Load-shedding? Bill tampering? Theft? Fret not, Pakistan, for solar-powered systems are here to save the day (and your money)

Published: August 8, 2017
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Technicians work on solar panels in a power station at Hub about 25 km (15 miles) from Karachi on June 18, 2010. PHOTO: REUTERS

For the last 10 years, we’ve been hearing that Pakistan is on the verge of getting rid of load shedding and power shortages. The situation, however, has stayed the same despite repeated government announcements.

Since power is not the only sector in which gross incompetence and corruption have led to low levels of service delivery, it is perhaps correct to assume that the prospect of things improving in the short to medium term are impossible.

When the government-provided education services are inadequate, people send their children to private schools. They opt out of the government-prescribed syllabi which are often used to propagate nationalistic and corrosive ideologies and get their children to study for internationally recognised A’Levels. They send their sick to private clinics, hire private security, and the list goes on.

These options are naturally more expensive. However, the real choice is not one of getting a better price for a service, but between no service and service at a higher price.

The problem

There are multiple problems with centrally-managed power systems in Pakistan, namely WAPDA, K-Electric and more. There is the question of availability at a certain source, the bad distribution system, followed by massive theft, corruption in billing, specification of unfunded subsidies (which have led to the famous circular debt), and gross financial and administrative mismanagement.

It is important to note that any proposed solution would need to consider all the aforementioned issues, not just the availability at source, which seems to be the focus of most government announcements.

There is no point in lamenting any further about this. Pakistanis need to investigate whether there are alternative solutions which could assure them reliable electric power at reasonable prices.

A possible solution: Transition to solar power

Technological innovations, advances in solar energy and the growing size of the market have caused the cost of solar power systems to plummet. The prices of solar panels and installed residential solar power systems have fallen dramatically over the last 10 years.

In 2004, it was about $5-6 per watt and now it’s in the range of $1.6-2.0 per watt. This coupled with the fact that Pakistan is in a geographical region with abundant sunshine across most of the country, proving that solar power is a solution that can be adapted for use in Pakistan.

In addition to multiple well-documented environmental advantages of transitioning to renewable energy sources, there is another crucial advantage in the use of solar powered systems – they work well in a decentralised environment. This, however, is extremely relevant for our situation.

In a decentralised environment, the source of supply is close to and mostly under the control of the consumer. The problems of transmission losses, theft and mismanagement, which are some of the primary reasons why power is not available to consumers in Pakistan, are thus eliminated.

Estimated costs of transitioning to solar power

The attached table gives the cost of installing a solar powered residential system for three categories of users.

Category one includes the basic user who needs to power a few electric bulbs, ceiling fans, owns a refrigerator, a TV and some other minor electric appliances.

Category two includes those users who also operate one AC and have a deep freezer and water pump.

Category three includes the more affluent household which operate two to three ACs and have many more light points, ceiling fans and several other appliances. The table also shows the average summer and winter electricity bills that users currently receive from their electricity utility.

These are used to calculate an approximate payback period for the initial capital investment. As seen from the table below, this is between 10 to 13 years. These are conservative calculations. The actual payback period could be more like 10 years.

A solar powered system would completely replace the need for electricity from the grid and the electricity bill would be zero from the power utility. Moreover, and more importantly, there is no running cost of the solar powered system.

Financing

Lower income households may have some difficulty in making this sort of investment. However, local banks have been forthcoming in providing financing for investments.

These loans could be paid back by the consumers at rates equal to their electricity bill over a period of 10 to 12 years. This would enable the system to run for free for the next 10 years.

In addition, a whole new sector of economic activity would open up and create jobs in departments such as sales, installation, repairs etcetera, as has been witnessed in the case of other sectors such as security, cellphones and computers.

The transition to solar power could make a significant dent in the energy shortfall of 7,000 megawatts. If one million households transition to solar power across Pakistan and the average requirement is on the lower end, at 2.0 kilowatts per household, the total power requirement from the grid would reduce by 2,000 megawatts. The stated shortfall between peak demand and supply is about 7,000 megawatts, which means that this shortfall would be cut down by 30%.

