Optimizing Solar Incentives and Grid Infrastructure in Pakistan Can Benefit Power Distribution Companies and Energy Consumers - Energy Central

Optimizing Solar Incentives and Grid Infrastructure in Pakistan Can Benefit Power Distribution Companies and Energy Consumers | Energy Central
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Optimizing Solar Incentives and Grid Infrastructure in Pakistan Can Benefit Power Distribution Companies and Energy Consumers

- Aug 23, 2024 1:46 am GMT
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Investing in the grid and addressing inefficiencies in the power sector are necessary for greater renewable energy adoption

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(IEEFA Asia) -- As solar panel prices in

"With rapidly decreasing solar panel costs and rising consumer electricity tariffs, distributed solar photovoltaic (PV) systems in

However, the recent surge in net-metered rooftop solar PV capacity has raised concerns among DISCOs about system reliability and increased capacity payments for non-net-metered consumers.

The government is currently considering several changes, including reducing buyback rates, and transitioning from net metering to net billing. Other proposed measures include creating a separate tariff category for net-metered consumers and limiting their system size allowance.

"Our report shows that a moderate reduction in buyback rates could provide relief to DISCOs while still encouraging self-consumption," says Isaad. "The timing of these policy changes is crucial. While a revised policy with reduced incentives could be implemented immediately for new installers, a gradual phase-out of the current policy every quarter would offer a transitional period for both new and existing net metering beneficiaries."

"We recommend that consumers select the appropriate system size for their consumption needs, as this can significantly impact their return on investment. In addition, the government can optimize both the buyback rates and the grid system to promote further renewable energy adoption," says

Optimizing the net billing mechanism

The country's current Distributed Generation and Net Metering Regulations were first adopted by the

Under the current net metering regulations, excess energy generated from net-metered solar systems can be sold back to the grid at the National Average Power Purchase Price (NAPPP), which reflects the average cost per unit of power purchased by the DISCOs.

Under the current value of NAPPP, an attractive

"This report shows that lowering the buyback rate to

The report finds that net metering remains particularly advantageous for average-sized systems, such as a typical 10kW installation, especially for consumers who utilize a higher share of generated output.

A proposed shift to net billing could lengthen payback periods for consumers with a higher self-consumption ratio, but it may also encourage the installation of oversized systems as consumers seek to maximize returns and minimize payback periods.

"Combining a reduced system limit with a net billing regime could discourage the installation of oversized systems while promoting the shift toward hybrid systems with battery energy storage," says Isaad.

The report also examines the impact of reducing the system size for distributed generators to 80% of the sanctioned load.

"This results in a longer payback period compared to the standard net metering mechanism. The increase is most pronounced under the net billing scheme. However, limiting the system size could encourage a shift towards battery-based hybrid systems, offering greater autonomy from the grid and increased self-reliance," says Shah.

Current regulations in

However, a lack of programs supporting small and medium-sized consumers has led to distributed solar adoption being concentrated among the more affluent sections of society.

"This concentration of surplus power adjustment in a few distribution transformers increases the risk of overloading. Restricting system size could ensure a more equitable distribution of solarization and protect the distribution infrastructure," says Isaad.

The report also examines case studies in

"Recently,

In the long term, the report recommends greater investment in performance monitoring systems to enhance real-time oversight of the distribution infrastructure. For consumers, achieving self-sufficiency in electricity generation should be the ultimate goal. IEEFA recommends a shift toward battery energy storage solutions, particularly as policy incentives for net metering are gradually phased out.

Read the report: The Future of https://ieefa.org/resources/future-net-metered-solar-power-pakistan)

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About IEEFA:

www.ieefa.org)

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Original text here: https://ieefa.org/articles/optimizing-solar-incentives-and-grid-infrast…

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