For most of 2026, a household in Lahore or Peshawar that wanted to connect a rooftop solar system to the grid has had to deal with two regulators of a sort. The first was the familiar one, the distribution company that owns the transformer outside the house and installs the meter. The second was the National Electric Power Regulatory Authority, which the Prosumer Regulations of 9 February 2026 placed at the end of every application as the body that had to accord concurrence before billing could begin. Two amendments since then, one in April and one in August, have taken the regulator back out of the small end of the market. Systems of 25 kW or below now need neither a NEPRA fee nor NEPRA concurrence, and the DISCO grants the approval itself.
That sounds like a simple return to the old arrangement. It is not quite that. The DISCOs are getting the approval power back under a rulebook that is far more demanding of them than the one they administered before, and that also gives them a new and quite blunt tool for refusing connections. Whether the change speeds rooftop solar up or simply moves the queue from Islamabad to the circle offices depends on how that rulebook is applied.
How the approval moved, and moved back
Dawn's account of the April decision sets out the sequence clearly. Under the 2015 regulations, distributed generation of 25 kW or below did not need a licence from NEPRA, and applications were processed directly by the DISCOs without any fee. The February 2026 Prosumer Regulations changed that. They centralised approval with the regulator and attached a one-time fee of Rs1,000 per kW to every concurrence application, small or large.
The reaction was quick. According to Dawn, the Pakistan Solar Association, the Pakistan Alternative Energy Association and two private firms objected at public hearings that taking approval away from the DISCOs would create unnecessary hurdles, and the Private Power and Infrastructure Board asked NEPRA to keep consistency with the earlier regime for small systems. A social media campaign accused the government of "taxing sunlight". On the instructions of the power minister, the Power Division formally asked NEPRA to drop the requirement, and within two days, on 28 April 2026, the regulator notified a revised fee schedule. Facilities of 25 kW or less pay nothing. Facilities above 25 kW pay Rs1,000 per kW once. The notification was made effective from 9 February 2026, so it applied backwards to everyone who had applied since the regulations came into force.
The fee was only half of the burden, however. Small prosumers still needed NEPRA concurrence under regulation 4, which meant the DISCO had to forward the agreement, proof of fee and an affidavit to the regulator, and the regulator had up to seven working days to respond. NEPRA published a draft amendment for comment in April and notified it on 6 August 2026. It inserts a proviso into regulation 4 stating that a prosumer with a facility of 25 kW or below "shall not be required to seek concurrence from the Authority and the concerned licensee shall accord its approval". The words "or approval" are added next to "concurrence" in the provisions that govern when billing starts and when a fresh sign-off is needed. Business Recorder and The Nation both reported the change as a removal of the regulator from routine household and small business approvals.
What the DISCO now has to do
The interesting part is what the DISCO inherits. The February regulations did not just move approval to NEPRA. They also wrote a detailed timetable for the DISCO's own steps, and that timetable still applies.
Within five working days of receiving an application, the DISCO must acknowledge it and say whether it is complete. The applicant then has three working days to supply anything missing. An initial technical review must be finished within fifteen working days. If the system is found not to be feasible, the reasons must be communicated within three working days of that review. If it is feasible, the agreement must be signed within seven working days, a copy sent to NEPRA within seven working days of signing, and a connection charge estimate issued within seven working days of the agreement. The prosumer has seven working days to pay, and the DISCO then has fifteen working days to install and commission the interconnection, including the meter. Even the request for information is timed. The DISCO must provide the approved documents free of cost within two working days.
Regulation 5 adds that approval of the interconnection "shall not be unreasonably withheld". The DISCO keeps the right to review designs and inspect installations before parallel operation, and it is told to introduce validation checks to catch unlawful extensions of a system after approval. A prosumer who changes the technical parameters of a facility needs a fresh sign-off, which for small systems is now the DISCO's to give.
On paper this is a strong consumer protection. In practice, the regulations contain no penalty schedule for a missed deadline. A DISCO that takes twenty working days rather than fifteen over its initial review is in breach, but the remedy for the applicant is a complaint, not an automatic approval. With NEPRA concurrence gone for small systems, the regulator also loses the one point at which every small file used to cross its desk. It will still receive copies of signed agreements, but it will not routinely see applications that were stalled or returned before an agreement was ever signed.
