating your system normally. Do not abandon it. The economics still work for you. The 2026 changes apply mostly to new installations, not retroactively to your existing arrangement.
There are some specific scenarios where existing systems may face changes:
- System expansion: If you add capacity to your existing system, the additional capacity may fall under the new rules
- Ownership transfer: If the property changes hands, the buyer may need to renegotiate under the new rules
- Major system replacement: A complete system replacement (new inverter, new panels) may trigger reclassification
For typical operating households not making major changes, the existing arrangement continues. Profit by Pakistan Today reported on April 3, 2026 that NEPRA had explicitly committed to protecting existing solar net metering users while restricting expansion benefits.
What to size for if you are installing now
Under net metering, the right strategy was to oversize your system to maximise daytime export. The grid acted as your battery, storing your afternoon surplus for nighttime use at no extra cost. Bigger system, more export, faster payback.
Under net billing, oversizing for export is a poor strategy. You are exporting at Rs. 11 to buy back at Rs. 48. The right strategy is to size for self-consumption, producing what you actually use during daylight hours, with surplus stored in a battery for evening use rather than exported at the unfavourable rate.
The implications for system design:
| Sizing strategy | Net metering era (2024) | Net billing era (2026) |
|---|---|---|
| Right system size | Oversize to maximise export | Match daytime consumption |
| Battery worth it? | No, grid acts as free storage | Yes, for households with evening usage |
| Connection to grid? | Essential for daily use | Maintain for backup, minimise consumption |
| Payback period | 30-36 months | 48-60 months |
A reputable installer in 2026 should be sizing your system based on your actual consumption pattern (with a particular focus on daytime versus evening usage), not pushing you toward a maximum-export configuration that no longer makes sense.
I have written the full installation decision framework at Should You Install Solar in Pakistan in 2026?. For the specific math on adding battery storage, see Hybrid Solar Systems: The New Math After the 2026 Rules.
What you should take away
Three things to remember about net metering versus net billing in Pakistan.
The four-to-one export-to-import rate gap is the single most important change. Everything else flows from this one rate gap. Longer payback. Different sizing. New value of battery storage. Different installer questions to ask. The single change that actually matters is the export rate of Rs. 11 against the import rate of Rs. 48.
Existing net metering customers are mostly grandfathered. Do not panic. Do not abandon your existing system. Most existing arrangements continue under their original terms. Verify the specific terms with your installer or your distribution company.
For new installations, the right system design has changed. Size for self-consumption rather than export. Strongly consider hybrid systems with battery storage if you have meaningful evening consumption. Ask your installer to use the 2026 net billing rates in payback calculations, not the 2024 net metering rates.
The policy choice that produced the 2026 rules was, in my view, the wrong one. The right response to a financial collapse caused by bad IPP contracts is to fix the contracts, not to punish the citizens trying to escape them. But the rules are now in force. The question for households is not whether to like them but how to make the best decisions within them.
Now you know the difference. Pass it on.
Thank you for reading.
, Asad Baig, Lahore, April 2026
Frequently asked questions
What is net metering in Pakistan? Net metering, the rule in force from approximately 2017 through February 2026, paid Pakistani solar prosumers at parity. One unit exported to the grid was credited as one unit of grid electricity to use later. Equal rates for export and import.
What is net billing in Pakistan? Net billing, the rule in force from February 2026, pays Pakistani solar prosumers at separate rates for export and import. Export at approximately Rs. 11 per unit. Import at approximately Rs. 48 per unit. A roughly four-to-one asymmetry.
Why did Pakistan switch from net metering to net billing? The Pakistani government, through NEPRA, switched the policy specifically to slow the exodus of households from the grid. Six million Pakistani households had gone solar between 2018 and 2024 with their own money. Falling grid demand was threatening the IPP capacity payments that are fixed by contract at approximately Rs. 2 trillion per year.
Are existing net metering customers affected by the 2026 rules? Mostly no. Existing net metering agreements are grandfathered for the duration of the original contract. The new rules apply primarily to new installations. Profit by Pakistan Today reported on 3 April 2026 that NEPRA had explicitly committed to protecting existing solar net metering users.
Should I expand my existing solar system in 2026? Probably not, if the expansion would trigger reclassification under the new rules. Consult your installer to confirm whether a specific expansion preserves your grandfather status. In many cases, adding battery storage to an existing system is a better choice than adding panel capacity.
Does net billing make solar a bad investment in Pakistan? No, just a worse one than under net metering. Payback has extended from approximately 30-36 months to 48-60 months for a typical 10 kW household system. Over the 20-25 year panel life, the return remains positive for most middle-class Pakistani households.
Sources and notes
- NEPRA Prosumer Regulations 2026, NEPRA
- ProPakistani, Solar Users to Pay Full Electricity Unit Price (9 February 2026)
- Profit by Pakistan Today, NEPRA Protects Existing Solar Net Metering Users, Restricts System Expansion Benefits (3 April 2026)
- Express Tribune, NEPRA rolls out new regulations abolishing net metering (December 2025)
- Profit by Pakistan Today, How will net-metering change if NEPRA's draft Prosumer Regulations 2025 get approved (17 December 2025)
- South Asian Voices / Stimson Center, Pakistan's Solar Boom and Stagnation (March 2026)
Related reading from Asad Baig
The pillar this explainer supports
Sibling explainers in this cluster
- The 2026 NEPRA Prosumer Regulations Explained, Line by Line
- Hybrid Solar Systems in Pakistan: The New Math After the 2026 Rules
- The Solar Crackdown: Why the Government Punished Six Million Households
Asad Baig