Shams Power: Benefits of Rooftop Solar Power Plant for Commercial User in Pakistan

Benefits of Rooftop Solar Power Plant for Commercial User in Pakistan

Due to the growing energy crisis, people across the world are looking for alternative sources of energy. One such source is solar power.

Pakistan is an ideal location for the use of solar energy as it receives ample sunlight throughout the year. But the country is not harnessing its full potential.

Cost-Effectiveness

Solar power is a competitively priced technology that has become increasingly cost-effective for businesses. This is largely due to reductions in technology prices, innovative financing, and growing networks of solar installers and financial partners.

Moreover, tax credits and rebates in leading states can further reduce the total cost of a system. A federal investment tax credit of 30 percent can help reduce the system purchase price even further.

To encourage more solar installations, the National Electric Power Regulatory Authority (NEPRA) has implemented net metering, which allows consumers to track both in and out flow of electricity. This policy was introduced in 2015 and has helped encourage domestic and commercial users to install solar PV systems.

Solar energy is a cost-effective and environmentally friendly source of renewable energy in Pakistan, as it is comparatively cheaper than other renewable energy sources like wind and hydropower. It also has low maintenance costs and long life span.

Environmentally Friendly

In Pakistan, like most of the countries in Asia, energy generation is heavily reliant on traditional fossil fuels. These fuels have adverse environmental impacts and are not sufficient to fulfill the country’s needs.

Solar energy is a clean, affordable and renewable source of electricity that can alleviate the country’s current energy crises. It can also contribute to economic prosperity in a sustainable way.

The country’s energy crisis has negatively impacted all major sectors of the economy. It is the need of the hour to find a sustainable solution for this problem.

There is a huge solar potential in the country, especially in Sindh, Baluchistan and some southern areas of Punjab. The solar irradiance of these regions is 2 MWh/m2 and the sunshine lasts for more than 3000 h per year.

Energy Security

Pakistan is a country that requires a continuous supply of energy for its daily activities. All the major sectors of agriculture, transport and industry require electricity for their functioning.

In spite of its immense energy resources, the country is facing an energy crisis. These energy shortages are caused by a combination of poor electricity transmission and distribution networks, high losses in system, and lack of renewables integration.

Therefore, the country needs to deploy renewable energy sources in a proper way. Solar power is the perfect solution for this purpose.

The Government of Pakistan (GOP) has recognized the importance of solar power by announcing a renewable energy policy that aims to increase the share of renewables in the overall electricity generation mix to 60 percent by 2030. It also plans to develop small hydropower projects in remote areas by using indigenous resources, which is considered a clean and inexpensive source of power.

Reduced Risk

The Rooftop Solar Power Plant for commercial user in Pakistan reduces the risk for businesses and helps them save money from Day 1. It provides zero upfront cost and guaranteed savings in return for discounted rates on energy tariff. Moreover, these projects are facilitated through solar Purchase Power Agreement (PPA) and diminishes the risk for solar financing investors.

The Alternative Energy Development Board’s (AEDB) package is particularly attractive, attracting developers to invest in large-scale projects that could substitute expensive fossils fueled power generation. However, the package also carries risks that are similar to those that legacy thermal Independent Power Producers (IPPs) faced in the 1990s.

A key concern is that the proposed project term of 25 years ties in foreign currency-indexed tariffs for the lifetime of the project, potentially increasing it in Rupee terms as the rupee depreciates. This could lead to a lock-in of dollar-indexed tariffs, limiting the fiscal and planning flexibility of the government and utility.