The 80% ceiling
The rule that matters most for the next phase of rooftop growth is a single proviso in regulation 3(5). It says the DISCO "shall not entertain any application if the distributed generation capacity connected to a particular distribution transformer has reached 80% of its rated capacity".
This is a hosting capacity limit applied at the most local level of the network. It makes engineering sense. A distribution transformer is sized for the load downstream of it, and when solar output on a sunny afternoon exceeds that load, power flows back up through equipment that was not planned for it. Voltage rises, protection settings can misbehave and the transformer can overheat. A ceiling expressed as a share of rated capacity is a crude but legible way of preventing that.
The difficulty is that the rule is administered by the same company that decides whether an application is complete, technically feasible and approved. The applicant has no independent means of checking how much solar is already connected to the transformer serving the street, or what its rated capacity is. A refusal on the 80% ground is final in practice unless the consumer challenges it, and there is no published register against which to test the claim.
Two features of the regulations make this sharper. First, the 80% test counts connected distributed generation capacity, so the earliest adopters on a transformer use up the headroom and later applicants on the same street are turned away, whatever their own load. In affluent urban neighbourhoods, where adoption has been fastest, the ceiling will be reached first. Second, the cap on each system is tied to the applicant's sanctioned load under regulation 3(2), and NEPRA keeps the power to revise that cap by notification. Between the two limits, the effective size of the rooftop market on any feeder is set by decisions the consumer cannot see.
Nothing in the regulations obliges the DISCO to upgrade a transformer that has reached the ceiling, or to tell the applicant when headroom might return. The consumer's choice is then to wait, to install a system that is not connected to the grid, or to add batteries and use the grid less. The last of these is the outcome the network can least afford, because it removes sales without removing the fixed cost of the wires.
What the small prosumer actually gets
It is worth being clear about what a household is applying for. New connections are billed under net billing, not the old net metering. Under regulation 14, units the DISCO supplies to the prosumer are charged at the applicable tariff, and units the prosumer supplies to the DISCO are credited at the national average energy purchase price. If the credit in a billing cycle exceeds the charge, the balance is carried to the next cycle or paid out quarterly. The agreement runs for five years from commissioning and can be renewed for further five-year terms only by mutual consent of the DISCO and the prosumer. Agreements signed under the old regulations keep their earlier billing basis until they expire and then move to the energy purchase price on renewal.
The DISCO can also limit or disconnect a facility at any time in the event of a fault, and on thirty days' written notice for maintenance, for non-compliance, or when the agreement ends or expires. Systems of 250 kW or above must submit a load flow study, but those are well beyond the 25 kW threshold that the August amendment covers.
The economic offer, in other words, is smaller than it was under net metering, and the administrative path is now shorter. Those two changes pull in opposite directions for the household deciding whether to connect.
What would make the handover work
Three changes would let the DISCO approval regime do what the amendment intends.
The first is publication. Each DISCO should publish, at least feeder by feeder and ideally transformer by transformer, the rated capacity and the distributed generation already connected. That turns the 80% rule from a discretionary refusal into a fact an applicant can check before paying an installer. It would also give planners a reliable measure of where solar has concentrated, which the national figures cannot show.
The second is reporting against the timetable. The regulations already set a deadline for each step. NEPRA could require DISCOs to report, quarterly and by circle, how many applications were received, how many were completed within each deadline, how many were refused and on what ground. Refusals under the transformer ceiling should be counted separately. Without that, nobody outside the DISCO will know whether the handover has shortened the queue or simply hidden it.
The third is a path for saturated transformers. Where the ceiling has been reached, the applicant should be told so in writing, with the rated capacity and the connected solar, and offered either a place in a queue for an upgrade or the option to pay towards one. A ceiling with no route past it is not a technical safeguard. It becomes a moratorium by another name.
The August amendment is a sensible correction to a February rule that put a national regulator in charge of approving three-kilowatt rooftops. But the power it returns to the DISCOs comes with a tool that can close a street to new solar without any public record of why. The test of the new arrangement over the coming winter will not be whether approvals are faster on average. It will be whether a household turned away at the 80% line can find out that the line was really reached.