Solar Energy Lights Up Homes, Schools and Factories in Pakistan

[Riaz Haq]

“I use the solar light for cooking at night. We save money because we had to buy candles and kerosene before. We also use it to charge our mobile phones.” Marvi, Yousaf Babar Village in Sindh, Pakistan

About 250 schools and 12,000 homes in Pakistani villages have so far been lit by solar lights. The program is funded by the UK's Department for International Development (DfID) to help flood-affected people in rural Sindh and Punjab.

Plan International Pakistan and the Punjab education department have rebuilt 400 schools destroyed by floods, and implemented solar panels in 250 schools that did not have electricity. In addition to the solar panel installation, the DfID funded project also provided water and sanitation, school furniture, school paper, schoolbags and uniforms, sports equipment and health education for 54,000 primary school children.

The solar lights cost about $15 each and give sustainable, free light for up to 10 hours after each charge, and can last for up to five years. The cost is recouped within a couple of months, providing excellent value for money, according to DfID sources.

The solar technology is also used for recharging mobile phones, which provide vital communication lifelines in rural areas, enabling people to keep in touch with family and community. The mobile phones are helping reunite displaced families and communities, and helping people to try to get back to a normal life.

In addition to growing number solar energy users in Pakistani villages, the city dwellers are also increasingly turning to solar to cope with frequent power cuts, and gas shortages. There is growing demand for low cost Chinese solar products such as solar street lights, solar garden lights, solar generators, solar heaters, solar water heaters and solar water collectors for industry, according to a report in Pakistan's Express Tribune newspaper. Many consumers told ET they prefer solar over UPS (un-interruptible power supplies) and diesel or gas generators.

“Sales of solar energy panels have increased about 40 per cent compared to winter of last year. Sunshine in Pakistan remains for approximately 10 hours a day, which is enough to produce 1,000 watts per square meter. Producing electricity from the sun is very easy,” the paper quotes Tariq Nurani, a solar products dealer, as saying.

The Express Tribune story also features Khawaja Cotton Industries CEO Muhammad Amjad Khawaja who said he invested Rs 5 million for solar water boilers which helped deal with increasing gas load shedding in the textile manufacturing sector.

The rapid cost declines and increasing availability of solar equipment are enabling energy-starved but resilient Pakistanis to cope with the twin shortages of gas and electricity.

Here's a World Economic Forum story on solar revolution in Pakistan:

https://youtu.be/8IIJRuLAbOE

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[Riaz Haq]

Pakistan's rooftop solar boom shines spotlight on power crisis - Nikkei Asia


https://asia.nikkei.com/Spotlight/Asia-Insight/Pakistan-s-rooftop-s...

As things stand, existing users of solar panels are counting on the government to facilitate the spread of solar energy.

Rehman, the businessman from Lahore, said the government should encourage the local manufacturing of solar panels, which would help to maintain foreign exchange reserves.

Khuram Idrees, a resident of Rawalpindi who has a solar system at his home, recommended that the government provide interest-free loans to consumers to install solar systems. "All around the globe, green energy is supported by governments by incentivizing people to adopt such technologies," Idrees told Nikkei.

Back by the Srinagar Highway, solar adopter ud Din remained concerned by the government's uncertain policy, saying its changing approach on net metering has confused the existing users.

"If the government scraps the net-metering policy, then we will be left high and dry, our investment will be wasted, which is a terrifying prospect," he said.

[Riaz Haq]

The rise of Pakistan’s C&I solar business – pv magazine International

“In 2022, 2.8 GW of solar panels were imported into Pakistan. In 2023, about 5 GW, despite the import controls, and this year the prediction is for up to 12 GW,” he stated. One of the main hurdles to address in Pakistan's C&I segment is access to financing.

https://www.pv-magazine.com/2024/05/28/the-rise-of-pakistans-ci-sol...

C&I power consumers are increasingly deploying solar arrays in Pakistan due to high energy prices and tariffs.

“The average industrial consumers currently pay a tariff of $0.12/kWh,” Omar Malik, the CEO of Pakistani solar developer Shams Power, told pv magazine. “But this is only half the story, as they also have to pay another $0.10 in taxes on every kilowatt-hour they purchase from the grid. The government relies on five to six sectors for the bulk of its indirect tax collection, with electricity being one of the largest ones.”

High-self consumption rates mean lower electricity costs and lower taxes. Under the nation’s current regulations, the sale of excess power to the grid under net metering is only allowed for generators up to 1 MW in size.

The government also only exempts import duties on solar panels. “The exemption on solar inverters has been recently removed,” Malik said. “But this has not had consequences on the market development.”

