Economic Analysis of Net Metering Regulations for
Residential Consumers in Pakistan
Waqas ur Rehman, Intisar A. Sajjad, Tahir N. Malik
Electrical Engineering Department
University of Engineering and Technology
Taxila, Pakistan
intisar.ali@uettaxila.edu.pk
Abstract—Net metering is used to incentivize the distributed
generation owners. It is introduced in Pakistan with the aim to
promote the building integrated local generation. Presently, it is
hard to find any study on the economic incentive indicators of the
net metering policy for residential customers in Pakistan. This
paper presents the economic evaluation of net metering benefits
to the individual residential consumers in the presence of
Building Integrated PV (BIPV) system under current net
metering regulations in Pakistan. The energy demand of the
individual apartments and the common area services inside the
building is calculated by means of daily energy usage of the
residents for a typical day. The aggregate demand of the
residential building, comprising of 100 residential units and
common area services, is calculated. The estimation of power
profiles of the PV generation system is carried out with the help
of PVGIS. At the end, the economic analysis of the proposed net
metering scheme is presented. The net metering policy is found to
be feasible up-to 50 kWp PV capacity when it is applied on the
common area services only and the billing is carried out
individually. When it is implemented on the aggregate energy
demand of the entire residential building, the annual savings are
observed for installed PV capacity above 80 kWp.
Keywords—demand aggregation; net metering; residential
consumers; solar generation.
I. INTRODUCTION
The economic and industrial growth of a country is mainly
dependent on the sustainable and reliable supply of electric
power. With the depletion of fossil-fuels and serious
environmental concerns, the transition towards clean and
sustainable energy technologies has become unavoidable [1].
Net metering policy has proved to be an important motivation
for the promotion of local generation systems worldwide. It
has been successfully implemented in many countries like
Italy, Belgium, Cyprus, Denmark, Netherlands, Greece,
Canada, USA and Japan [2, 3].
Net metering is a regulatory framework which mandates
the grid-tied Distributed Generation (DG) owners to offset
their energy needs partly or entirely and get paid for any extra
energy injection in the grid at net metering tariffs established
by the regulatory bodies. A consumer with generation facility
is also called a ‘prosumer’. In net metering, an electric meter
is used which spins in both directions and records the net
consumption from the grid as well as the net excess injection
of the prosumers into the grid. An alternate metering
arrangement can also be used with two simple meters for
978-1-5386-3917-7/17/$31.00 ©2017 IEEE
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Luigi Martirano, Matteo Manganelli
Faculty of Engineering
Sapienza – Università di Roma
Rome, Italy
luigi.martirano@uniroma1.it
recording the net consumption and net excess injection
separately. At the end of the billing cycle, the prosumer is
charged for the net electricity usage. If the net excess injection
is higher than the net consumption, the pecuniary benefits are
granted to the consumers at the rates pre-decided by the utility
[3–5].
The shortfall of electric power can have grave
repercussions on the development index of a country. Pakistan
has been in the list of energy deficit countries for the past
decade and various efforts have been put together in order to
bridge the energy demand-supply gap. Net metering is
introduced in Pakistan to exploit the renewable energy
resources and the local PV generation systems in particular.
This policy is anticipated to be one of the potential options, for
the residential customers, to benefit from the God-gifted solar
energy. Since its introduction in September 2015 [6], the
growth of net metering in Pakistan is not up to the
expectations due to some serious challenges in its
proliferation.
Qamar et al. [7] discussed the potential barriers to the
promotion campaign of net metering policy in Pakistan. One
of the major impediments is the unwelcoming response of the
utilities. There is a lack of technically skilled personnel and
local production of equipment required for the installation of
net-metered systems. Another setback to this policy is the lack
of public awareness. Residential consumers are oblivious of
their net metering opportunities. Currently, it is difficult to
find any fiscal evaluation study of this policy under prevailing
net metering regulations in Pakistan’s electricity market.
This work deals with the fiscal evaluation of the net
metering benefits to individual residential consumers dwelling
in apartment building under current net metering pricing
environment. The economic analysis of the proposed net
metering scenarios is carried out in the presence of building
integrated PV system. The estimation of the PV system
generation profiles is carried out by using the temperature and
average global irradiance level for Islamabad, Pakistan. The
