Diversifying Pakistan’s Energy Mix – Solarization at the Household Level
According to the World Resources Institute, the Energy Sector contributes over 75% to Greenhouse Gas emissions (GHG) worldwide. Solar energy is one of the most promising sources of renewable energy in the world. It is clean, abundant, and affordable. Solar power initiatives are making significant strides globally, as well as locally in Pakistan. The government is providing impetus to such initiatives through relief measures such as exempting customs duty on the import of equipment and inputs for manufacturing of solar panels, inverters, and batteries by producers and assembling units. By examining innovative approaches from around the world, Pakistan can draw inspiration and strategies to harness solar power effectively.
One of the main barriers to solar adoption in Pakistan is the high upfront cost of solar panels and equipment. Many people cannot afford to pay for the entire system at once, and there are limited financing options available. One solution that has been successful in other countries, such as Kenya, is the pay-as-you-go (PAYGO) model. With this model, individuals can get a solar system with a small deposit and thereafter pay a certain amount daily. These systems allow users to pay for solar energy in instalments, making it more affordable for those with limited financial resources. Moreover, these systems are reliable and cost effective, as they reduce dependence on expensive and unreliable grid electricity or fossil fuels. By collaborating with financial institutions and leveraging mobile banking platforms, the government can introduce similar PAYGO systems. These would enable consumers to gradually pay for solar energy, effectively eliminating the high upfront costs associated with solar panel installations. This approach not only helps in making solar energy affordable but also promotes financial inclusion. This approach can empower individuals, promote economic development, and reduce the burden on the national power grid.
Another challenge that Pakistan faces is the lack of grid access in remote areas. According to report by the World Bank in 2019, about 50 million people in Pakistan do not have access to electricity, and many more face frequent power outages. One solution that can address this challenge is the use of solar microgrids and home systems. These are small-scale solar systems that can provide electricity to a community or a household independently from the grid. They can also be integrated with other renewable sources, such as wind or hydro, to increase reliability and efficiency. One example of this solution is Nepal, where solar microgrids and home systems have been deployed to provide clean electricity to communities without access to the grid. Similar conditions exist in many parts of Pakistan, particularly in rural and mountainous regions. Learning from Nepal’s experience, Pakistan can adopt a decentralized approach to solar power generation, extending electricity access to the most remote areas.
Pakistan can also emulate India’s approach by implementing central and state-level schemes aimed at deploying both off-grid and grid-connected solar irrigation pumps. These systems not only reduce the carbon footprint of agriculture but also promote gender equity by providing easier access to water for women who often bear the burden of fetching water for their families. By harnessing solar energy for irrigation, Pakistan can improve food security, reduce greenhouse gas emissions, and enhance rural livelihoods.
While these global examples offer inspiration, it’s essential to recognize that each country’s energy landscape is unique. Pakistan must address several challenges in adopting solar solutions, including policy frameworks, financing mechanisms, and infrastructure development. Additionally, ensuring the proper maintenance and operation of solar systems is crucial to their long-term success. Solar panels in Pakistan are brought into the market are imported as modules or panels, or as CKD (Completely Knocked Down) units that need to be assembled locally. Currently, the government does not charge any duties or taxes on photovoltaic cells, whether they are imported as modules or panels. However, the government does charge GST on all other materials that are used to assemble the panels locally. This creates a disadvantage for local manufacturers or investors who want to set up assembly plants in Pakistan. They have to pay 11% more than the importers of fully built panels. This situation is unfair and discourages local production and investment in the solar industry. The government should take steps to create a level playing field for all players in the market. One way to do this is to remove the taxes from all parts and materials that are used to assemble the panels locally. This would make local assembly more competitive and attractive.
In conclusion, Pakistan stands at a crossroads in its energy journey. The adoption of solar panels and related innovations from around the world can be a game-changer. By implementing PAYGO systems, expanding solar microgrids, and promoting solar irrigation pumps, Pakistan can transition to a cleaner and more sustainable energy future. Through strategic planning and collaboration, it can transform its empower its citizens and mitigate the impacts of climate change while reducing dependance on petroleum and gas in its energy mix.
This article was first published in Dawn supplement on 21st September 2023.