Socio-technical Inertia: Understanding the Barriers to Distributed Generation in Pakistan

Naila Saleh and Paul Upham

Economics of Energy & Environmental Policy, 2022, vol. Volume 11, issue Number 1

Abstract: In a bid to promote renewable energy, Pakistan issued net-metering regulations in 2015 that allowed for on-site solar and wind generation. However, five years on, overall growth in Distributed Generation (DG) remains insignificant. Here we investigate the reasons why, focusing on solar prosumage and exploring the key barriers and challenges in the existing socio-technical regime. The paper draws on document analysis; the views of key stakeholders including distributed solar PV adopters; end-users who have not yet adopted solar prosumage; the electricity distribution companies who are primary intermediaries responsible for implementing the regulations and connecting the end-users to the grid; commercial banks financing solar PV; and relevant authorities. We identify the obstacles to solar prosumage as including: difficulties in acquiring finance (especially in the case of smaller systems); under-facilitation of net-metering by electricity distribution companies, including an absence of Fee for Service models such as third-party investors; an awareness gap (especially on net-metering facility); and fragmented governance and regulations. We conclude that to succeed in the context of prevailing conditions, realistic implementation action plans based on the alignment of institutional coordination and cooperation, finance, and business model solutions, mandated and backed by significant national and regional policy level support, remain critical.

JEL-codes: F0 (search for similar items in EconPapers)
Date: 2022
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