Renewable energy sources are becoming more and more important as Pakistan’s energy sector undergoes a major shift. Solar energy stands out among these because of its special benefits. To find out which renewable energy source best suits the various demands of Pakistan’s regions and sectors, it is crucial to compare solar energy with other renewable sources like wind and hydro. 

Solar Energy: Harnessing the Power of the Sun

In Pakistan, solar energy has become a major renewable resource, especially in areas with lots of sunshine. Among its advantages are:

Scalability: Solar provide versatility to satisfy different energy demands, ranging from modest household configurations to big commercial projects.

Cost-Effectiveness: A wider range of people may now obtain solar energy through incentives like net metering and reduced installation prices.

Minimal Environmental Impact: Solar panels help cut greenhouse gas emissions by producing clean energy with a small environmental impact. 

Wind Energy: Tapping into Natural Air Currents

A viable substitute is wind energy, particularly in high-altitude and coastal regions. Important things to think about are:

High Energy Potential: Areas with substantial wind corridors that can provide a sizable amount of electricity include Sindh.

Infrastructure Requirements: Significant investments in technology and infrastructure are necessary for the efficient production of wind energy.

Intermittency: Depending on wind patterns, wind energy production might fluctuate, requiring backup plans.

Hydropower: Utilizing Water Flow for Energy

With multiple sizable dams already in place, hydropower has long been a renewable energy source in Pakistan. It has the following qualities:

Proven Technology: Hydropower is a dependable and well-understood energy source.

Large-scale generation: Able to support national grids by producing substantial volumes of electricity.

Impacts on the Environment and Society: Big dams may have ecological repercussions and force communities to relocate, which raises questions about sustainability.

Final Thoughts: Selecting the Best Renewable Energy Source

Geographical location, energy requirements, and environmental conditions are some of the variables that determine which renewable energy source is best for a particular application in Pakistan. Many find solar energy to be an appealing option due to its broad applicability and little environmental impact. Other potential choices are wind and hydropower, especially in areas with plentiful resources and feasible infrastructure.
Consulting Shams can offer customized solutions that fit certain demands and situations for companies and homes looking to lower energy expenses and environmental impacts. For more details, contact us at (+92) 0341 7426777, email sales@shams-power.com.

With environmental issues, rising electricity prices, and energy shortages in Pakistan, solar energy provides a sustainable answer to the urgent energy issues facing the country because of its plentiful sunshine and other benefits associated with it.

Harnessing Abundant Solar Potential

Pakistan is fortunate to get high levels of solar radiation, with an average of 5.5 to 6 kWh per square meter each day. This natural advantage puts the country in a good position to utilize solar power to its full potential, particularly in the provinces of Sindh, Punjab, and Balochistan. One example of this potential is the Quaid-e-Azam Solar Park in Bahawalpur, which produces a significant amount for the national grid.

Addressing the Energy Crisis

Pakistan has been faced with persistent power outages and an increasing gap between demand and supply for energy. With their overdependence on imported fossil fuels, the conventional power generation methods cannot match the increased demand, leading to prolonged load shedding and reducing industrial output. Particularly in remote and rural locations, sunlight energy represents a secure and decentralized option that helps minimize reliance upon the national grid and provides a continuous supply of electricity.

Economic Advantages and Cost Savings

There are various economic benefits of transitioning to solar energy. With the global decline in solar panel prices, the initial investment in solar installations has become more accessible. Moreover, net metering policies allow businesses to sell excess electricity back to the grid, turning their premises into energy producers and reducing electricity bills. Over time, the savings from reduced energy costs can outweigh the initial installation expenses, offering long-term financial relief.

Environmental and Health Benefits

Solar power, when in operation, produces no greenhouse gases and is hence a clean and renewable source of power. With reduction in the consumption of fossil fuels, Pakistan can effectively reduce its carbon footprint and play its part in the international efforts of slowing climate change.  Additionally, better public health outcomes, such as a decrease in cardiovascular and respiratory disorders, might arise from improved air quality brought on by less pollution.

Job Creation and Economic Growth

There are ample opportunities for career development in the solar energy industry in different sectors such as manufacturing, installation, maintenance, and research & development. The need for trained professionals is increasing with the need for solar solutions, creating job opportunities and triggering economic development.

