Pakistan has approved net metering as part of a raft of new policies that could boost the development of solar in the country.

The government also officially eliminated an import tax on solar equipment, as previously reported, and has developed a financial mechanism to allow homeowners to borrow against their mortgage to fund a solar installation.

"[Net metering] will help scale up demand for solar energy across Pakistan, and we hope the increased demand will also result in sufficient decreases in the price of solar equipment,” Reuters quoted Asjad Imtiaz Ali, chief executive officer of the Alternative Energy Development Board, as saying.

Draft rules for net metering published in October limited the programme to installation between 1kW and 1MW in size. 

The new finance scheme, open for five years, will enable homeowners to borrow up to US$50,000 for an installation at a low interest rate.

In December, Prime Minister Nawaz Sharif confirmed that a controversial 30% import tax on solar equipment would be removed. The imposition of the tax had left some in the industry fearing its “total collapse”.