If this number is higher, which it may be, then the total requirement on the central grid could go down even further. This would mean that the existing supply and demand situation would become more manageable. Therefore, the benefits for this transition would also extend to those who have not transitioned to solar power.

In developed countries, the decentralised systems are viewed as secondary power generation sources which can sell excess power back to the utilities.

An interesting problem

Apparently, the idea of solar power is already getting some attention in Pakistan and some households have started installing solar systems as a backup. However, an interesting problem has emerged.

It was reported by The Express Tribune that potential consumers have been subjected to fake rumours by unscrupulous utility officials that,

“Solar panels would actually make things worse. They have been told that the dark coloured solar panels, built to absorb the sun’s rays and convert them to electricity, would increase the ambient heat in the buildings they were attached to, pushing the temperature indoors even higher.

Officials have also reportedly stated that the growing use of solar panels was to blame for the more frequent and intense heat waves that Pakistan has experienced – something scientists say is entirely untrue. Climate change and worsening extreme heat is instead driven largely by a huge expansion in the use of fossil fuels such as coal, oil and gas.”

This story in effect brings out the potential viability of a large-scale transition to solar power. It seems this trend has really hit the nerve of those who have a vested interest in preserving the existing system.

It is important to emphasise that the essential strength of the idea is the decentralised nature of its implementation. The decentralised nature of the system completely eliminates all the problems associated with transmission and distribution losses due to theft and corruption.

Currently, solar power residential systems seem to be a viable and efficient solution for our constant electricity, bills and load-shedding woes. After all, where there’s a will, there’s a way – and this is the way of the future.

Dr Ali Hashim

Dr Ali Hashim

Dr Ali Hashim retired recently from the World Bank. He has extensive experience in Public Sector Management and has a PhD from the Imperial college of Science and Tech.

The views expressed by the writer and the reader comments do not necessarily reflect the views and policies of The Express Tribune.

  • GKA

    Is solar un-islamic in a temporal sense? Some people could argue so because it undermines the greatest natural resource gift to any community. Renewables now have reached the level of technology that they can keep oil prices near US$ 50 per bbl levels which could potentially bankrupt some middle eastern states including Iraq, Saudi, Oman and also Libya. Malaysia and Indonesia would also see major declines in revenues as the government accounts are showing. More solar undermines the strategic importance of OIC countries.Recommend

  • KlingOn2K

    Hoping that India will not steal Pakistan’s sunshine.Recommend

  • Ahmed Shah

    The situation has remained the same…. Really? So what has the additional 10000MW been added to? The writer in his scorn has misrepresented facts which is a sadly a norm these days. Past 70 years no government took energy crisis as their top priority, IT WAS ONLY NAWAZ SHARIF WHO MADE IT HIS ADMINISTRATIONS NUMBER 1 PRIORITY.

    One can argue that Nawaz’ energy policy is yet incomplete however to suggest the situation is the same is to be naive. For 70 years no government changed the transmission lines therefore we have a cumulative line loss of at least 20-30% which is massive considering we are a energy starved nation. Adding to the challenge is the electricity theft which adds another whopping 10-20% despite stricter regulations.

    So what the esteemed writer missed to mention in his biased analysis is that Mr Sharif is the ‘only’ leader in our tragic history who has contributed the most to electricity generation in a short span of four years, despite the threatening dharnas, jalsas and swinging sword of martial law.

    We can always find excuses to the contrary however the fact remains that this administration added 10,000MW plus to the national grid. Kindly remember that!

    Also the largest solar parks and a rebate on solar imports is also the current governments initiative or would we attribute it’s credit to Raheel Sharif (lol).Recommend

  • Ahmed Shah

    The situation has remained the same…. Really? So what has the additional 10000MW been added to? The writer in his scorn has misrepresented facts which is a sadly a norm these days. Past 70 years no government took energy crisis as their top priority, it was only nawaz sharif who made it his administrations number 1 prirority

    One can argue that Nawaz’ energy policy is yet incomplete however to suggest the situation is the same is to be naive. For 70 years no government changed the transmission lines therefore we have a cumulative line loss of at least 20-30% which is massive considering we are a energy starved nation. Adding to the challenge is the electricity theft which adds another whopping 10-20% despite stricter regulations.