Government Initiatives and Policy Support

The government of Pakistan has taken a series of measures to encourage the usage of solar energy since it understands the importance of renewable energy. They include advantageous net metering policies, tax exemption on solar equipment, as well as subsidies for solar solutions utilized in agriculture. These efforts seek to promote large-scale utilization of solar energy by making it accessible to the general public.

Enhancing Energy Security

As it is mostly reliant on imported fossil fuels, Pakistan is subject to global market fluctuations and supply disruptions. With investment in solar power, the nation can de-risk its energy dependence on outside sources, raising national energy security and providing a consistent source of electricity for the population.

Conclusion

For Pakistan, a shift to solar power is not only a necessity for the environment but also for society and the economy of the nation. The country can end its energy crisis, enhance economic growth, and lead towards a bright and sustainable future by embracing solar power. In order to use the sun’s power to illuminate Pakistan’s future, it is essential that policymakers, citizens, and entrepreneurs join hands and invest in solar choices as we progress towards 2025.

Visit Shams Power to learn more about solar energy options and how you can contribute to Pakistan’s solar revolution.

What is a net metering bill?

The process of recording surplus energy produced by a solar installation and crediting it to the customer’s bill as a credit toward energy drawn from the grid is known as net metering. It’s been the law in many Pakistan locations for years and is a rather simple method of rewarding solar panel owners for their contributions.

Profitable incentives like high repurchase rates, fixed long-term generation licenses, and sizable allowances for installed capacity are provided by Pakistan’s present Distributed Generation and Net Metering Regulations. Due to favorable payback times brought about by these regulations, net-metered rooftop solar PV capacity has recently increased nationwide as a result of the sharp decline in solar photovoltaic (PV) prices on a worldwide scale.

Net metering credit value

Each kWh credit is equivalent to one kWh under real net metering, and they can be exchanged for grid energy whenever they want. Sometimes the credit is less than the retail value of a kWh, but other times it may be exactly the same.

Time of use rates

Under time of use (TOU) rate plans, which are provided by certain utilities, the price of energy varies according to the amount of time it is utilized. On weekdays, when most companies start using their appliances, the grid often experiences its peak demand in the morning. The price of energy rises during these periods. 

There are at least two distinct charges for on-peak and off-peak periods in TOU rate plans. Owners of solar panels with TOU rates receive credit for the electricity their panels generate and deliver to the grid. 

So, what are the benefits?

Financial Savings

Through net metering, companies acquire electricity generation capabilities that reduce their need for conventional power supply systems. Solar power permits businesses to cut their electricity expenses through use of excess energy that was sent back to the grid over an extended period. Businesses experience reduced costs with better financial conditions through the implementation of this system.

Return on Investment

The financial gain generated by installing renewable energy systems to take part in net metering schemes presents itself as an attractive opportunity. The combination of cheaper electricity and possible earnings from excess electricity helps companies recover their initial solar panel expenditure. A successful financial return of initial investment funds emerges throughout the entire operational duration of the system for business users.

Independence in Energy

The ability to achieve power independence requires you to select the appropriate solar power system size. One major advantage of producing your own electricity is that it enables you to lower dependency on unstable conventional energy costs and preserves your operations from electric outages and energy supplier disruptions. Solar power inPakistan leads to companies benefiting from increased energy autonomy which strengthens their electrical supply reliability.

Sustainability of the Environment

The environmental benefits of net metering are among its many noteworthy features. Net metering lessens dependency on fossil fuels, which cause air pollution and climate change, by encouraging the use of renewable solar energy.

Grid Efficiency and Stability

The integration of distributed energy generation into the current power system is made easier by net metering. In order to improve grid stability and lessen the burden on centralized power generation, net metering participants feed back the excess electricity they create.

Conclusion

In conclusion, net metering offers solar owners a thrilling chance to produce a few additional units and lower their electricity costs. It reduces the payback period of your solar system in addition to helping you save money on your monthly expenses. Businesses, regulators and policymakers must all understand that choosing the appropriate incentives necessitates striking a careful balance. The government can promote the use of renewable energy by keeping or increasing buyback rates, but this needs to be combined with initiatives to digitize and optimize the grid. Businesses return on investment can be greatly impacted by choosing the appropriate system size and comprehending their consumption profile.

