A.   Background (BG)

1.   This refers to the following Important PGECs in trail, blue, italic and after double line (a) 163 of 21.3.25 about Govt Electric saving of Rs 1.4 Trillion and Bills reduction & Action (b) 157 of 3.3.25 about Electricity Bills significantly reduction claimed & KCV  (c) 155 of 27.2.25 about Government saved Rs 1.1 Trillion & Action for Bills reduction

2.   We also refer to several Other QCs including the following:  (a) 129 of 18.10.24 about Five + 18 Power Companies Agreement Termination & Jamaat, etc. efforts for U (b) 118 of 30.8.24 about KE FCA Bomb of Rs 37.75 for May-June 2024 per NEPRA order in upcoming bill and Jamaat –e-Islamic

B.   Updated Commentary

Further to KQU 3290 dated 17.3.25, an important matter, we would inform you about No tax on rooftop solar units sold to grid: Leghari (Attachment 3066.1) in the ensuing paragraph, with emphasis in bold & Underline for quick reading.

4.   Speaking to Shahzad Iqbal in Geo News programme Naya Pakistan on Sunday night, Leghari said there will be no tax at all on the units to be generated by roof solar panel consumers and will be exported to the grid. He, however, added they will have to pay the 18 per cent tax on electricity from the grid as like other consumers.

5.   The minister dispelled the impression that the consumers of roof solar panels, to be installed under the new solar policy approved by ECC, would sell the electricity at Rs 8.88 per unit because of the 18 per cent tax per unit instead of Rs10 per unit and clarified that buyback rate will be Rs10 per unit under the new policy.

6.   He said at a 15 per cent plant factor, if the roof solar panel consumers, under the new policy, use 25 per cent solar electricity and 75 per cent grid power, then their payback period of the investment will stand at 3.5-4 years. However, under the existing policy, he added, the net metering consumers will continue to sell their units at Rs27 per unit in their remaining contract periods. “The net metering consumers are having a payback period of 18 months, but gross metering consumers under the new policy will have a period of 3.5-4 years.”

7.   According to him, during the last one-and-a-half years, 1500-2000 MW has been installed by roof solar panel consumers and this would continue in the years to come with an estimated hike of 1000-1100 MW per year in the future. So far the number of solar panel consumers has increased to 2,83,000 putting an additional burden of Rs 150 billion on the grid electricity consumers which is why their tariff has been increased by Rs 1.5 per unit. The grid consumers are paying the cost of a grid storage facility for net metering consumers.

8.   “Therefore, the government has rationalised the roof solar policy under which a net billing system has been introduced at buyback rate of Rs 10 per unit for five years contract period.”

9.   The energy minister hoped that the industrial demand for electricity would increase in the months to come because of the reasonable reduction in power tariff to be announced soon by the Prime Minister. He also mentioned that the government had scrapped the committed projects of 10,000MW for which the letters of intent (LoIs) had been issued as their electricity was costly.

C.   Further Details & Services 

Should you require any clarification or explanations in respect of the above or otherwise, or require Income Tax, Federal & Provincial Sales Tax or Withholding Tax Advisory, Statement or Return Filing or Review services, or related accounting matters like the above, please feel free to email Mr Amsal at amsal@kasbati.co with CC to info.kasbati@professional-excellence.com. Your Goodself may continue to get other services from your current Tax & Legal Advisors.

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