Pakistan’s National Electric Power Regulatory Authority (NEPRA) issued 1,596 net-metering licenses across the country with a cumulative capacity of 221.05 MW in the 2022-23 fiscal year, according to official statistics from the Associated Press of Pakistan.

Malik said the market is also growing in terms of panel imports.

“In 2022, 2.8 GW of solar panels were imported into Pakistan. In 2023, about 5 GW, despite the import controls, and this year the prediction is for up to 12 GW,” he stated.

Financing concerns

One of the main hurdles to address in Pakistan’s C&I segment is access to financing.

“Banks and lenders in Pakistan keep considering solar assets as very fast depreciating assets,” Malik explained, noting that the volatility of the Pakistani rupee is still an issue compared to India, where access to financing is easier. “The Indian currency is stable enough for international investors.”

Despite these challenges, Shams Power was able to raise $20 million debt from local banks backed by a guarantee from an international credit enhancer, GuarantCo.

“In order to achieve this, we have to bring the bank in at the project finance stage,” Malik explained. “Or we can even do this after a year or two of operation, when we have some defined cash flows and we can show how these assets are performing and get the portfolio refinanced.”

Many Pakistani companies that export denim and textiles to the US and European markets face pressure from their buyers to support their supply chains with clean energy.

“In effect, there is some pressure to move toward renewables, but it is not coming from the government,” said Malik.

Storage segment

The C&I segment does not yet offer a big business case for battery storage.

“Batteries are still not economically viable when it comes to grid parity owing to high duties and taxes on import of batteries and storage technologies,” Irteza Ubaid, chief operating officer for Shams Power, told pv magazine. “With the current electricity price scheme in place, you can only generate profits when there is a power outage. Or when peak rates hit, you can start using batteries. However, the levelized cost of storage of C&I tier-1 batteries today, however, is still close to $0.35/kWh. We are still not able to give an economic benefit to clients to set up storage because they can buy grid power at less than $0.30, they're really not interested – unless they have a continuous production process and cannot afford any interruptions.”

[Riaz Haq]

Pakistan Sees Solar Boom as Chinese Imports Surge, BNEF Says – BNN Bloomberg


https://www.bloomberg.com/news/articles/2024-08-09/pakistan-sees-so...


(Bloomberg) -- Pakistan’s market for solar power is booming, propelled by a surge in imports from China, according to BloombergNEF.The country imported some 13 gigawatts of solar modules in the first six months of the year, making it the third-largest destination for Chinese exporters, according to a report by BNEF analyst Jenny Chase. Pakistan’s installed capacity to generate power is just 50 gigawatts. China is the world’s biggest producer of solar equipment.Solar is gaining traction in the South Asian nation following hikes in power prices over the past few years, with the latest increase in July triggering widespread protests. Higher rates have seen grid electricity consumption drop to the lowest in four years as many people switch to independent solar. “Pakistan’s market has the potential to continue to be very large,” said Chase. “If solar is solving the market’s power problems, there is no reason to expect a crash any time soon.”BNEF expects that the country will add between 10 gigawatts and 15 gigawatts of solar this year, mostly on homes and factories, making Pakistan the sixth-largest market in the world. Given the surge in imports, that figure could end up being far higher — or growth could stall if the grid situation improves, prices fall, or the market of middle-class people who can afford solar panels on their roofs saturates, according to the report.
There are other complications in accurately assessing the market and its prospects, said Chase. Those include wide discrepancies between official data on installations and imports, as well as claims last year that solar imports were used in money laundering schemes.

[Riaz Haq]

China adopted classic cutthroat pricing to shift a record 120,427 megawatts (MW) of solar module capacity exports in the first half of 2024, with Pakistan being Asia's largest single market, accounting for 10,450 MW.

Key to the strong export flow was a steep cut in module prices, which averaged 13.7 cents per megawatt over the first half of 2024, compared to an average of 18 cents/MW for the whole of 2023.

https://mettisglobal.news/pakistan-emerges-as-largest-asian-buyer-i...

The Netherlands remained the top country market for China's modules, taking in 23,421 MW of capacity during the opening half of the year.

Brazil was China's second largest market during the first half of the year, snapping up 10,511 MW of capacity.

Pakistan was the world's third and Asia's largest single market, accounting for 10,450 MW.

Meanwhile, India snapped up 8,324 MW.

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Key Markets

Europe was the top destination for China's solar modules, accounting for 43% of the total, or 52,158 MW.

That total was down 20% from the same period in 2023, as high interest rates, economic growth concerns and trade tensions with China stifled solar installation demand across the continent.

