Governments are supposed to make people-friendly and welfare-oriented policies. Citizens should not be just tax producing machines in the eyes of a government; they are humans with diverse needs.
In Pakistan, inconsistent government policies have historically been the real source of discomfort for Pakistanis. One can’t trust the government’s policies and decisions for the long term. What happens is that we ultimately lose faith in governments and even in state.
The current fiasco in the making is the talk of a fixed tax on citizens who produce energy through domestic solar systems at their rooftops. The second proposal is reducing the power purchase rate for domestic net metering consumers from current Rs 21 to Rs 12, almost 50% reduction on the cards.
In 2015, the government implemented various policies and incentives to promote solar power deployment, including net metering regulations, subsidies for solar installations, and tax incentives for renewable energy projects. These initiatives encouraged investment in solar infrastructure and accelerated the transition to a clean energy economy.
According to some estimates, Pakistan currently produces 3000 MW from solar power.
Net metering solar solutions became extremely popular in Pakistan after the government increased power prices many-fold.
Solar power also became cost-effective, as the cost of solar panels decreased rapidly in recent years, courtesy bulk supply of Chinese solar panels globally.
Solar systems are also increasingly popular in Pakistan because consumers can’t rely on unstable national grids and inefficient power distribution companies. It provides energy independence to consumers, as they reduce their dependence on the grid for their electricity needs.
According to some reports, Pakistan has imported 7000MW power solar panels in the last one year alone. The number of net-metering based consumers has increased by 76% from 63,703 to 111,800 meters during the first eight months of the ongoing fiscal year (July to February 2024). The cumulative capacity of the net metering connections has also increased by 65% from 1055MW in June 2023 to 1735MW in February 2024, according to the industry insiders.
Still, the current quantum of net metering units, at present, is very low, i.e., below 1% of the total energy purchased by DISCOs.
There are on-grid, off-grid, and hybrid solar power producers in domestic and industrial segments. Thousands of solar-powered tube wells support the agricultural produce in the country.
After fulfilling the household energy needs, a citizen can export excess solar energy to the government grid at the rate of Rs. 21 per kw/unit. The average energy unit selling price in Karachi by KE in the month of March was 35.57 per unit in off-peak time and 41.89 per unit for peak time. If we add electricity duty, surcharge, additional surcharge, GST, and income tax, the average per unit cost goes up to Rs 55 per unit for off-peak and peak hours combined.
The government is selling per unit electricity to Karachi-based KE’s consumers at an average rate of Rs 55 and buying their excess solar power at the rate of Rs 21, pocketing approx. 34 rupees per unit.
Why is the government now want to revise the per-unit purchase price from Rs 21 to Rs 12 per unit, which would further increase the difference between per unit selling price and buying price per unit to Rs 44 from current Rs 34?
The Shehbaz Sharif government and Special Investment Facilitation Council (SIFC) must realize that citizens have an installed 3000MW solar power with 100% of their own investment. Not a single penny of government is involved in these solar projects. Unlike large-scale projects, where the government must give sovereign guarantees and also pay huge interest on loans, as well as pay billions of rupees to power producers as capacity charges.
In solar power generation, there is zero government investment, no expensive foreign loans, no capacity payments, no circular debt, no investment in transmission lines, no inefficiency, no power theft, no transmission, or distribution losses.
According to power division sources, the current circular debt is of approx. 3000 billion, which is increasing every passing day. The power sector is facing roughly 20% + transmission and distribution losses across Pakistan.
Whereas solar power energy is a generation within the current load centres, which means there are neither transmission line losses nor theft losses, saving extra 20% for the government.
Prime Minister Shehbaz Sharif must not forget the then Chief Minister Shehbaz Sharif who was the first person to set up 100MW world’s first single largest solar power project in 2014/15 in Quaid-e-Azam International Solar Park in Punjab.
He understands the significance of solar power then and must also remember the criticism he faced for his solar initiative. The critics proved to be wrong, and Pakistan currently produces approx. 3000MW solar power, saving hundreds of millions of dollars on energy import bill each year.
A very senior power official seems to be on a destructive mission. He introduced this idea of reducing the solar power purchase price in his last tenure, too, and he is once again misguiding the Shehbaz Sharif government.
Solar energy offers a plethora of benefits and holds immense potential in alleviating the country’s energy woes while simultaneously addressing environmental concerns.
In conclusion, the government should avoid measure that would send a negative message to its citizens as well as local and foreign investors.
Copyright Business Recorder, 2024