aggregate energy demand of the building, consisting of 100
apartment units, is calculated by summing the energy demand
of the apartment units and the common area services. The
demand calculation of the apartment units is carried out by
using the load consumption patterns of the potential household
appliances with the help of Monte Carlo Simulation (MCS)
algorithms.
 The organization of the rest of paper is as follows. The rates are presented in the local currency, i.e., Pakistani Rupees
regulations of the net metering policy in Pakistan are (PKR). It is important to note that different kinds of variable
presented in Section II. The calculation of the energy demand surcharges (except for tariff rationalization surcharge) and fuel
of the individual residential units, common area services and price adjustment (FPA) charges are not considered in this
their demand aggregation is the part of the section III. The work. However, all types of fixed charges (PTV fee,
estimation of the PV generation profiles is presented in government taxes, electricity duty (ED), connection charges)
Section IV. Section V deals with different net metering case are taken into account for the calculations of energy cost of the
study scenarios and the last section concludes the paper. residential consumers. The monthly cost of energy of an
individual apartment can be expressed as in (1).
II. NET METERING STANDARDS AND REGUALTIONS IN ‫ ݐݏ݋ܥݕ݃ݎ݁݊ܧ‬ൌ  ‫ܥ‬ா௅ா஼் ൅ ‫்ܥ‬ோௌ ൅ ‫்ܥ‬஺௑ாௌ ൅ ‫ܥ‬ா஽ ൅ ‫ܥ‬௉்௏
PAKISTAN ൅ ‫ܥ‬஼஼ ൅ ‫ܥ‬ி௉஺ ൅ ‫ܥ‬௏ௌ ሺͳሻ
“National Electric Power Regulatory Authority where,
(Alternative & Renewable Energy) Distributed Generation and
Net Metering Regulations, 2015” mandate the DG owners, ‫ܥ‬ா௅ா஼் ൌ Cost of electricity units consumed in a month (PKR
solar and wind generation (1 kWp up-to 1 MWp), to meet /kWh)
their own energy needs and get paid for any excess energy
‫்ܥ‬ோௌ ൌTariff rationalization surcharge (PKR /kWh)
injection in national grid after getting licensed from the
concerned utility. As per these regulations, no monetary ‫்ܥ‬஺௑ாௌ ൌGovernment taxes (GST – % of monthly cost of
benefits are given to the DG owners for annual excess energy electricity)
injection in the grid [6].
‫ܥ‬ா஽ ൌElectricity duty (% of monthly cost of electricity)
Islamabad Electric Supply Company (ISECO) is the utility
which provides the electricity to the consumers of Islamabad ‫ܥ‬௉்௏ ൌ Pakistan Television fee (PKR /connection)
and adjacent areas. Two types of electricity tariffs [8] are used ‫ܥ‬஼஼ ൌ Connection charges (PKR /connection)
for the economic analysis of the proposed net metering
schemes. ‫ܥ‬ி௉஺ ൌ Fuel price adjustment charges (variable)
• General Residential Supply Tariffs are currently ‫ܥ‬௏ௌ ൌ Variable surcharges (variable)
used for billing the individual residential customers.
III. AGGREGATION OF RESIDENTIAL BUILDING DEMAND
• Single-Point Bulk Supply Tariffs are used for billing
the aggregate energy demand of the entire residential The building under analysis consists of 10 floors, 100
building. residential units and 3 sets of stairs and elevators. The
residential apartments are subcategorized into four types with
TABLE I. ELECTRICITY TARIFFS FOR IESCO CONSUMERS [8] respect to the contract power and the occupancy level of the
Fixed
Variable
Tariff apartment dwellers. The composition of the residential
S. Tariff Charges
Charges
rationalization building is presented in TABLE II. The details of power
No. Particulars (PKR/kW Surcharge demand calculations of the residential apartments and the
(PKR/kWh)
/Month) (PKR/kWh)
common area services, inside the building, are presented in the
General Residential Supply Tariffs
following sub-sections.
a. Sanctioned load < 5 kW
i) Up to 50 Units - 2.00 - -
Consumption > TABLE II. COMPOSITION OF THE RESIDENTIAL BUILDING
50 Units
Number of
ii) 1-100 Units - 5.79 - - Apartment Contract
Apartment Class Residential
iii) 101-200 Units - 8.11 - - Type Power (kW)
Units
iv) 201-300 Units - 10.20 - - Economy 35 04
Family
v) 301-700Units - 13.00 - 3.00 Apartments Standard 35 05
vi) Above 700 Units - 15.00 - 3.00
Couple Economy 15 02
Sanctioned load The peak time ranges between
b. Apartments Standard 15 03
• 5 kW 1700 and 2100.
Off- Off- Common Lighting 3 stairs and 3
Time of Use Peak Peak 10
- Peak Peak Area & elevator elevators
(ToU)
15.00 9.25 3.00 3.25
Single-Point Bulk Supply Tariffs A. Apartments Power Demand
For Single-Point Off- Off- The power demand of the individual apartment is
Bulk supply at Peak Peak
400/230V and 5
400 Peak Peak calculated by modeling the household appliances’
kW-500 kW 15.00 9.25 3.00 3.25 consumption pattern based on their ownership rate, probability
As per the net metering regulations 2015, the surplus of use, operating characteristics and probability of time of use.
energy is credited at off-peak tariffs. TABLE I presents the The power demand of a residential unit depends on the
details of the tariffs (for IESCO consumers) used in this work. standard of living of the occupants, the number of dwellers
The peak time starts from 1700 and lasts till 2100. All the living in the apartment, type of electrical appliances used and

