By Asad Ullah Kamran
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ventually, we’re all going to have to rely on the sun. That much is an unfortunate (or fortunate depending on how you look at it) fact. Pakistan has continued to lag behind in electricity production over the decades with coal, oil, and hydel production all failing to effectively meet demand. And if the infrastructural problems were not enough there are the environmental realities that make our reliance on the sun inevitable. In such a situation, while commercial use might be a little far, a lot of domestic users in the country have already become early adopters of solar technology. Seeing homes, mosques, small businesses, parks, and street lights powered by solar panels is a common enough sight all over the country. Surprisingly the technology has even permeated in lower-income neighbourhoods as well as smaller cities. And why would it not? With electricity a growing cost, the unit economics of going solar more than make sense. There is very much a future, in fact, where middle and upper-middle class households should be powered by solar energy to the extent that they also have cheaply available electric cars that they can fuel through the sun and run completely off the grid. Energy from the sun is being wasted until we use it. But what does a person need to understand before they make the decision to go solar? What are the different kinds of options available? If you’ve been considering getting a solar energy solution for your home, there are some
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things that you should know before making your decision. Pakistan has been experiencing load shedding for over a decade now, this makes it an ideal market for residential solar solution providers. Solar technology has a high initial investment cost, but it has a cheap running cost and a long service life. The ability to finance a PV system reduces the initial cost of purchasing the system and distributes the cost over time while the system is already saving money on power bills. This makes solar more accessible to people who can’t afford to pay for the system all at once. Although essentially when looking at the solar energy solution the ideal goal is maximising the efficiency in terms of cost and benefit. Whether or not the investment is worth it or not, to do this start with the data around as in your utility bills. For going solar it is important to understand your own requirements in terms of units consumed and having an estimate range you’re willing to spend. Now to get an idea of what you’re consuming is to look at your utility bill, use the data for the entire previous year to get a more accurate assessment.
The economics of going solar
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f, for instance, you’re looking for a 5kW system for your home it is important to ask the right questions before making the purchase. After taking into consideration multiple sources, a 5kW system costs around
Rs700,000 to 1,000,000 and is expected to produce anywhere from 6,000-7,000 units in the year. To calculate the per unit cost of electricity you’re getting from the system, multiply the annual units produced by the system over the span of it’s warranted life span, usually solar panels last over 25 years. Using 6,500 units as a benchmark annually for a system and costing Rs850,000 for this calculation, we get an approximate 162,500 units over the course of systems life, dividing the total cost of the system by this number would give the per unit cost of Rs5.23 per unit. The benefit from going solar is very evident, if you just take a look at the utility bill. For the period of 12 months stretching from March last year the total electricity I consumed was 6,261 units at an average cost of Rs 24.87. The benefit is quite obvious from here on out as the difference between the cost per unit is Rs 19.64. Furthermore, any further increase in the energy prices in the future would only help you save more costs. Now if the system in an annual year produces 6,500 units whilst considering the annual consumption remains constant, the system would yield an annual benefit of Rs127,663. Using this calculation you can figure out the time it would take for the system to pay for itself, by dividing the total cost of the system by the annual benefit. The payback period for the system would take six to seven years based on the numbers from the example above. Using the numbers from the example above you can safely conclude that going solar is
