In September of 2015 National Electric Power Regulatory Authority (NEPRA) introduced a new billing mechanism for consumers termed as “net metering”. This scheme enables commoners to sell and distribute excess electricity acquired through wind or solar power. This was hailed as revolutionary initiative and indeed it was. The entire game plan was intended to promote alternative and renewable energy. It also had a great potential to empower consumers, create jobs, and generate private investment.
But consumers have barely adopted green energy. A great majority of residential rooftops are still void of solar panels and each rooftop represents wasted potential; around10 hours of daylight every day. By far and large it seems consumers have barely shown interest in solar energy as a means to mitigate power outages and electricity price hikes. Lahore Electric Supply Company (LESCO) has issued only230 net metering licenses since August 2016. And, according to research by International Finance Corporation (IFC),power generation in Pakistan continues to rely heavily on fuel oil which is the source of 37 percent of electricity generation. Renewable sources currently make up only 1 percent. This of course means that electricity price is highly prone to oil rate fluctuations which in turn is also affected by the movement in value of rupee against the dollar.
Pakistan continues to face electricity shortages of upto 6,000 MW but residential consumers have yet to embrace renewable energy sources even though there are many economic benefits on the table. For an average consumer, solar and wind power are just options. What matters most is the output; the final product. Renewable energy is acquired through processes which are radically different from non-renewable sources but both achieve the same thing. Perhaps the major reason for not considering solar power is the heavy price tag of solar equipment which mainly includes solar panels, batteries, and a power inverter. The cost for installing a solar system on a double story house measuring 10-marla (2,722 square feet) can range anywhere from Rs 750,000 to Rs 900,000. And even at this price tag you cannot expect to run every household appliance. If one is lucky enough they might expect to use solar power energy to run just about everything including one refrigerator and an air-conditioner.
Majority of people may not be able to afford investment in renewable energy. They can benefit from power purchase agreement (PPA) which stipulates that the vendor pays for the installation of all equipment while the consumer agrees to have all hardware installed on their premises and pay for the electricity consumed through the solar equipment for a fixed-term
Buying solar panels is a high-involvement decision. Customers really need to educate themselves before considering this option. They have to make cost-benefit analysis and weigh in on all pros and cons before making the purchase. Vendors are often very cooperative in this respect and can carry out detailed simulation using software to tell you exactly how much energy you can generate. But even with all this, buying solar equipment can become very complicated. There are other factors that need to be taken into consideration. For example, installing panels can take considerable real estate and many households struggle with space. Rooftops are often used for recreational purposes and a lot of space needs to be relinquished to sunbathing invaders. Homes slightly smaller than 10 marlas may sometimes require more investment because they have smaller rooftops and thus require more efficient and more expensive sun panels. Most photovoltaic modules are only 15 to 20 percent efficient; which means that only 15 to 20 percent of light hitting on them is actually converted into electricity.
But once installed consumers have to barely worry about anything else. Quality solar power systems require little maintenance which primarily involves cleaning solar panel units. This should only be done during the night hours with water and they should be wiped clean. During daylight the surface temperature of the modules can get extremely high and if it encounters water it may result in development of heat pockets leading to deterioration of the equipment. Wet cell batteries also require regular maintenance and they often have to be replaced after every year. When batteries ‘weaken’ they also limit energy output of the entire solar power equipment. Vendors recommend using dry cells instead to prolong the life of storage unit by upto three years.
Majority of people may not be able to afford investment in renewable energy. They can benefit from power purchase agreement (PPA) which stipulates that the vendor pays for the installation of all equipment while the consumer agrees to have all hardware installed on their premises and pay for the electricity consumed through the solar equipment for a fixed-term. At the end of this term, depending on the contractual agreement, the consumer may become the owner of the equipment. PPA, however, has rarely worked in Pakistan. Only a few vendors have introduced this scheme and have largely experienced difficulty in exercising the terms and conditions.
The agreement often ranges from 10 to 20 years and very few financial institutes are willing to step in to offer loans for equipment purchase.In this long period of time it becomes rather difficult to hold true to one’s word and consumers often default on their payment, sometimes, deliberately
Purchase of solar energy equipment should always be thought of as investment especially considering that it can be used to make money under the net metering scheme. In the long run one can expect to earn handsome dividends while playing a part in reducing greenhouse emissions. There is no doubt that renewable energy places a far less strain on the environment. As consumers we should play a part in minimizing our carbon footprint; such collective action on a national scale can play a pivotal role in safeguarding nature’s most valuable gifts and ensure a clean, safe and healthy environment for future generations.
The writer has an MBA from LUMS and has been working as a professional writer for 7 years. He can be reached at [email protected]
Published in Daily Times, October 30th 2018.