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

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

Energy Policy, 2018, vol. 119, issue C, 704-722

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.

Date: 2018
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:119:y:2018:i:c:p:704-722

DOI: 10.1016/j.enpol.2018.04.071

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