LAHORE: The energy sector experts have feared that the solar tax was not a hoax. Rather, it was a litmus check to make Pakistan the first nation to tax clean energy.

It may be noted that media reports suggested a few weeks before that the Central Power Purchasing Agency (CPPA-G) has suggested the government impose tax on both residential and commercial consumers who have installed solar systems.

However, the Power Division had rebutted it mildly while highlighting the burden being taken by the poor segment of electricity consumers in the country.

The energy sector experts said it would be a regressive step, especially when our contracts with IPPs at today’s prices (thermal power based) are at about $24 per kWh, including variable costs.

“If the purpose is to meet a part of the fixed capacity charges, then it shows what sort of agreements we entered into with the IPPs,” they added.

Some others believe that the news has been released as a feeler to assess public opinion for further course of actions in the future.

They further termed it an effort to pave the way for business tycoons to set up solar IPPs. There pointed out the reports suggesting that the government had floated tenders for 600MW solar projects but got very poor response.

According to these circles, the issue is not about net metering. The issue is that we are having difficulty reconciling the current tariff structure with the concept of net metering.

The other issue is whether there is enough electricity demand in the transmission and distribution network when extra electricity is received from the solar panels, they added.

Since, they said, the electricity can not be stored unless super batteries are devised, the management of the system becomes quite complex.

The experts are of the view that Pakistan needs to increase electricity consumption from the grid immediately to avoid further catastrophe, as imposition of tax on solar electricity producers will be stupid in today’s clean energy transition environment.

This can be easily done by offering cheaper tariff to industrial and commercial consumers for all units consumed above a basic (defined) load, they stressed.

Copyright Business Recorder, 2024