Gross Metering
We rely heavily on electronics for our daily tasks, from washing machines and hair straighteners to mobile phones and juicers. These devices require a significant amount of electricity. However, the cost of electricity is high and continues to rise due to inflation in Pakistan.
Solar panels offer an excellent solution to address the high cost and demand for electricity, particularly with the use of Net Metering. However, the government of Pakistan recently introduced a new policy replacing net metering with gross metering. In this blog, we will discuss gross metering, how it differs from net metering, and people’s opinions on this change.
Who introduced the policy of Gross Metering?
During recent discussions with the International Monetary Fund (IMF), Pakistani authorities revealed plans to replace the net metering policy for rooftop solar panels with gross metering. The main objective of these changes is to encourage the use of grid electricity, which is much more costly for Pakistani people. This proposal aims to address a $15.4 billion energy debt restructuring with China. Under the new policy, homeowners must feed all generated solar energy directly into the grid, thereby losing the financial benefits of net metering.
Background of Using Net Metering
Pakistan experiences all types of weather, including winter, spring, autumn, and summer. Most of the time, the temperature is above 30°C; in the summer, it can exceed 45°C in many areas. This high temperature makes electricity essential, especially for air conditioners, water pumps, and coolers. The demand for refrigerators also increases during the summer.
Solar panels offer an excellent solution to address the high cost and demand for electricity, allowing people to generate electricity and save on costs. Net metering makes this system even more beneficial. For example, if a solar system produces 500 units of electricity but the household only uses 300 units, the extra 200 units can be fed back into the grid. These units can be used later when the solar panels are not producing enough electricity, such as during cloudy or cold weather. This process, facilitated by a net meter, has benefited people with solar systems in their homes or offices. However, the policy for net metering is now being replaced by gross metering.
What is Gross Metering?
Gross metering, also known as the feed-in tariff (FiT) arrangement, is a billing system where all the electricity generated by your solar panels is fed directly into the grid. Unlike net metering, you cannot use all the generated energy for personal consumption only. Instead, all the energy produced by your system must be exported to the grid. Regardless of the size of your solar system or the amount of energy produced, you are required to export the power to the electrical department as per the policies of the Pakistan government. In short, solar owners sell the electricity to the electrical department and then purchase their units for home consumption at higher rates.
The difference between Gross Metering and Net Metering
| Net Metering | Gross Metering |
| In net metering, excess electricity generated by solar panels is sent to the grid. This excess energy can be drawn back later when needed. | In gross metering, all the electricity generated by solar panels is sent directly to the grid. We cannot use this energy directly. Instead, we purchase electricity from the grid when needed at the prevailing rates. |
Effects of Gross Metering
Higher Electricity Costs
People with solar panels may face higher electricity bills as the electricity they use will be supplied by the grid.
Reduced Financial Benefits
The purpose of solar panels is to reduce electricity bills and achieve savings. The aim of saving from using solar-generated electricity for personal consumption is lost now.
Impact on Solar Investment
After the implementation of this policy, the solar panel industry might face a setback. People who import a lot of solar products due to high demand might be discouraged due to the reduced financial incentives.
Conclusion
The shift from net to gross metering marks a significant change in Pakistan’s electricity policies. This is a major shock for people with net metering systems or those planning to invest in solar panels, significantly as solar prices decrease, encouraging people to adopt solar energy to avoid high electricity bills. While gross metering aims to address financial challenges and promote grid electricity use, it removes the direct economic benefits of using solar-generated electricity for personal consumption. This change could lead to higher electricity costs for homeowners with solar panels.
It is important for consumers to understand the differences and implications of these policies so that they can make informed decisions about their energy usage and investments in solar technology.
