Solar Shift Leaves Grid Unaffected, CPPA Tells Nepra

Thursday, 20 November 2025 | Web Desk

A frequently asked question amid the growing use of solar energy in the country is whether it has had any negative impact on the national grid. The government itself has now answered this question: no, it has not.

Central Power Purchasing Agency (CPPA) CEO Rehan Akhtar, while testifying before the National Electric Power Regulatory Authority (Nepra), said that although solar generation is increasing, it is not having any significant impact on the grid.

He said that rising energy costs have pushed consumers toward solar power. “They are now consuming more due to solar availability, but their withdrawal from the national grid remains almost stable. They are drawing the same amount as before,” he stated, while acknowledging that no firm prediction can be made about the future.

These remarks came during a public hearing on CPPA’s request to rebase the Power Purchase Price (PPP) from January 2026 under government policy directives.

The CPPA presented five different scenarios regarding possible tariff adjustments from January 1, 2026. These scenarios projected an average PPP ranging from Rs25.95 per unit in the best case to Rs26.53 per unit in the worst-case scenario involving heavy currency depreciation (Rs300–310 per dollar).

The current PPP for FY26 stands at Rs25.98 per unit, indicating general stability.

The report stated that electricity added to the grid through net metering surged by 173% to 726 million units in 2024, compared to 266 million units in 2023, even though overall demand from distribution companies (Discos) increased by only 1%.

Nepra was informed that global fuel prices are expected to remain generally stable, with a risk of a 5% increase in the worst-case scenario. Likewise, considering pressures on foreign exchange reserves, one scenario estimated a Rs10 depreciation in the local currency in the first six months of the next calendar year and another Rs10 in the following six months. Interest rates were projected at 11% for the first half and 10.5% for the second half.

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Industrial consumers lamented high energy costs, saying they were making their products uncompetitive. They said the industry was still cross-subsidising other consumer categories by Rs131 billion, and that all tariff relief announced by the government had already disappeared.

They added that CPPA’s projection of rising demand was contrary to ground realities, as consumption is falling due to high energy prices, industrial shutdowns, and a rapid shift toward solar power.