Is Solar the Future of Pakistan?

If you are planning to have a burgeoning solar energy industry, you can think of many complicated things that a country needs, such as a strong supply of photovoltaic panels, a robust regulatory environment, and a transmission infrastructure that can handle the distributed generation of electricity efficiently. But the most important thing is the sunlight and how much of it the country gets.

Luckily, Pakistan is blessed with sunlight. According to the experts, an area needs a minimum of four hours of peak sunlight in order for solar energy to be economically viable. The goods news for Pakistan is most of the country has 300 or more sunny days every year. Peak sunlight is not just any time between sunrise and sunset: it is when daylight is bright, and directly shining on solar panels.

According to a 2012 research paper by Saifullah Khan, Mahmood-ul-Hasan, and Muhammad Aslam Khan of the University of Peshawar,  the overwhelming majority of the landmass of the country gets seven or more hours of peak sunlight every year. Their research examined data from 1931 through 1990 for most of the country.

Therefore, with so much to support solar energy in Pakistan, the idea of an alternative energy makes sense in the world for Pakistan as a major source of electricity. Given the precipitous collapse in the prices of photovoltaic cells, which has dropped by more than 60% over the past decade, one would assume that solar energy would be more of an energy source for Pakistan.

However, the numbers tell a different story. For the 12 months ending January 2020, solar energy accounted for just 0.58% of Pakistan’s electricity generation, or 722 gigawatt-hours, according to data from the National Electric Power Regulatory Authority (NEPRA). That NEPRA data, of course, does not count solar electricity generated by private homes and businesses, and not connected to the national transmission grid.

Considering the imports of solar panels, they have risen from as little as $1 million in 2004 to a peak of $772 million in the fiscal year ending June 30, 2017. While they have since dropped down to $409 million in fiscal 2019, the country’s imports of solar panels appear to be a strong upward trajectory, growing at an average rate of 15.9% per year in US dollar terms (22.6% per year in Pakistani rupee terms) in the five years between 2014 and 2019.

The rift

With all that solar energy availability, there are issues of import quantities and market shares. For starters, Pakistan has a problem where all parts needed to install solar panels are imported, which makes things difficult. Local industry stakeholders say that the government does not assist them to build these materials themselves, while the government claims that the industry imports sub-par materials. As a result, the dream for 5% solar electricity coverage remains an elusive one.

Conclusion

However, increasing competition in solar installation companies has meant to remain competitive, companies were doing everything to bring down their prices, and the easiest way to do this is to import sub-par materials.