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 the seasonal variations in the locality [2, 9]. The load profiles ሺʹu‫ܨܮܯܣ‬u‫ܨܦܶܣ‬u‫ܧ‬ௌை஼ ൈ ሺͳ െ ‫ܨܤ‬ሻ ൈ ݊ሻ
of the potential household appliances presented in [9], [10] ‫ ܧ‬ൌ ‫ܧ‬ௌ ൅ ሺʹሻ
ͳͲͲͲ
and [11] are used for modeling the power demand of different where,
types of apartments in the residential building. Monte Carlo ݊
‫ܧ‬ௌ ൌ ͲǤͲͲͳ ൈ ܲௌ ൈ ቀͺ͹͸Ͳ െ ‫ ܨܦܶܣ‬ൈ ‫ ܪ‬ൈ ቁሺ͵ሻ
Simulations (MCS) and Normal Probability Distribution are ͵͸ͲͲ ൈ ‫ݒ‬
used for calculating the aggregate demand of all apartments in
the building. All the simulations are performed in MATLAB ‫ܧ‬ௌ ൌ Energy of elevator’s standby operation (kWh)
R2010a. A comparison of the load profiles of different types ‫ܧ‬ௌை஼ ൌEnergy of single operating cycle of elevator (Wh)
of apartments for a typical day is presented in Fig. 1. ‫ ܨܮܯܣ‬ൌAverage Motor Load Factor
‫ ܨܤ‬ൌBalancing Factor
‫ ܨܦܶܣ‬ൌAverage Travel Distance Factor
‫ ܪ‬ൌElevator’s rising height (m)
݊ ൌNo. of yearly trips
ܲௌ ൌStandby Power (W)
‫ ݒ‬ൌSpeed of elevator (m/s)