Pakistan portrays outstanding energy transition against a backdrop of increasing climate change effects and rising energy prices in today’s world. Due to the necessity for a reliable energy source and the rising cost of electricity, businesses are increasingly using solar energy.

Many Pakistani businesses find electricity prices so high and unstable that they have become practically unreliable. Companies now consider “load shedding,” or frequent power outages to be a normal occurrence and a way to reduce the strain on the grid. Certain operations may face fatal risks to employees because of summer temperatures over 40°C when cooling systems are essential along with fans.

Action Taken Due to Increasing Electricity Prices

Solar energy use has seen an increase in demand because of the combination between rising costs and uncertain supplies. Solar panel installations on business roofs have become common practice because companies seek to decrease their dependence on the nation-wide electric grid. This developing tendency results from society needing stable renewable power with sustained availability at reasonable prices.

Affordable Solar Energy

Prices for solar panels have dropped by 90% in the last decade, making solar energy more affordable for businesses. Government programs such as the elimination of the sales tax on solar panels and the introduction of net metering have further encouraged the use of solar energy.

Initiatives taken by the Pakistani Government

The Pakistani government comprehends solar energy’s value as a necessary power source for the country’s upcoming years. Additionally, they initiated a campaign to promote renewable energy development as a primary step as the aim is to achieve 30% renewable energy usage as a power source for Pakistan by 2030.

Environmental Benefits of Solar Power

1. Decreased emissions of greenhouse gases

One of the main advantages of solar panels for the environment is the reduction of greenhouse gas emissions. Unlike fossil fuels, solar energy is clean, renewable, and carbon-free. Using solar electricity enables commercial enterprises to reduce their environmental impact and take an active role in the worldwide effort to combat climate change.

2. Reducing air pollution

Air pollution is lessened by solar energy in addition to greenhouse gas emissions. Fossil fuel combustion releases sulfur dioxide, nitrogen oxides, and particulate matter, all of which greatly contribute to air pollution. The implementation of solar power systems by businesses helps minimize environmental pollution which results in better health conditions for their residents.

3. Conserving water

The procedure of generating power through conventional methods including coal and nuclear plants requires water for cooling purposes. The operating process of solar panels demands either minimal or nonexistent usage of water. This is especially helpful in a place like Pakistan where water conservation is essential.

Financial Benefits of Solar Power

1. Creation of jobs

The solar industry of Pakistan holds the ability to produce numerous new job positions. Solar power has the ability to support economic growth in Pakistan by employing skilled workers from diverse fields including research and development, manufacturing, installation and maintenance services.

2. Savings on energy costs

The utilization of solar energy proves to be financially advantageous for the long-term generation of power. A business can decrease its electricity expenses when it implements reliable solar power production methods.

Other Benefits of Solar Power for Pakistan

1. Increased efficiency of solar panels

Solar panels function at their prime level in Pakistan because summer provides both longer daytime hours and extra strong solar energy. The power generation from sunlight reaches its highest point in this season, giving Pakistan an opportunity to capitalise the economic and environmental benefits of solar power.

2. Reducing excessive power consumption

Important times of electricity consumption in Pakistan’s summer months become more manageable due to solar power generation. Thus, solar panels decrease electrical grid strain and eliminate the necessity for new power station development and associated environmental effects from electricity production.

Conclusion

There are several financial and environmental advantages to solar panels, especially in Pakistan during the summer. By using the nation’s abundant sunshine and solar energy, Pakistan may reduce its reliance on fossil fuels, combat climate change, and give us a better, healthier environment.

[vc_row][vc_column][vc_column_text]GuarantCo and Bank Alfalah provide Shams Power with a PKR 1.5 billion (c. USD 5.2 million) finance solution to invest in small solar plants in Pakistan

GuarantCo, part of the Private Infrastructure Development Group (PIDG), and Bank Alfalah have provided Shams Power with a PKR 1.5 billion (c. USD 5.2 million) finance solution to support the construction of 10 MW of small rooftop and ground mounted solar plants at commercial and industrial sites across Pakistan to reach grid connected businesses.

