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 The government has also reversed course and eliminated a 32.5
percent tax imposed on imported solar equipment in the country's
2014-2015 budget. The reversal aims to bring down the cost of
installing solar panels.
The approval of net-metering – which allows solar panel purchasers
to sell power they produce to the national grid - is a major
breakthrough that could spur use of solar energy and help Pakistan's
government cut power shortages in the long run, said Asjad Imtiaz
Ali, chief executive officer of the Alternative Energy Development
Board, a public organization.
"The initiative will help scale up demand for solar energy across
Pakistan,” he said, “and we hope the increased demand will also
result in sufficient decreases in the price of solar equipment.”
Ali said the government decided to cut newly imposed taxes on the
import of solar panels following pressure from business owners, the
public and media.
And the decision to allow solar generators to sell their excess
generating capacity means “consumers can now install rooftop solar
systems and sell the extra energy to the national grid,” he said.
Currently, Pakistan's rural areas face blackouts of over 11 hours a
day while urban areas suffer up to eight hours of daily power cuts.
The total power shortfall stands around 6,000 megawatts.
Safeer Hussain, a registrar at the National Electric Power
Regulatory Authority, said consumers who intend to sell
solar-generated electric power to a distribution company would need
to register with his authority.
“Net-metering is a sophisticated system and the applicant would be
responsible for the installation of the equipment used for
interconnection,” he said.
HOW IT WORKS
Net-metering is a billing mechanism that credits solar energy system
owners for the electricity they add to the national grid.
If a solar household uses more grid power than it supplies to the
grid from its solar panels, it would still be billed each month for
that excess power. But if it supplies more electricity than it uses
in a month, then it will receive a credit against future bills or,
be paid for the power on an annual basis, Hussain said.
"The tariff applicable for purchase of electricity from the consumer
will be the same at which he has been billed by the company for
electric power,” he said.
Nauman Khan, one panel importer and chief executive officer of Grace
Solar Pakistan, said the changes could triple his solar imports in
2015.
Pakistan’s private sector imported 350 megawatts of solar panels in
2013 but that dropped to 128 megawatts in 2014 after the government
imposed taxes on import of the panels, he said.
"The tax exemptions and other initiatives to boost clean energy are
a welcome move by the government,” he said. “We hope the private
sector would import around 800 megawatts of solar panels in 2015 to
meet the demand.”
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Net-metering will not only help consumers get uninterrupted power
and energy credits through the year but also help the government
bridge its power shortfall, he said.
Khan and the heads of two other solar companies plan to install
rooftop solar on 100,000 homes in Lahore, Karachi, Rawalpindi and
Islamabad in next two to three years, with Bank Alfalah Limited, a
private bank, offering financing to buyers.
FUNDING TO BUY PANELS
The State Bank of Pakistan and the Alternative Energy Development
Board have recently allowed the bank for the first time to finance
rooftop solar installation with home mortgages.
Fariha Mir, a senior manager at Bank Alfalah, said the financing up
to five million rupees (around $50,000) for rooftop solar
installation would be launched in the first quarter of 2015 under
the banner “Green Market.”
"It's our social responsibility to create awareness about clean
energy and provide loans for it on easy installments to our
customers,” she said.
Mir said the bank would give loans to customers who want to convert
their homes to solar energy. The program, which will allow buyers to
borrow against their home’s value, will continue for five years, she
said.
"The loan would be especially useful for people who otherwise can't
afford rooftop solar installation,” she said, adding the interest
rate on the solar financing would also be comparatively low.
Qamar-uz-Zaman, an expert on climate change with Lead Pakistan, a
non-profit organization in Islamabad, predicted net-metering and
private sector financing for solar installation would revolutionize
the use of renewable energy in Pakistan, as it has done for many
other developed and developing countries.
"Pakistan can cut carbon emissions to a significant extent and
access international climate financing by promoting solar energy,
besides overcoming its energy crisis,” he said.
(Reporting by Aamir Saeed; editing by Laurie Goering)
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