    So what the esteemed writer missed to mention in his biased analysis is that Mr Sharif is the ‘only’ leader in our tragic history who has contributed the most to electricity generation in a short span of four years, despite the threatening dharnas, jalsas and swinging sword of martial law.

    We can always find excuses to the contrary however the fact remains that this administration added 10,000MW plus to the national grid. Kindly remember that!Recommend

  • Obii1

    The writer does not have good grasp of Pakistan market cost and payback figures for solar systems. Also he flies not mention net metering anywhere in article which is available now I major cities of Pakistan with new installations increasingly opting for it. As For cost of I were to gone some examples ~ for approximately Rs.5lac (~$5k) one can get a 3kw hybrid system with batteries & including installation and net metering from any Premier vendor in Pakistan.
    Similarly 5kw system costs around 8lac (or $8k) not $13k. Recommend

  • Ahmar

    Great article. However a few things to consider.

    The rates in your chart do not include the interest payments. More affluent families that CAN afford to install these systems out of their own pocket can hope to break-even with regular electricity bills in 10-12 years.

    However, if you are taking a loan from a bank for installation, then users would need to account for the bank’s interest as well. In such a case, consumers would break-even with electricity bills after a longer-period.

    One also needs to consider maintenance costs.

    The solar PV panels have a supposed lifetime of 25 years. They could last longer, or shorter, depending on different factors. One needs to consider the fluctuations in billing costs as well. If oil becomes cheaper/electricity costs go down for any reason, then these PV panels would be more costly in comparison. On the other hand, if electricity costs become higher, perhaps due to rising oil prices, these panels would be cheaper.

    The main benefit of these panels is uninterrupted supply during the day and independence from the grid. Hopefully, costs will go down and efficiency will rise in the next 10 years making them more affordable.Recommend

  • Humza

    It is inevitable that fossil fuels will be replaced. Look at the trend of the automotive industry to dump the combustion engine for electric cars. It’s going to happen in the next decade. I am all for renewable energy but the initial start up cost worries a lot of Pakistanis. The writer has neglected that a lot of energy and projects are adding electricity to the Pakistan national electricity grid which is both good and bad. The energy crisis is improving in Pakistan with less load shedding but I worry that this may stop people from going to solar and alternative energy. It would lower Pakistan’s carbon emissions to have more solar power or else our cities will be as polluted as cities in India or China.Recommend

  • peter pan

    The Author points out in his article that no matter how much you add at the source in a centralized system, the losses due to transmission lines, theft which add up to 30-40% remain as also the unfunded subsidies which lead to the circular debt. The main advantage of a solar based system is that it is amenable to de-centralized installation where the source of supply is under the control of the consumer.Recommend

  • peter pan

    10,000MW added and the situations stays just the same!!!Recommend

  • peter pan

    The author does mention net metering in grid tie systems. Also he does say the costs are conservative estimates. If the Pakistan market offers better prices, it will just reduce the payback period and make the proposition more cost effective.Recommend

  • Parvez

    Nice ……. a lot more needs to be written on this subject so that a wide spread awareness is created, especially in the rural areas.Recommend

  • peter pan

    I notice that a comment that said that there should be more articles like this I your blog section has now been removed. This is really censorship.
    I second the idea that there is a section in the blog sections that deals with developmental issues. You have many article on “juicy ” topics already.Recommend

  • Humza

    I agree that a de centralized system is better and no matter what a decentralized solar system is better on the whole for the environment. Theft can be dealt with by making all customers pay on line. As for transmission lines, the government is in the midst of major overhaul of transmission lines to carry the new loads being generated if you investigate this further.Recommend

  • hznotes

    Only a nawaz sharif supporter will believe that 10,000 MW has been added to the grid during NS tenure.

    Did you know that the supply/demand gap in electricity wasn’t even a quarter of the number you are stating (even before NS took over)? If he added 10,000 MW to the grid than we should be selling a lot of electricity! It is clear that you hold on to the number because you must have heard it in a rumor or NS speech or something (doesn’t matter).

    I want you to really think about that (the number 10,000 MW), where you got it and how easily your opinion was molded by this total lie.