Shams Power is an established distributed solar developer with a total of 27 projects and an installed capacity of 25 MW across Pakistan. Eighteen projects with a capacity of 21.2 MW were completed and became operational under the first phase of the PKR 2 billion (c. USD 11.3 million) facility provided by GuarantCo and Bank Alfalah in December 2021.

The finance solution of PKR 1.5 billion (USD c.5.2 million) of senior debt provided by Bank Alfalah is 75 percent guaranteed by GuarantCo. The proceeds will support the construction of an additional c. 10 MW of solar projects across Pakistan. The second phase seeks to largely replicate the success of the first transaction working closely with the same transaction partners including Bank Alfalah and Capital Resource.

Shams Power helps reduce carbon emissions and has a positive impact on mitigating climate change, through the provision of clean, sustainable solar power. Both transactions will make a further contribution to the transformation of the rooftop solar market in Pakistan by demonstrating the ability for rooftop solar providers to access debt funding and scale up. This will allow the unlocking of more solar potential and help build the capacity of energy and financial regulators in this area. It will also create a supportive and practical regulatory and financial framework whilst building the capacity of banks that are new to this asset class.

The financing solution will support solar projects across Pakistan, which will reduce reliance on the grid, save an estimated 10.2k of CO2 emissions per year, and contribute towards progressing the Sustainable Development Goals (SDGs) in the country. The transaction will make a direct contribution to SDG 7: Substantially increase the share of renewable energy in the global energy mix and SDG 13: Climate mitigation.

Business users will benefit from a saving of 30-50 percent on their electricity costs through the solar systems. The proposed solution increases businesses’ electricity reliability in case of black-outs and reduces their reliance on back-up diesel generators.

In addition, GuarantCo, through a PIDG Technical Assistance grant, is co-financing Shams’ Solar EmpowHer programme which provides the necessary knowledge and skills for female engineers in the solar industry to empower them and promote gender diversity in the solar sector.

Layth Al-Falaki, CEO of GuarantCo, said: “We are very pleased to have closed our second transaction with Shams Power in partnership with Bank Alfalah.  Our first transaction two years ago, has proven that the financing model is scalable, replicable and the need for guarantee support will hopefully reduce over time as private sector involvement increases and local currency financing for this asset class becomes more prevalent. This transaction supports Pakistan’s commitments to decarbonise its power sector and is aligned with PIDG’s 2023-2030 strategy. Through our partnership with Shams, we continue to support Pakistan in its ambition to improve energy access and provide economical, clean and consistent energy supply to businesses as they transition towards renewable energy.”

Omar Malik, CEO of Shams Power, said: “This additional PKR 1.5 billion milestone with Bank Alfalah and GuarantCo’s backing isn’t just about powering businesses, it’s about powering Pakistan’s clean energy goals and increasing competitiveness of the C&I sector of Pakistan. Building on our past success, we’re deploying another 10 MW, delivering reliable renewable energy and a brighter future to businesses nationwide. We’re not just talking cost savings and sustainability wins for our clients, but sparking job creation, strengthening energy security, and empowering women in the solar sector through our Solar EmpowHer program. We would also like to specially thank PFAN for championing this phase of our transaction, and to GuarantCo and Bank Alfalah for their continued support. Together, we’re not just scaling solar, we’re shaping a greener, more equitable Pakistan, one watt at a time.”

Atif Bajwa, CEO of Bank Alfalah, said: “Bank Alfalah is pleased to complete our second transaction with Shams Power in partnership with GuarantCo. This agreement will significantly expand the share of cost-effective, environment-friendly and renewable source of energy in the country, paving a way for a greener way forward.”

Asif Elahi, Managing Partner of Capital Resource, said: “It has been a real privilege working with Shams Power on this challenging assignment. I am pleased to have been part of this journey and advising the company, over the years, in successfully scaling up its operations and meeting its clean energy financing targets to become the market leader in the C&I solar space in Pakistan. I would also like to take this opportunity to acknowledge and thank the Private Finance Advisory Network (PFAN) for promoting and supporting Shams Power for this particular transaction and of course our long-standing development partners, GuarantCo for their continued commitment to private sector credit growth in Pakistan.”

