Govt limits contract term for solar net metering to 5 years

The government has introduced new measures to regulate net metering contracts, limiting their validity to five years and implementing periodic revisions to buyback rates. This decision follows criticism over the reduction of net metering buyback rates from Rs 27 to Rs 10 per unit.

Policy guidelines have been issued to the power sector regulator, Nepra, directing it to revise the buyback rate to Rs 10 per unit, based on the National Average Power Purchase Price. Nepra may also periodically adjust these rates in the future, Business Recorder reported on Tuesday citing sources in Power Division.

Under the updated settlement mechanism, imported and exported units will be billed separately. Exported units will be compensated at the approved buyback rate, while imported units will be charged at the applicable peak or off-peak rate during the monthly billing cycle.

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If the value of exported units exceeds that of imported units in any billing cycle, the net amount will be credited to the consumer for subsequent cycles.

However, consumers will not be allowed to redeem or cash out the credited amount.

Moreover, Nepra will establish hosting capacity limits for distribution transformers and feeders, based on a comprehensive study to be conducted by each distribution company within six months of the policy’s approval.