Govt removes licence requirement for solar users up to 25kW

ISLAMABAD: The government has withdrawn the licensing requirement for consumers installing solar systems of up to 25 kilowatts under the net metering framework, in a move presented as relief for small-scale users.

The decision followed special directions from Federal Minister for Power Awais Leghari, after which the Power Division formally wrote to the National Electric Power Regulatory Authority (Nepra) seeking removal of the licence condition for smaller solar consumers.

Nepra has approved the request, clearing the way for what officials described as a simpler regulatory arrangement for household and small commercial solar installations.

Under the revised framework, consumers using solar systems of 25kW or below will no longer be required to pay a one-time fee of Rs1,000 per kilowatt to the regulator. Officials said the measure would substantially reduce procedural requirements for both new and existing solar users.

According to the notification, the change will take effect from February 9, 2026.

Clarification after confusion over licensing rules

The development comes after reports about compulsory licensing for all solar users created confusion. In response, the Power Division had described such claims as misleading.

Last week, the ministry said the licensing provisions were already part of Nepra’s regulatory framework and were being implemented through distribution companies, rather than being newly introduced by the federal government.

It also clarified the distinction between off-grid and on-grid users. According to the ministry, consumers using off-grid solar systems do not need its approval to install them. However, on-grid users remain subject to regulatory procedures under net metering rules.

Officials had also stated that the one-time fee of Rs1,000 per kilowatt applied to on-grid solar connections, while stressing that no new tax had been imposed on solar systems.

Relief for small consumers

The latest approval means smaller net metering consumers will no longer face the licensing condition that had applied under the existing framework. The move is expected to benefit households and small businesses seeking to install or regularise solar systems within the 25kW threshold.

Officials said the change would make the process easier for consumers already using such systems as well as those planning new installations. The decision specifically applies to users falling within the 25kW and below category under the net metering scheme.

The government has framed the measure as part of efforts to ease compliance requirements for small-scale solar adoption while maintaining the broader regulatory structure for on-grid consumers under Nepra rules.