Press contacts

GuarantCo Marjolein van KampenCommunications Director+44 (0)738 8857097Marjolein.van-kampen@guarantco.com

PIDG  Cecilie SorhusHead of Communications+44 (0)7917 302724cecilie.sorhus@PIDG.org

About GuarantCo

GuarantCo mobilises private sector local currency investment for infrastructure projects and supports the development of financial markets in lower income countries across Africa and Asia. GuarantCo is part of the Private Infrastructure Development Group (PIDG) and is funded by the governments of the United Kingdom, Switzerland, Australia and Sweden, through the PIDG Trust, the Netherlands, through FMO and the PIDG Trust, France through a stand-by facility and Global Affairs Canada through a repayable facility. GuarantCo is rated AA- by Fitch and A1 by Moody’s. GuarantCo’s activities are managed by GuarantCo Management Company which is part of Cardano Development www.guarantco.com

About PIDG

The Private Infrastructure Development Group (PIDG) is an innovative infrastructure project developer and investor which mobilises private investment in sustainable and inclusive infrastructure in sub-Saharan Africa and south and south-east Asia. PIDG investments promote socio-economic development within a just transition to net zero emissions, combat poverty and contribute to the Sustainable Development Goals (SDGs). PIDG delivers its ambition in line with its values of opportunity, accountability, safety, integrity and impact. Since 2002, PIDG has supported 171 infrastructure projects to financial close which provided an estimated 217 million people with access to new or improved infrastructure. PIDG is funded by the governments of  the United Kingdom, the Netherlands, Switzerland, Australia, Sweden, Germany and the IFC www.pidg.org

About Shams Power

Shams Power is Pakistan’s largest Commercial & Industrial (C&I) solar power developer, investing and setting up solar projects at C&I locations, saving on grid electricity costs from day 1 from clean solar energy at discounted rates. This model removes any CAPEX responsibility, Operations & Maintenance expense, and Equipment Risk for our Customers. The equipment is transferred to our customer at the end of the agreement, giving them free electricity for the remaining life of the equipment. Our clients include likes of Coca Cola, Mondelez, Metro Cash & Carry, Packages Group, Nishat Group, AkzoNobel Pakistan, Dandot Cement, Shifa International Hospital, and Maxim International amongst others.

About Bank Alfalah

Bank Alfalah is a leading commercial bank in Pakistan, boasting over 1000 branches across 200 cities and an international presence in the UAE, Bangladesh, Bahrain, and Afghanistan. The bank offers various products and services, including corporate and investment banking, consumer banking, securities brokerage, commercial, small and medium enterprises, agricultural, Islamic, and asset financing to private-sector institutions and governments.

In 2018, Bank Alfalah launched its digital banking group, setting a high standard for the industry to follow with its Alfa app. This revolutionary new application brings together an unprecedented range of services and features all in one convenient platform. In 2022, the bank was awarded the best ‘Digital Bank’ and ‘Housing Finance’ across Pakistan, highlighting its commitment to simplifying and improving the financial capabilities of its customers.

About Capital Resource

Capital Resource is a boutique corporate finance advisory and consulting firm with in-depth experience of facilitating private sector infrastructure and focus towards promoting clean energy financing. In the past, the team at Capital Resource has successfully advised private sector corporates in structuring complex financing solutions including local currency credit enhanced financing transactions backed by GuarantCo.[/vc_column_text][vc_column_text][/vc_column_text][/vc_column][/vc_row]

[vc_row][vc_column][vc_column_text][/vc_column_text][vc_column_text]Pakistan has primarily relied on non-renewable energy sources, particularly oil and gas, to satisfy its energy needs. Back in 2013, coal used to be the cheapest energy source, and Pakistan’s energy infrastructure was based around coal-powered power plants. Due to the depletion of domestic reserves and price hikes in the international market, coal has become an expensive energy source.

Pakistan imports more than a third of its gas and 50 percent of its gasoline oil. Based on a recent analysis by the Pakistan Bureau of Statistics (PBS), Pakistan imported petroleum products worth $17.033 billion in the first 10 months of the current fiscal year (2021–22). It brings about a drastic increase of 95.84 % compared to the previous year’s imports which was $8.697 billion.

If Pakistan fails to address this issue, its economy can collapse into a debt spiral, and the country will get financial assistance from International Monetary Fund. Hence, it is mandatory to maintain and develop independent renewable energy solutions such as Solar, Wind, or Water.

