What is the Difference Between Net Metering and Gross Metering?
News is circulating in the Pakistani media that the government is considering a plan to end net metering and introduce a gross metering policy for solar panel users. According to reports, the government has also informed the IMF about the new gross metering policy and the reason for introducing this policy is to overcome the electricity price crisis in the country. However, no final decision has come out from the government regarding gross metering. Federal Energy Minister Owais Ahmed Laghari has clarified that the government has no plans to abolish net metering. While holding a press conference at the headquarters of Lahore Electric Supply Company (LESCO) on Sunday, Owais Leghari said that the policy of net metering was introduced by PML-N leader Nawaz Sharif during his previous term as Prime Minister. The government will continue to encourage net metering as this policy is close to Prime Minister Shahbaz Sharif's heart. Solar consumers who already have net metering contracts with electricity distribution companies are not affected at all. will He added that the government will continue to promote net metering and any change in policy will be made after consultation with all stakeholders.
What is net metering and gross metering?
As far as net metering is concerned, this policy was introduced in the year 2017. Under this policy, consumers who generate their own electricity from the solar system can send their excess electricity back to the respective electricity supply company and recover the cost. Net metering requires the customer to have a bidirectional meter. After installing the solar system, the consumer submits a net metering application to the 'Alternative Energy Development Board', a subsidiary of NEPRA. After installation of net metering, a license is issued by NEPRA to the consumer after which the consumer sells the surplus power to the respective power company. Through this system, solar consumers use self-generated electricity and earn profit by selling additional units of electricity, while their bill is negative, i.e. consumers do not have to pay the bill. Gross metering, on the other hand, is a slightly different process whereby solar consumers never use the electricity they generate. All the electricity generated by the solar panels is exported to the national grid after which the consumer has to import the same electricity back from the grid. Two different electric meters are also used for gross metering. One meter measures the imported electricity and the other the exported electricity. As in net metering consumers earn money on additional units without paying the electricity bill, the same is not possible in gross metering. The consumer sells the electricity generated by his solar to the government at a cheap price and receives from it the expensive government rate and pays the electricity bill on the same. Due to this tariff difference, the electricity bill is reduced, but free electricity cannot be used as in net metering. In net metering, the consumer uses the electricity he generates and earns money by selling the excess electricity without paying the bill, while in gross metering, the solar consumer sells the electricity he generates to the government at cheap rates and buys electricity at the government unit rate and Also pays the bills. However, gross metering customers pay lower electricity bills than those who do not have solar panels installed.
It should be noted that due to the reduction in the prices of solar panels in the country and the increasing prices of electricity in the country, a large number of consumers are shifting to solar technology, which is causing losses to the government on electricity bills. The government's decision to end net metering and start gross metering has not been finalized, but it is being considered and the decision will be taken only after the approval of the federal cabinet.
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