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On the competitiveness of grid-tied residential photovoltaic generation systems in Pakistan: Panacea or paradox?

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  • Aqeeq, Muhammad Arsalan
  • Hyder, Syed Irfan
  • Shehzad, Farrukh
  • Tahir, Muhammad Arsalan

Abstract

Pakistan is experiencing a slow uptake of grid-tied residential PV generation Systems (GTRPVGS); despite of steep fall in PV module price, higher solar irradiation and enactment of Net-metering by the Government. This slow uptake is attributed to the lack of awareness of four major stakeholders, namely the house hold, utility, financier and the policy-maker. This paper presents a coherent framework that addresses the concerns of the stakeholders using four country-specific parameters i.e. the local solar irradiation, PV system costs, borrowing and discount rates, and electricity tariffs; to compute NPV, IRR, payback period and levelized cost of electricity (LCOE). Assuming net-metering, we model the economic payoffs on self-consumption and sale of PV electricity at varying net-metering rates, system sizes, load-to-generation profiles, borrowing and discount rates. Findings suggest economic competitiveness of PV electricity, with an IRR and payback averaging around 28% and 5 years respectively. Moreover, the LCOE is also found to be significantly lower than the retail rates. The findings inform the household and financier on the economic yield; utility on efficient tariff setting; and government on sustainable policy design. Finally, we argue that GTRPVGS bears huge potential for Pakistan, suffering from energy deficit, unsustainable cost, transmission losses and environmental hazards.

Suggested Citation

  • Aqeeq, Muhammad Arsalan & Hyder, Syed Irfan & Shehzad, Farrukh & Tahir, Muhammad Arsalan, 2018. "On the competitiveness of grid-tied residential photovoltaic generation systems in Pakistan: Panacea or paradox?," Energy Policy, Elsevier, vol. 119(C), pages 704-722.
  • Handle: RePEc:eee:enepol:v:119:y:2018:i:c:p:704-722
    DOI: 10.1016/j.enpol.2018.04.071
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    Citations

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    Cited by:

    1. Fahad Bin Abdullah & Rizwan Iqbal & Falak Shad Memon & Sadique Ahmad & Mohammed A. El-Affendi, 2023. "Advancing Sustainability in the Power Distribution Industry: An Integrated Framework Analysis," Sustainability, MDPI, vol. 15(10), pages 1-28, May.
    2. Cristea, Ciprian & Cristea, Maria & Birou, Iulian & Tîrnovan, Radu-Adrian, 2020. "Economic assessment of grid-connected residential solar photovoltaic systems introduced under Romania’s new regulation," Renewable Energy, Elsevier, vol. 162(C), pages 13-29.
    3. Fahad Bin Abdullah & Rizwan Iqbal & Sadique Ahmad & Mohammed A. El-Affendi & Maria Abdullah, 2022. "An Empirical Analysis of Sustainable Energy Security for Energy Policy Recommendations," Sustainability, MDPI, vol. 14(10), pages 1-28, May.
    4. Sabina Scarpellini & José Ángel Gimeno & Pilar Portillo-Tarragona & Eva Llera-Sastresa, 2021. "Financial Resources for the Investments in Renewable Self-Consumption in a Circular Economy Framework," Sustainability, MDPI, vol. 13(12), pages 1-17, June.
    5. Bhandary, Rishikesh Ram & Gallagher, Kelly Sims, 2022. "What drives Pakistan’s coal-fired power plant construction boom? Understanding the China-Pakistan Economic Corridor’s energy portfolio," World Development Perspectives, Elsevier, vol. 25(C).
    6. Wang, Hanjie & Maruejols, Lucie & Yu, Xiaohua, 2021. "Predicting energy poverty with combinations of remote-sensing and socioeconomic survey data in India: Evidence from machine learning," Energy Economics, Elsevier, vol. 102(C).
    7. Fahad Bin Abdullah & Rizwan Iqbal & Sadique Ahmad & Mohammed A. El-Affendi & Pardeep Kumar, 2022. "Optimization of Multidimensional Energy Security: An Index Based Assessment," Energies, MDPI, vol. 15(11), pages 1-25, May.
    8. Zhang, Minhui & Zhang, Qin, 2020. "Grid parity analysis of distributed photovoltaic power generation in China," Energy, Elsevier, vol. 206(C).

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