In this regard, the Government of Pakistan introduced The Indicative Generation Capacity Plan to fulfill the future energy needs of Pakistan.

Addressing at second Int’l Pakistan Energy Summit (PRES) 2022 in Islamabad, Power Minister Engineer Khurram Dastgir said: “hydel generation was the “mainstay” of the country’s energy and that despite its issues, it remained the most feasible source of energy in the long run. Interestingly the new magic bullet is solar, as we are told that solar rates are coming down. Therefore, the way forward is hydel plus solar and whatever wind generation we can develop.”

Pakistan’s Government sees Solar Power as a major solution to the energy crisis.

By keeping this in mind, the Government of Pakistan aims to achieve 20% of its electricity from renewable sources by 2025. Power Minister Engineer Khurram Dastgir stated that on August 1, 2023, an advanced solar energy scheme will be introduced to the public by Prime Minister Shehbaz Sharif. This scheme aims to highlight electrical issues and control the electricity prices that Pakistan is currently facing.

The Power Minister adds that the project will begin with installing seven solar panels where thermal energy plants already exist. The transmission wires are already there, so solar panels’ energy supply will be hassle-free. Moreover, there is also an ongoing discussion to install 1MW solar plants in underdeveloped areas of Pakistan. Doing this would assist in generating 2000MW of electricity just in the first stage.

Solar Systems will be installed at the Parliament House and the government buildings and offices to set an example of using solar energy. Likewise, non-renewable powered tube wells (e.g., diesel-powered tube wells in Balochistan) will also be converted to solar energy all over Pakistan to generate solar energy. The citizens will also be allowed to install solar panels ranging from one to three kilowatts in their houses. The cost of these modules will be recovered from saving on their electricity bills.

Before next summer, these schemes are expected to add 7000MW to 10000MW of electricity to the national grid system.[/vc_column_text][/vc_column][/vc_row]

[vc_row][vc_column][vc_column_text][/vc_column_text][vc_column_text]Climate change is undeniably a real issue resulting from global warming. The global population is growing at a 1.1% annual rate. The United Nations predicts that by the end of the century, there will be more than 11 billion people on Earth. To meet the fundamental demands of this rising population, global GDP must increase by roughly 3.5%. The researchers ‘RCP 8.5’ scenario predicts global warming up to 4 degrees Celsius if current conditions continue. Therefore, urgent action is required to solve the problem of sustaining the expanding population while reducing GHG emissions.

Why is it necessary to separate emissions from economic growth?

In the past, economists believed in the “Environmental Kuznets Curve,” which postulates that while economic growth initially causes environmental deterioration, the degradation rate reverses after a certain point. However, modern research has found that we run the risk of stepping outside the bounds of the planet even before the essential criterion of reversing environmental damage is reached. Considering these realities, academics and politicians are increasingly interested in separating economic growth and environmental challenges. At first resource efficiency was considered to be the decoupling approach. It has been noted that resource efficiency is connected to the “rebound phenomena,” where consumption rises directly to the efficiency attained. Hence, the experts have suggested structural modifications to take the “rebound phenomena” into account.

The average CO2 emission factor for a coal-fired power station is approximately 0.998 kg/KWh, compared to 0.015 kg/kWh for hydropower. Renewable energy sources like wind and solar have no operating emission factor. Consequently, there is a significant chance that increasing the amount of renewable energy in the energy mix will lower GHG emissions.

How to achieve growth and reduce emissions with Commercial Rooftop Solar System

Rooftop solar represents one of the most cost-effective ways to shift the energy balance. The price of electricity, net-metering regulations, corporate social responsibility, and customer knowledge are a few aspects that encourage industries to focus on maximizing rooftop solar’s potential.

One of the primary issues that industrial and commercial customers face is the upfront cost necessary for rooftop solar installation. However, the C&I sector can use Solar PPA contracts to solve this issue. In this approach, the energy service provider invests in the solar power plant and oversees asset operation and maintenance. Clients do not pay for capital investment and are expected to only pay a, mutually agreed-upon, fixed discounted tariff rate. The PPA model is anticipated to improve the rooftop solar system’s feasibility, consequently reducing the carbon footprint of electricity use, thus, separating economic growth from environmental degradation. Additionally, the lower cost of electricity will result in lower utility expenses, boosting profitability.