2) Calculations of lighting demand inside building

The lighting demand inside the building subsumes the
lighting load of stairs-elevator, common rooms/meeting
rooms, hallways/passageways, indoor sports facilities, indoor
swimming pools, and general lighting load of the building. In
this work, only stairs-elevator lighting load and general
building lighting load are considered.

Fig. 1. Comparison of the consumption patterns of different types of

apartments.

B. Common Area Services Power Demand

The common area services demand consists of the elevator
demand and the demand of common lighting load of the
building. Following sub-sections briefly expound the
procedure used to carry out the calculations of common area
services energy demands.
1) Calculations of elevator demand
In Europe, geared traction elevators are commonly used
for residential buildings [12]. Due to the unavailability of data
for elevator technology used in Pakistan, geared traction
elevators’ data from [12] is used for demand calculations of Fig. 2. Energy demand for common area services of the residential
elevator in this work. The elevator demand depends on building for a typical day.
elevator speed, load on the elevator, motor power, and rise
height of elevator. The total elevator demand accounts for the The lighting load of a building constitutes the main portion
standby demand and the running demand during descending of the common area services energy demand. The availability
and ascending operating modes of the elevator. The procedure of the sunlight influences the ON/OFF operation of the
presented in [12, 13] is used for calculating the elevator lighting load [2]. To make the calculations simple, 300
energy demand. The parameters used to carry out the elevator W/floor (stairs-elevator and general lighting load) is
demand calculations are presented in TABLE III. considered for lighting demand calculations inside the
building. Fig. 2 presents the energy demand of common area
TABLE III. PARAMETERS FOR ELEVATOR DEMAND CALCULATIONS [12,13]
services.
Parameters Value Parameters Value
C. Aggregate Energy Demand of Building
AMLF 0.35 n 62300
The aggregate energy demand of the residential building is
ATDF 0.30 H 17 m
the sum of the demand of residential apartments and the
ESOC 50.4 Wh v 1 m/s common area services inside the building. Fig. 3 shows the
BF 0.50 PS 163.8 W aggregate energy demand of the residential building for a
The yearly energy consumption of the elevator is typical day. TABLE IV presents the annual energy demand per
calculated using (2) and (3):

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 apartment of different types of apartments and common area where,
services demands of the residential building.
ܲ஺஼ ൌAC power generated from PV system (W)
TABLE IV. ANNUAL ENERGY DEMAND PER APARTMENT OF DIFFERENT ܲோ஺்ா஽ ൌ Installed capacity of PV generation system (1-100
APARTMENT TYPES AND COMMON SERVICES kWp)
Apartment
Apartment Class
Annual Energy Demand per J ൌ Power temperature coefficient (0.007)
Type Apartment (kWh)
‫ ܩ‬ൌ Global irradiance on fixed plane (W/m2)
Family Economy 2680.088
Apartments Standard 3472.784 K஽஼ି஺஼ ൌDC to AC conversion efficiency of inverter (95 %)
Couple Economy 1933.778
Apartments Standard 2457.844 ܶ஺௏ீ̴஽ ൌ Average day time temperature (°C)
Common Area Services 10106.03/stair-elevator
ܱܰ‫ ܶܥ‬ൌ Normal operating cell temperature (45 °C)
The PV system generation profiles for a typical day are
shown in Fig. 4.

Fig. 3. Aggregate demand of the residential building for a typical day.

Fig. 4. Generation profiles of PV system with 100 kWp for typical day of
IV. ESTIMATION OF PV POWER PROFILES each month.

The estimation of the PV system power generation profiles

V. CASE STUDY APPLICATION
is carried on the basis of the temperature and average global
irradiance level for Islamabad, Pakistan. PVGIS online tool is
A. Case Study Scenarios
used to obtain the global irradiance on a fixed plane data [14].
The estimation of the PV system generation profiles is carried For the fiscal analysis of the net metering regulations in
out using the procedure presented in [2]. The parameters used Pakistan, following case studies are taken into account:
to estimate the AC power of PV system are presented in Case 1: Net metering in the absence of local PV generation
TABLE V. (base case scenario)

TABLE V. PV SYSTEM PARAMETERS [2] Case 2: Net metering in the presence of local PV
generation:
S. No. Parameters Value
a. Net metering applied on the common area services
1 PVGIS radiation database Classic PVGIS
only and apartments are billed individually.
2 PV technology Crystalline Silicon
3 Tilt angle of PV module 34 degrees b. Net metering applied on the common area services
only and the apartments are billed on the basis of
4 Mounting position of PV module Free-standing
aggregate building demand.
5 Estimated system losses 14%
PAC can be calculated by using (3): c. Net metering implemented on the aggregate energy
demand of the entire building.
ͳJu'ܶ஼
ܲ஺஼ ൌ ͲǤͻʹ ൈ ܲோ஺்ா஽ ൈ ‫ ܩ‬ൈ K஽஼ି஺஼  ൈ ൬ ൰ሺ͵ሻ Case 1 is taken as the base case. In Case 1 and Case 2a,
ͳͲͲͲ
General Residential Supply Tariffs are used to compute the
surplus energy credits and the energy cost of the individual
ሺܱܰ‫Ͳʹܶܥ‬ሻu‫ܩ‬ residential units and the common area services. Off-peak
'ܶ஼ ൌ ቤʹͷሺܶ஺௏ீ̴஽ ൅ ሻቤሺͶሻ General Residential Supply Tariffs are used to calculate the
ͺͲͲ excess energy credits. In Cases 2b and 2c, Single-Point Bulk

