The government has proposed lower electricity tariffs for solar panel owners using net metering. Under the plan, the government would buy surplus solar power at a reduced rate. Currently, it purchases at Rs27 per unit, but the new plan suggests lowering it to Rs10 per unit. The government shared this proposal with the International Monetary Fund (IMF).
The IMF raised concerns about how the government will address solar panel owners who remain off-grid. While no firm decision has been made, the IMF warned about the rapid increase in solar installations. They cautioned that this trend could challenge the efficiency of the power sector in the future.
At the same time, the government is working on restructuring power tariffs nationwide. It has already decommissioned five inefficient state-owned plants. Moreover, it renegotiated tariffs with 14 independent power producers (IPPs) and reduced costs for eight bagasse-based IPPs. These steps aim to improve the power sector’s efficiency.The government also plans to use the Rs1.3 trillion fiscal space from lower debt servicing to reduce electricity tariffs. Officials expect that ongoing negotiations with remaining IPPs will further lower costs. These measures are part of efforts to restructure the power sector while addressing IMF concerns.