Challenges with rooftop solar and solutions

The use of rooftop solar energy is accompanied by several difficulties, including tidal and seasonal oscillations and the fate of solar panels at the end of their useful lives. The first can be reduced by continuing to rely on grid power. The second requires more research and development to find an environmentally responsible way to dispose of solar panels once their useful lives have passed.

Organizations can use the BOOT model under PPA contracts to rationalize rooftop solar rates and attain a sophisticated statistical and financial model program from the solar service provider. Those businesses who believe in PPA are working hard to find a reasonable tariff rate that would benefit both the service provider and the customers. The development of different green finance tools, including green bonds, can lower the cost of capital and, consequently, tariff rates. There is still much to be done for the rooftop solar business, which is still in its early stages. However, it is undeniable that widespread rooftop solar adoption will contribute to helping in increasing economic growth and reducing environmental deterioration.

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As technology has evolved in the renewable energy sector, opting for solar energy has become increasingly common in industries where coal is the main source of power generation. Numerous studies have shown that electricity produced by coal-fired power plants is more expensive than electricity produced by solar energy.

Moreover, solar energy is green energy which brings sustainability. Hence, contributing to the betterment of the environment by cutting down the carbon emissions is another important factor for firms switching towards solar.

The benefits of using solar energy over coal

The majority of people are already aware of the drawbacks, such as the increase in greenhouse gases brought on by coal usage. It includes significant pollution and is an inadequate resource that will gradually disappear.

Solar energy systems use an abundant supply of sunlight and can be installed on roofs, ground, or even car parking. Solar is a non-polluting source of green energy, which is a significant advantage for any large-scale organization. In contrast, the production of fossil fuels like coal degrades the environment. Many users might not be aware that using fossil fuels, in addition to producing greenhouse gas emissions, also causes the water supply to deteriorate and erode.

Pakistan has also taken some initiatives to reduce emissions of greenhouse gases. Due to this, Pakistan also participated in the 26th Conference of the Parties (COP26) to address critical issues such as climate change and its financial consequences.

Solar Power Plants: An affordable option for the C&I Sector.

The following important arguments demonstrate that solar power plants are less expensive than coal-fired power plants.

Solar energy is more environmentally friendly than non-renewable sources like coal and fossil fuels. As a result, electricity produced by a commercial rooftop solar system does not release greenhouse gasses and protects the environment from damaging carbon emissions.

No Capital cost in case of PPA

The PPA contract helps companies to avail solar energy supply without paying any capital cost for installing it on their land. So, the cost of installing on land gets erased. Shams Power’s expert team maintains a precise schedule for all operational maintenance. Throughout the PPA contract, our services will also include cleaning and maintaining the solar system.

Low Costs of Labour

Pakistan has the lowest labour costs, allowing the solar sector to hire many people, resulting in project completion at the absolute lowest pricing and making solar power plants less expensive than coal-fired power plants.

Price Reduction

The price sensitivity has given solar power plants the advantage. The cost of solar energy is determined by the complete analysis of the commercial solar power plant. Crucial parts like solar panels, inverters, and junction boxes are available for significantly less money, even if bought from international suppliers, compared to a coal unit’s energy production. Moreover, if the organization is getting solar energy under a PPA contract, it will only have to pay discounted rates for each energy unit consumed. Therefore, price sensitivity is a major factor that explains why solar is preferable over coal.

Available for the future

Energy Providers like Shams Power are supplying solar power plants at half the cost of coal. Energy storage will be essential in the upcoming years, so coal is scarce, and solar is an abundant power source.

In this regard, the government is also helping the C&I sector realize its long-term goal of elevating the solar industry to the next level.

Hence, the State Bank of Pakistan (SBP) recently announced that it will extend the Financing Scheme for Renewable Energy for two years, which will last up to June 30, 2024.

Shams Power

We provide solar services, including designing, financing, installing, checking, and continuous maintenance for your solar energy plants. We facilitate clients with lucrative solar opportunities so that they can run their businesses and contribute to the environment simultaneously.

For more details, please feel free to contact us here.