    Recommend

  • hznotes

    Your view of the world and solar energy are deeply flawed. You can’t control the market by simply refusing something on religious grounds, that’s not how the world works. If you don’t install solar just because it will hurt your neighbors, I guarantee they will install it and not think twice. This is how competition in a market works, if you don’t know that than I worry for you.

    Some more flawed thinking:
    – $50 per bbl due to renewable: you really believe that the recent oil price crash is due to renewable taking more market share?
    – Saudi will be bankrupted by $50 oil: extremely foolish to believe this as Saudi produces one of the cheapest oils in the world. the lifting cost of american/north sea is much higher! Saudi will be the last country to be bankrupt for this reason!
    – You think that solar energy, which contributes to less than 1% of Pakistan’s energy is such a large industry that it would shift geopolitical power? Where are you making these opinions from?
    – How will you replace the countless liters of lubricants/aviation fuel/car fuel/bitumen that the worlds largest companies product with a piece of dark glass and wires?Recommend

  • Salman Saeed

    Decentralized system is not good approach.In this way we will be reliable only available resources of power generation within that territory, energy mix benefits will not be availed.Solar power is viable only where there is no transmission/distribution network.It is fact thatSolar technology has improved a lot and its cost has come down drastically, few years back solar plate cost was 100 PKR/watt which has reduced to 40-50 PKR/Watt.Moreover, net metering is being implicated by all DISCOs which is really appreciating, it will improve performance of distribution system, voltage profile will be improved and losses will be reduced.Recommend

  • Sohail Khan

    Not only domestic energy solutions, but the micro-grid solutions will soon emerge as a competitive solution. These will be community invested and owned systems with high reliability. On community level, it can become more cost effective, of course more challenging. In Pakistan, microgrids should be customised to specific energy requirements and to deal with community unity/collaboration problems. However, for schools, hospitals, and organisations it still is a green field. The grid feed in tariff is still demotivating and a subsidy will greatly improve, but are our DSOs ready for distribution system challenges as appeared in last decades in mature energy markets like Germany, France etc.. @pakgridnewsRecommend

  • GKA

    OK – not sure if you understood my post.
    – recent oil price crash not due to renewables. But long term oil price is due to renewable. Over 100 gigs of power is in construction in India alone for next 5 years – not a paper project, contracts are being awarded every quarter. Gas cannot compete – Citibank recently released a report on this. Europe just awarded large wind contracts at less than 5 cents per kwh. Germany and Netherlands have passed laws that no oil based car can be sold in thier country after 2024. Other countries going the same way.
    – Average oil price for this year is above 50 per bbl, spend reducitons are put in place and yet Saudi are still in deficit . Approx US$ 20 bln deficit. Was reported in the news. Extraction costs may be cheap, but Saudi has the most obscene welfare system in the world. And thier population growth is approx 3%. So by 2025 they would have population higher by one third compared to 2014, yet income down by 60% and deficits killing thier economy. They can remove the deficit but then will face Arab Spring II.
    – Don’t know about Pakistan, but renewables is exploding across the world. In India it will touch 20% in 5-7 years – that is more than entire generation capacity of Pakistan. China doing the same. The challenge is very much real

    Most OPEC members are members of Organization of Islamic countries. Decline of Oil represents a decline of their influence as well.Recommend

  • hznotes

    the initial point that was being talked about was how solar(less than 5% of energy mix of only electricity generation) would undermine islam, in your opinion.

    let’s not divert from that and discuss romantic notions of a solar/renewable world by 2024, which will definitely not be the case. you are just recycling headlines here, think for yourself!

    most countries are on this bandwagon right now due to the low oil price, but IF prices are hypothetically 100+ again, then i guarantee you they will keep their mouths shut.

    i would argue that dependence on a single resource is bad. it should be from diversified. opec is considered a cartel, controlling the market as they like for their own benefit but most of the time they cause themselves harm

    also:
    china is interested in solar because they are the largest manufacturer.
    india, like pakistan, makes a lot of promises and noise for the future, but the reality is often far from it.
    comparing europe to south east asia is comparing apples and chewing gum.
    when you mention netherlands, don’t forget the royal dutch shell (and don’t forget to compare the size of shell vs dutch solar)Recommend