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 Supply Tariffs are used to compute the surplus energy credits
and the energy cost of the aggregate energy demand of the
residential building and off-peak Bulk Supply Tariffs are used
to recompense the excess energy injection in the grid. The
comparison of the results of net building expenditure and the
savings of different case studies is presented in Fig. 5 and Fig.
6.
Fig. 5. Comparison of net energy cost of the entire building for different
case study scenarios.
Fig. 6. Comparison of average annual savings per apartment with
different capacities of installed PV generation system.
B. Discussion on Results
It is obvious from Fig.5 that the energy cost of the building
based on Single-Point Bulk Supply Tariffs is relatively high as
compared to the base case scenario. There is no significant
reduction in the net energy expenditure curves of Case 2a and
2b with installed capacity of PV system when compared with
that of base case scenario. However, a significant decrease in
the energy expenditure of the building with the increasing PV
installed capacity can be observed from the curve of Case 2c,
where the energy cost curve exhibits a substantially decreasing
trend up-to 50 kWp installed capacity and afterwards it
decreases gradually.
The average annual savings per apartment are shown in
Fig. 6. The annual savings per apartment for Case 2a increase
with installed PV capacity up-to 50 kWp and remain same
(3560 PKR/year) for all higher values of installed capacity.
The reason is the constraint imposed on the annual excess
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energy injection in the grid. As per net metering regulations
2015, the annual excess energy injection cannot exceed the
annual energy consumption. For Case 2b, the annual savings
per apartment remain negative for all values of installed PV
capacity. The annual savings per apartment first increase up-to
50 kWp and afterwards remain the same (െ10146 PKR/year)
for all higher values of installed PV capacity in Case 2b which
makes it totally unfeasible for the occupants of the building.
For Case 2c, the annual savings increase for all PV installed
values and positive savings are observed for PV capacity more
than 80 kWp. It is worth noting that the energy cost based on
Single-Point Bulk Supply Tariffs is relatively high as
compared to that calculated on the basis of General
Residential Supply Tariffs and the net metering (Case 2c) on
aggregation level is uneconomical for PV installed values less
than 80 kWp. Furthermore, the economic benefits of this
policy may vary with geographical location and with
customers’ type. Since the irradiance level changes with the
geographical location and, the diverse energy consumption
behavior of different types of consumers also differs.
VI. CONCLUSIONS
Net metering policy is one of the potential options for
residential consumers to benefit from the local PV generation.
In order to provide the economic analysis of the current net
metering regulations in Pakistan, a case study is presented in
this paper. In this context, the demand aggregation of a
residential building consisting of 100 residential apartments
and common areas is carried out by calculating the individual
apartment demand based on daily energy usage of the
occupants. The economic evaluation of the proposed net
metering scenarios is carried out in the presence of BIPV
system under current net metering regulations for Pakistan.
The results illustrate that the net energy expenditure of the
building is higher when the electricity cost is calculated on the
aggregate level based on the Single-point Bulk Supply Tariffs
as compared to the individual billing based on the General
Residential Supply Tariffs. The net metering policy is found to
be beneficial up-to a certain value of PV capacity (50 kWp)
when it is implemented on the common area services. On the
other hand, when it is applied on the aggregate demand of the
entire residential building, there is a threshold value of PV
capacity (80 kWp) above which the positive annual savings are
observed. It is vital to remember that the capital investment on
the installation of PV system and the net metering equipment is
not considered insofar as the scope of this work is concerned.
The actual fiscal benefits to the individual consumers can only
be appraised by taking the capital investment into account.
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