The government has abolished net‑billing and slashed the solar power buy‑back rate from Rs 27 to just Rs 10 per unit for surplus electricity generated by rooftop solar users delivering a heavy blow to new solar adopters.

18% Sales Tax Now Applies to Grid-Fed Electricity

In addition to lower compensation, solar users must now pay an 18% sales tax on the electricity they consume from the national grid, significantly shrinking the financial benefits of rooftop solar installations.

Gross Metering Replaces Net Metering System

Under the new gross metering framework, solar users sell generated electricity to the grid at low rates and separately purchase grid electricity at full market prices eliminating previous unit offsets.

Salaried and Middle-Class Users Bear the Burden

Authorities claim that affluent urban users were avoiding fixed grid charges, shifting costs to others. The policy aims to correct this imbalance, but now places significant financial burden on middle-class solar panel users.

Contract Duration Cut and Capacity Limits Tightened

New users face downgraded conditions: five-year contracts instead of seven, stricter technical standards, and a cap on solar capacity equal to sanctioned electrical load curbing flexibility for larger rooftop systems.

Backlash Sparks Cabinet Intervention and Policy Reassessment

Following backlash from industry, solar consumers, and policy experts, the federal cabinet has temporarily halted implementation to review proposed changes and engage stakeholders before finalizing revisions.

New Reality for Solar Users: Batteries or Off‑Grid Solutions

Many users are investing in hybrid inverters with battery storage to offset the financial losses. The new structure discourages feeding power back to the grid and motivates a shift toward partially or fully off-grid solar setups.

Long-Term Risks to Renewable Adoption and Grid Health

While net-billing cuts reduce cross-subsidies, critics warn this may slow rooftop solar growth, impede clean energy targets, and undermine grid stability unless accompanied by broader reforms and smarter load management.