Consequently, it would be appropriate to implement such a scheme in Pakistan too, which would correct its present spoiled generation, fuel and customer mix. It would also stem the need for another increase in the power tariff by 20 percent, when 64 percent average increase has already been made along with the monthly fuel price adjustments, which adds to the bills regularly. Increased energy security from decreased fuel imports is another reason in support of resort to renewable energy (RE). We must also learn from other examples. Consider Australia where presently 92 percent of power generation is fueled by cheap indigenous coal. They have still implemented an ambitious solar energy program and the skyline is covered with the shiny black of PV panels. Similar is the situation with the Germany, where18,000 MW is generated through PV-based solar power systems. Many other countries are catching up in this race.
This underlines the need that in Pakistan, too, introduction of solar power into the menu of existing generation mix remains of prime importance. And the right way is to engage every Pakistani into the scheme of things. The public and the private sectors engaged in generation may set-up solar power stations of both the PV-based and the concentrated type, while the general people would install micro systems for their residences, commercial set-ups and industries. For this NEPRA, under guidelines of the government may allow feed-in tariffs (FITs). Additionally, the government would have to formulate the Electricity Feed Act to regulate the feed-in of electricity generated from renewable sources to the national grid – primarily solar power. Some wind power too can be attracted in the coastal and hilly areas. This act will require the utility companies (DISCOs) to purchase electricity generated from the consumer solar power systems at set rates. Depending upon as to what national goals are set, we can have either gross or net feed-in tariffs. Under the net feed-in tariffs, the PV system owners get paid for the surplus energy produced and this system should be our first choice. These payments can be calculated and then made on the monthly or yearly basis. Pakistan may set a target of meeting 10 percent of its needs through solar power systems by 2020 if we go for a stringent target.
How do we do it in Pakistan? A little foray into statistics reveals that a total of 20.5 million customers stand connected to the PEPCO system, while another 3.0 million or so are on the KESC rolls. Out of these, 21 million fall under the category of general customers, including both domestic and commercial users. Around eight million of these can be termed as affluent customers with monthly average usage of more than 300 units. The installed load of these customers should actually be more than 5 KW. This translates into the requirement of a 1KW solar power systems for this category, which can cater to at least 10-20 percent of their demands. In financial terms, a 1 KW solar PV-based system costs Rs.500,000. Keeping in view the prevalent power tariff, the payback period for it has been calculated to be anything between 3-10 years. Now the question arises so to why would existing customers take the trouble and expense to go for a solar power system when they are already using their private generators or UPS. The answer lies in the fact that UPSs in Pakistan have a poor efficiency of 19 to 45 percent at the most, delivering highly impure power. The charging of the standby systems adds hefty amounts to the monthly utility bills. The generators have an efficiency of around 18 percent and remain expensive to maintain. The noise and smoke pollution further tips the ante against generators. PV based solar power systems are almost maintenance free, environment friendly and need no fuel at all.
How do we arrange for the cost of installation of the Solar Power system, which is needed to be expended up-front. Here, the government will have to arrange for the banking sector to come-up with a special package akin to what is available in neighboring India, where finance to install solar kits are available at 4 percent markup only. Additionally, the feed-in tariffs would be 150 percent of the utility tariff, allowing the customer to gain by 50 percent on each unit generated by his system, which could then be plowed back to re-pay the loans sought for the original installation. The utility concerned would keep an account of this import and then pay such customers through adjustment in their utility bills on monthly, quarterly or half-yearly basis. The padded-up of FIT would be underwritten by the government. However, the amounts thus expended would be much less than the tariff differential subsidy, being paid presently.
So as to ensure that the prospective power customers also get on the band wagon, a special legislation would have to be enacted in support of the already enacted Building Code, whereby all new residential units of 10 marlas and above in the bigger of the urban cities would be under an obligation to arrange for 10-20 percent of their needs from solar power and other RE systems. Otherwise, they would be deprived from any access to the power and gas utilities. Thereafter, the facility of feed-in tariff would be available to them and so would be the facility of low mark-up loans. Additionally, all new commercial units would be under a similar obligation. And in order to facilitate conversion to solar systems and to achieve the minimum goal of production of 5000 MW of such power by 2020, tax rebates are also recommended. This would further improve upon the chances of a quick addition to the tally of solar power.
And in order to institutionalizse the plan, the ownership for implementation would rest with the AEDB, while organisations like the EDB, NPO, PSQCA, PCST, PEPCO and such others would assist and ensure indigenization, reduction in costs and further improvements in the systems. Mid-course changes on the basis of technological advancements would also be made or recommended by these organisations. The governmental support is going to be of great import as otherwise sustainability of the plan could never be assured. Moreover, NEPRA, as the regulator would have to act at the watchdog-specially, when solar power and other means of RE, will lead to affordability of power for the people, besides in less dependence on imported fuels.