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The benefits of solar energy and net metering

The energy prices have started to increase again. The increase in the global crude price will increase fuel price in Pakistan. In addition to this, it will also increase the price of imported LNG. The price of imported LNG is linked to the price of crude. It’s a great cause of concern that in Pakistan with presence of cheaper sources of energy, we are using expensive energy options. The government is primarily focused on the plants dependent on the imported fuel, i.e. imported LNG and imported Coal.

Pakistan is full of potential of alternate renewable energy resources, i.e. solar, wind, hydel etc. From the available options of the renewable energy; the installation of the solar energy is the most suitable option for the domestic customers. The solar panels can be installed on the roofs of the houses/offices/buildings. According to the studies, Pakistan has 2.9 million Mega Watt of solar energy potential. But we are using only 400-500 MW of this huge potential.

In this article, we will discuss the advantages of installation of solar panels by the domestic customers. The domestic customers can install solar panels on their buildings and save a lot of money. The installation of the solar panels with the battery backup option is very expensive. The best option for the domestic solar panel usage is the Net Metering System. The excess energy produces by the solar panels during the daytime can be exported to the National Grid and the customer will buy back the energy from the grid in the evening. At the end of the month, the both export and import of energy will be calculated. The bill will be prepared on the basis of Net Energy purchased by the customer.

The government has taken some initiatives for installation of solar panels on the roofs of the plaza and office buildings but these are not fruitful. The customers cannot take full benefit of the solar without proper installation and launch of the net Metering System.

The installation of one MW Solar Plant needs approximately 3 acre land. The house having a free roof of 500 square feet can install the solar panels of capacity 3.8 kW. These panels will cost Rs267,400 and annual saving will be Rs79,716 resulting in a payback of 3.35 years. The following data points explain the savings for the installation of the solar panels with the option of the Net Metering.

  • Land Required for 1 kW Solar: 131 square feet
  • Approx. Space available by one consumer: 500 square feet
  • Solar panels installed at one consumer house/ building : 3.82 kW
  • Solar energy to be produced @ 85% Cell Efficiency: 3.25 kW
  • Annual Energy Generation @ 17.5 % Capacity Factor: 4,982 kWh
  • Average cost of electricity supplied by the DISCO: Rs. 16/kWh
  • Annual saving for One User: Rs. 79,716
  • Cost of solar panels: Rs. 70,000/kWh
  • Cost for one consumer @ 3.3 kW: Rs. 267,400
  • Pay back of the investment: 3.35 years
  • Potential consumers in Pakistan (no.): 500,000
  • Capacity that can be installed by potential consumers: 1,910 MW
  • Total investment by 500,000 consumers: Rs. 133.70 billion
  • Annual generation from small solar producers: 2,491 million kWh
  • Saving of Transmission & Distribution Losses @ 15%: 373.67 Million kWh

 

Advantages:
  • Saving for the electricity consumers
  • Uninterrupted supply of electricity
  • Reliance on indigenous resources
  • Reduction in consumption imported fuel
  • Green & clean electricity
  • Less load of DISCOs transmission system
  • Saving of Transmission & Distribution (Line) Losses
Challenges:
  • The process of approval is too much lengthy and complex for the net metering.
  • Ensure the power is generated from the solar panels only.
  • System reliability and protection.
  • Problem in system isolation (safety issue for the DISCOs staff).
  • Unavailability of loans for these projects.

The following initiatives need to be taken immediately to use the available resource without further wastage:

  • Make the Net Metering System approval and installation procedure easy and one window.
  • Make law and allow banking institutions to give loans for these types of investments.
  • Make necessary amendments in the DISCOs working procedures for the Safety of their personnel.
  • Start awareness campaign on the potential of the solar panels.

It would be better for the energy sector of the country that all regulatory agencies should be on the same page to give the investor confidence to invest. The government should make policies to facilitate the customers. We hope, by simplification of the installation of the Net Metering System, approximately 2,000MW of clean solar energy can be added in the system without any investment by the government. With the passage of time and confidence of the people, the solar energy through net metering can be increased to 10,000MW.

Muhammad Farhan is an engineer by profession and has been working in the power sector since 2007. twitter: @farhan6309902

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