Advanced Research in Economics and Business Strategy Journal
Volume 7, Numéro 1, Pages 339-351
2026-06-30
Punishing Participation: Behavioral Repercussions Of Pakistan's Net Billing Reform For Its Decentralized Green Transition
Authors : U-din Shahab- .
Abstract
Pakistan’s citizen-led solar expansion importing 17 GW of panels in 2024 was driven by high retail tariffs and a net metering regime that compensated exported electricity at near-retail rates. In March 2025, regulators moved to replace net metering with net billing, reducing the export buyback rate from roughly Rs 27/kWh to Rs 10–13/kWh, citing cross-subsidies from solar adopters to non-solar consumers. This paper analyses the reform not as a neutral tariff adjustment but as a behavioral intervention, applying insights from loss aversion, the endowment effect, psychological reactance, mental accounting, and institutional trust. It predicts that consumers will perceive the sharp rate reduction as a confiscated entitlement, triggering battery-led partial grid defection, slower new adoption, intensified self-consumption at system cost, and erosion of regulatory credibility. While the cross-subsidy concern is legitimate, a blunt net billing regime penalizes solar adoption itself rather than its unequal access. The paper proposes an equity-sensitive alternative: a graduated five-year export-rate phase-out, income-tiered buyback rates, grid-connected storage incentives, community solar, and a transparent value-of-solar tariff. This package corrects distributional inequities, preserves investor confidence, and sustains Pakistan’s decentralized clean-energy trajectory without a behavioral backlash.
Keywords
Behavioral economics ; green energy transition ; cross-subsidy ; climate policy, regulatory trust
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