After months of speculation on Solar Net Metering in Pakistan, and on how the government will increase taxes and electricity bills for the users, the Economic Coordination Commission (ECC) has finally reduced the buyback rate by 2/3rd to Rupees 10 per unit, and scrapped the net billing system. This decision was taken today during the meeting of the ECC, and was presided over by Finance Minister M. Aurangzeb.
What is Solar Net Metering in Pakistan?
This means that under the new solar net metering operating framework, consumers will now sell electricity to the power companies at 10 rupees, and buy electricity from these power companies at anywhere between 42 Rupees (during the off-peak hours) to 48 Rupees (during peak hours) – and this excludes the taxes and duties.
To further crush the consumers, under this new solar net metering policy, they will now not be allowed to install solar capacity which exceeds their sanctioned load except for a 10% cushion. Prior to this decision, customers were allowed a 50% margin.
The following is part of the statement given by the Finance Division:
“As part of the approved changes, the ECC has revised the buyback rate from the National Average Power Purchase Price (NAPP) to Rs10 per unit. The revised framework will not apply to existing net-metered consumers “who have a valid license, concurrence, or agreement under the Nepra (Alternative & Renewable Energy) Distributed Generation and Net Metering Regulations, 2015. Any such agreements will remain effective until the expiration of the license or agreement, whichever occurs first. This ensures that the rights and obligations of these consumers, including agreed-upon rates, will continue as per the existing terms”.
Anticipating the widespread criticism that the division would get from the public, the Power Division has been justifying the policy change by stating that the current net metering customers were causing a 9 paisa per unit impact – which means that a total impact of Rs. 101 billion was being made. They also presented estimates that if changes aren’t made, this could turn into Rs. 545 billion by 2034.
However, an official discussed how the salaried urban customers who are already drowning in high taxes and bills due to the expensive and unreliable grid electricity, will suffer even more. He also discussed how these users will now invest in costly battery storage to go off the grid to save on ballooning energy costs.
AoA Allena,
I have read your concernes.Its very rational.
But
I think, this deal will not workable for general public and hence Govt. will face the following results soon because.
1)
Why people will sell energy @ PKR 10/ Unit and buy it back at PKR 50 or 60 / Unit at evening. It is not workable BECAUSE People will store this unit in their own battery bank the unit will cost them @ PKR 23/Unit ( Depreciation cost of batteries ) In this way they will definitely not prefer to buy energy from wapda , because wapda is highly expansive as compare to buy their own Lithium battery Packs.
2)
Intitial Contracts will apply till their retirement.So Govt will get nothing extra from existing users.
3)
Because of the sake of ZERO BILL people mostly intended to installed approximately double capacity of panels, than needed , so that they can get rid of wapda bills by selling power @ Rs 27/Unit .
NOW .
Selling PKR 10 Verses Buying PKR 50/60 is massive difference so people are unable to install 5 times more panels at their rooftops , Due to investment and space constrains . But they can definitely install Lithium batteries in spite of 4 times solar panels . Also they will prefer to install panels as per their requirements because return on investment will be highly compromised , so why people will invest on extra panels if they will get more by installing some batteries in their system.
THIS will impact directly on govt power production cost. Because people will discourage to install extra panels over their precise need , and why should they install EXTRA if there is no profit ? As well there is very low price of power selling and very high price of power purchased.
As a result , Client will goes in profit as he can use battery power or minimal commercial power during summer or in night time , he don't need to buy expansive power from Wapda , he will utilize his battery stored power.
On the other hand Govt. will lose the buying of extra cheap produced energy which would be created as a result of extra panels installation trend , because of purchase price @ PKR 27/ Unit . This was the most economical buying of electricity for wapda / Govt.
This will lead to the following results.
1) Solar installer client was a definite client of Wapda in evening and , in new system Wapda will lose about 80% sales of power to the same client , as well as wapda will loose extra produced power due to lesser installed Solar panels.
2) As a result wapda need to operate thermal energy units so that shortfall can be managed on very high prices which will led in revenue loss to wapda due to expansive prices of thermal power as compare to solar power.
3) Country will need to import more fuel again , and this will impact on power prices as well , means energy prices will increased more.And bills of people will raised much more than current. And hence increased prices commodity will create more trend of consumer own power dependency , and which is solar power- OR No fuel power.
So as per my opinion this scnerio will not be functional or profitable for Wapda , but it will be more attractive and profitable for consumers , so Solar industry will expand with more velocity.
Thankins
Naveed Iqbal Bhatti
Still facing issues