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Rooftop solar solution

Pakistan’s topography and climatic conditions are ideal for the utilization of solar energy at its maximum level. Geographically, Pakistan lies in the sun-belt and receives massive amounts of sunlight all through the year. Therefore, it is very important to exploit the existing solar energy resources. Solar energy can lessen the pressure on the federal budget which is being used for importing expensive fossil fuels, especially oil and RLNG. The use of solar energy is only limited to solar PV, solar water heaters, solar geysers, solar cookers and solar pumps in Pakistan.

Solar PV Rooftop market potential for Pakistan has been assessed as 10,000 MW by taking the total area under urban settlements. Solar rooftop has emerged as an achievable goal for residential, commercial and industrial sectors. Residential and commercial sectors top in numbers in rooftop installation in most of the countries. By year 2021, self-consumption mode of implementation will increase many folds. Soft loans, tax credits, role of DISCOs and market based mechanisms will play dominant roles in encouraging peoples’ participation.

Solar photovoltaic rooftop has emerged as a potential technology to address various issues related to fuel based power plants and can help reducing the reliance on imported fuel based energy. Besides reliance on imported fuel, the climate change threats are also very mush there where solar power can help reducing the greenhouse emissions. There is no doubt that solar PV energy is one of the cleanest sources of electricity. A solar photovoltaic (SPV) power plant consists of different components i.e., photovoltaic modules, mounting system, dc–ac converter and electrical connections.

The rooftop solar systems are smaller PV systems in comparison to land mounted ones, installed on rooftops of residential, commercial or industrial building complexes. It comprises of solar inverter, meters for regulating electricity generated and various components for modification of electrical output and input rate in kWp. The electricity generated from such systems could either be entirely fed into the grid or used for self-consumption with the net metering approach. A metering policy has been introduced to encourage self-consumption of electricity generated from the solar rooftop. A net metering mechanism allows for a two-way flow of electricity wherein the consumer is billed only for the ‘net’ electricity (total consumption lessown PV production) supplied by the concerned DISCO. Such systems could be installed with one integrated net meter or two separate meters, one for export to grid and one for self-consumption. The government has announced several initiatives to promote renewable energy. Direct and indirect tax benefits such as sales tax, excise duty exemptions and custom duty exceptions have been also been given. Project developers were exempted from income tax on all earnings from a project.

Solar energy technologies have made significant progress and are considered an option for meeting energy needs in a sustainable manner. The main barriers faced by rooftop solar sector include lack of awareness among consumers about the system, lack of manufacturing facilities, lack of skilled workforce, high upfront cost and lack of business models and regulatory challenges.

Consumer awareness about the rooftop solar project and its market acceptance is the most significant challenge in promoting solar energy, which is having a social bias. In a developing country affordability in residential sector is much lower than in an advanced country, where over 50 percent use of rooftop solar is growing in the residential sector. The consumer not only has greater affordability and awareness about the consumer’s rights, but is also facilitated with dynamic policy instruments which are consumer friendly. In under-developed countries people are less aware of the government policies and the available incentives.

 

Being cleanest source of energy its climate change imperatives are not fully understood. Consumer guidance centers to educate about placement and function of meters, process for metering and interconnection with grid as well as maintenance are needed so as to achieve the potential of rooftop. Manufacturing capabilities of solar cells, inverters and storage systems for improving performance of rooftop solar equipment require investment in basic research on materials and industrial R&D. Global R&D spending on RE was over 15 billion in 2017-18 with solar research having a share of over 50 percent. In solar PV the emphasis has been on improving energy output of PV cells and efficiency of cell production. USA, Japan and Europe have been the largest centers for R&D in solar and were early starter too. The corporate R&D investment in solar energy exceeded the government R&D, Today China is world’s biggest investor in solar R&D.

With the phenomenal growth taking place worldwide and dependence on imports is growing whereas corrective measures are needed. Pakistan should take initiative in promoting manufacturing of solar equipment in the country. For this purposes, if government has to provide capital at very cheap rates for investment purposes that would be worth investment.

Rooftop solar installation technology in urban or rural areas requires intervention for (i) Grid connected solar installation; (ii) Solar system synchronized with diesel genset (iii) Off-grid solar installations with battery back-up. Designing of a rooftop solar system according to the local conditions requires basic engineering skills. A good design would integrate the location specific parameters with rooftop solar system, therefore it has a great potential to become a job creation industry. Skill workforce requirement for installation, maintenance and repairs is expected to grow in future.

High capital cost of rooftop solar system which is presently estimated as PKR 85,000/kW (on the lower side) has been a key challenge for its adoption by the industry or small consumers. The payback period is 7 to 8 years and 9 to 10 years in commercial and residential sectors, respectively. The success of rooftop solar therefore remains dependent on new business models evolved from time to time to overcome the cost barrier. At present three types of business models are envisaged;

(i) Self owned, the roof owner owns the PV system and electricity generated. It is called CAPEX model and the risk is of the owner who invests in the system.

(ii) Third party ownership, in which third party or a developer bears the cost of solar rooftop and sells to customer at a rate lower than grid tariff. This is called OPEX (operational expenditure) model because developer which is also renewable energy company pays for the system for specified number of years and also owes the risk. Third party investment model has only 10 percent share at present in Pakistan. It is yet to pick up because of high contract default risks arising from rapid declining cost of solar energy.

(iii) The third is Lease model in which customer leases the system and pays for it overtime.

To make rooftop solar an attractive proposition State Bank of Pakistan has joined hands with the banks and financial institutions to provide soft loans. New business model for rural areas & villages are proposed to increase coverage of rooftop solar system in Pakistan. Generally losses due to longer transmission lines require to reach remote villages increase the cost of electricity in the rural areas. The government or DISCO has to bear the loss.

Though high growth is expected in rooftop solar systems and cost will reduce in coming years, it is to be noted that unlike thermal power plants, rooftop solar generation is consumers dominated and therefore peoples’ participation and acceptance are critical issues for its success. At the national level, manufacturing capacity, investment in R&D, investor friendly environment, skill development, low voltage grid connectivity of variable solar resource and regulatory decisions are major challenges to be resolved. As the penetration of rooftop solar has to be increased so that manufacturing capabilities of solar modules can also be initiated in Pakistan. Whereas in skill development, it can provide work environment for engineers, manufacturers, suppliers, repairs, maintenance, testing facilitators.

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