Nonetheless, Europe's purchase total was the second highest tally for a half-year period behind the first half of 2023.

The Netherlands remained the top country market for China's modules, taking in 23,421 MW of capacity during the opening half of the year.

While that total was 25% less than during the opening half of 2023, The Netherlands' purchases were still more than twice the size of any other nation during the first half of the year.

Spain, Germany and Italy were also notable buyers in Europe, but all also showed steep year-on year contractions in purchase volumes, Ember data shows.

Brazil was China's second largest market during the first half of the year, snapping up 10,511 MW of capacity.

That total was up 10% from the same period in 2023, and contrasts with a slight contraction in imports by the Latin American region as a whole during the first half of the year.

Growth Areas

Asia was the second largest regional destination for China's solar parts, accounting for a record 32,109 MW of capacity, or around 27% of the total.

That total was 86% more than during the first half of 2023, and was driven mainly by strong growth in South Asia. Meanwhile, India snapped up 8,324 MW.

Both markets recorded more than 200% jumps in solar imports from the same period in 2023, and represent key growth markets for China in the future.

The Middle East was another key destination for China so far this year, with exports to the region topping 13,000 MW for the first half of the year to account for a record 11% share of China's total solar panel and parts exports.

That compares to 6,228 MW during the first half of 2023, and was driven in large part by strong purchases by Saudi Arabia (7,649 MW), United Arab Emirates (1,892 MW) and Oman (1,396 MW).

Elsewhere, North America remained a tiny market for Chinese panels and parts due to the ongoing trade spat between China and the United States, while Africa's purchases shrank by around 9% from the first half of 2023, and accounted for only 4.3% of China's total sales

[Riaz Haq]

Surprise Solar Boom in Pakistan Helps Millions, But Harms Grid
There’s a shiny new addition to Pakistan’s dusty agricultural heartland: rows upon rows of solar panels.



Bloomberg News

Fasih Mangi



https://financialpost.com/pmn/business-pmn/surprise-solar-boom-in-p....



The flood of solar panels from China started in 2023, and turned into a deluge after Pakistan removed import curbs late last year, making it the third-largest destination for Chinese panels, according to BNEF. Now they’re being advertised on billboards in major cities and during cricket matches.

The frenzy wasn’t restricted to the energy sector: real estate companies and electronics firms started flipping panels, with the biggest traders bringing in up to 250 megawatts’ worth every month, according to Usman Ahmad, chief executive officer at solar distributor Nizam Energy Pvt.

Driving the demand were households and factories producing everything from cement to apparel, who have suffered frequent blackouts in the past due to the unreliable grid.

Speculation that the grid will collapse is “extreme,” but the reduction in demand is indeed a concern, Pakistan’s Power Minister Awais Leghari said in an interview. Utilities “have to be a little more sensitive to the demands of customers in terms of reliability and tariffs,” he said. “We all realize that the status quo can’t prevail.”



For Murtaza, the decision to switch to solar on his farm near Lahore was an easy one. It will take him less than a year to recover the cost of installing the panels, and his electricity bill has plunged by 80%, he said. With the savings, he’s able to plant three crops a year instead of two.

“I have never seen such a big change in farming. Ninety-five percent of farmland has switched to solar in this area,” he said, pointing to his photovoltaic array towering over piles of harvested corn cobs. The panels are now cheaper than the frames they’re supposed to be mounted on, so some farmers just lay them on the ground, he said.

Despite the hubbub, it’s hard to tell how much of the imported equipment has actually been installed due to a paucity of official data. A satellite data analysis carried out in April by Norwegian firm Atlas revealed around 400 solar plants across the country, clustered mostly in industrial hubs. But many more installations went undetected, the geospatial analysis firm said. Most panels have been deployed almost equally across homes, factories, and farms, solar distributors say.



The growth of solar in Pakistan has been interesting because it happened so fast and without any subsidies, said Jenny Chase, an analyst at BNEF. However, the boom is likely to be followed by a bust, she said.

For Pakistan’s government, dealing with the consequences of the solar frenzy and its aftermath, and maintaining the health of the grid and traditional power companies will be essential. For the country’s economy and the millions of people who can’t afford to install solar panels, a failing electricity network would be disastrous.

“The solar onslaught is happening in a very unsafe, very unregulated way,” said Amin Sukhera, chief executive officer of Sky Electric, a Pakistani solar firm. “The people who are running the grid, they do not know what kind of imbalance it’s creating when other people attach solar connections. I think it’s already a pretty sick grid. I fear it may get more sick.”