A Complete Guide for Solar Installers in Pakistan
Are you looking to set up a solar panel system in Pakistan? Then you need to know what the distinction between net metering and net billing is. Both systems are used in allowing the return of excess solar power to the grid; however, the two systems function in different ways and there can be major implications on how much you pay each month on your electricity bills.
Below we will explain the two systems, compare their attributes and determine which is the best for you.
Quick Summary
| Net Metering | Net Billing |
|---|---|
| Excess electricity is adjusted against the electricity you consume from the grid. | Excess electricity is purchased separately by the electricity company at a fixed rate. |
| Directly reduces your monthly electricity bill. | Your electricity bill is calculated separately and you are paid or credited for the electricity you export. |
| Usually provides higher savings. | Savings depend on the export purchase rate. |
What Is Net Metering?
Net Metering refers to a system where the owners of a solar system get to feed their excess energy into the electricity grid. This is in exchange for the units which will be deducted against the units they import from the grid.
When it is bright, your solar panels may produce electricity in excess of what you require. This excess energy is put into the electricity grid rather than having it go to waste. When your solar panels do not produce enough electricity—for instance at night—you draw electricity from the grid and this helps you save some money on your bills.
How Does Net Metering Work?
- Solar panels produce electricity.
- Your home uses the required electricity.
- Extra electricity is exported to the national grid.
- At night or during low sunlight, electricity is imported from the grid.
- The exported units are adjusted against the imported units.
- If there are any units left you only pay for them.
For instance: if you import 600 units in one month and export 400 units, you will be charged for only 200 units (subject to applicable charges and regulations).
What is Net Billing?
Net Billing can also pay solar users for the electricity they send back to the grid. But unlike Net Metering the exported electricity is not netted off the imported electricity units.
Instead, the utility buys your exported power at a fixed rate and separately gives you a payment or a credit. Your imported electricity is billed normally according to the applicable tariff.
How Net Billing Works
- Solar panels produce electricity.
- Your home uses the electricity it needs.
- Extra electricity is sold to the grid.
- The units that exported will be recorded by the electricity company.
- You get paid or credited for the units that are exported.
- Your imported electricity is billed separately.
Net Metering vs Net Billing
| Feature | Net Metering | Net Billing |
|---|---|---|
| Billing Method | Exported units offset imported units | Imported and exported electricity are billed separately |
| Electricity Credit | Unit-to-unit adjustment | Payment or monetary credit |
| Monthly Bill | Usually much lower | Depends on export payment rate |
| Return on Investment | Faster | Comparatively slower |
| Savings | Higher in most cases | Moderate |
| Best For | Residential and commercial users | Areas where Net Billing is implemented |
Real-Life Example
Suppose your monthly electricity usage is as follows:
| Description | Units |
|---|---|
| Electricity Imported from Grid | 600 Units |
| Electricity Exported to Grid | 400 Units |
Under Net Metering
| Imported Units | 600 |
| Exported Units | 400 |
| Units Adjusted | 400 |
| Billable Units | 200 |
Under Net Billing
| Imported Units | 600 |
| Exported Units | 400 |
| Electricity Bill | Charged for 600 Units |
| Export Payment | Separate payment or credit |
This example shows why Net Metering usually provides greater savings for residential consumers.
Net Metering Pros
- Cuts down electricity bills per month.
- Better return on investment.
- Uses excess solar energy.
- Faster cost reduction for solar installations.
- Environment friendly.
- Great for home or office use.
Net Metering Cons
- Needs to be approved by the electricity company.
- Bi-directional meter must be approved.
- Please note approval can take some time.
- “Depending on government policy and regulation.
Advantages of Net Billing
- Simple billing process.
- Payment for export of electricity separately.
- Encourages solar energy production.
- Suitable for certain billing policies.
Disadvantages of Net Billing
- Imported electricity is billed normally.
- Export rates may be lower than electricity purchase rates.
- Lower monthly savings compared to Net Metering.
- Longer payback period for the solar investment.
Between the Two Which is Best?
For most consumers in Pakistan, net metering would be the best choice due to the reduction in the monthly electricity bills through adjustments in exported and imported electricity.
Net Billing may be suitable where it is the available policy or when export compensation rates are attractive. The savings tend to be smaller than those of net metering.
Things to Keep in Mind Before Making a Choice
Consider these factors before choosing your solar system installation:
| Factor | Why It Matters |
|---|---|
| Monthly Electricity Usage | Helps determine the right solar system size. |
| Daytime Electricity Consumption | Affects how much electricity is exported. |
| Night time use of electricity | Determines the amount of electricity imported. |
| Size of the Solar System | Affects the total amount of electricity generated. |
| Electricity Tariff | Impacts potential savings. |
| Government Policies | Rules and compensation rates may change. |
| Budget | Helps select the most suitable system. |
Frequently Asked Questions
Which is better – Net Metering or Net Billing?
As far as residential customers are concerned, Net Metering is more cost-effective since the electricity that is fed back into the system will directly offset your consumption of electricity from the utility company.
Can I earn money through Net Metering?
Net Metering mainly reduces your electricity bill by adjusting exported units against imported units. It is not generally designed as a source of direct income.
Does Net Billing reduce my electricity bill?
With Net Billing, you will be paid or credited for your exported energy, but your imported energy is charged separately.
Which is faster in generating returns on investments?
Normally, Net Metering provides faster returns since it generates more savings in monthly bills.
Is there any possibility that the criteria can change?
Yes. The government may change its policy as well as electricity regulations in the coming future.
Both Net Metering and Net Billing can assist solar owners in optimizing their solar energy usage. However, both schemes differ on the way excess energy is reimbursed. In the case of Net Metering, there will be adjustments made on the electricity exported against the amount of electricity used by you, while Net Billing allows you to get paid for electricity that is exported.
In case your aim is to lower your electricity bills and save more, then the Net Metering system is more preferable for most people in Pakistan. In order to decide which one to select, compare your electricity consumption and solar power production along with the latest policy from the government
