Amir Saeed

Pakistan’s solar energy sector is expanding, but challenges such as grid integration issues and policy uncertainty threaten its further growth. There’s a need for a clear and consistent policy and robust regulatory framework to ensure that these promising distributed technologies provide a win-win proposition for the consumers and electric grid, reports WealthPK.

The country has made significant progress in solar energy uptake, as highlighted in the NEPRA’s State of the Industry Report 2024. By June 2024, the country had integrated over 156,372 distributed solar facilities, with a total installed capacity exceeding 2,200MW. This progress reflects Pakistan’s commitment to renewable energy through its net-metering regime, which allows consumers to generate and sell excess electricity back to the grid.

The report points out the ambitious targets in the Indicative Generation Capacity Expansion Plan (IGCEP) 2022-31, aiming for an additional 3,420MW of renewable energy by 2031. However, challenges such as transformer overloading and generation losses during load-shedding periods threaten to undermine these efforts. The existing grid infrastructure struggles to accommodate the rising influx of solar energy, raising concerns about reliability and efficiency.

Moreover, policy uncertainty complicates the landscape for renewable energy adoption. The recent electricity price hikes have driven consumers to seek solar alternatives, impacting the utility revenue streams. The National Electric Power Regulatory Authority’s (NEPRA) report emphasizes the need for an overhaul of the distribution companies (DISCOs) to enhance efficiency and address the governance issues that contribute to circular debt and high system losses.

Talking to WealthPK, Dr Shahid Rahim, a senior energy professional with extensive experience in sustainable energy and power systems, highlighted that solar technologies face significant hurdles, particularly in terms of grid integration and policy uncertainty. Rumours are that alarmed by the rapid growth in consumer-sited solar (photovoltaic) installations, the government is reconsidering its approach to net metering and considering imposing import levies, which may negatively impact further adoption of distributed solar energy systems in the country.

“Most of the solar installations are behind-the-meter and non-grid-interactive, implying the need for a robust regulatory framework to facilitate distributed technologies like the solar. While technical challenges such as reverse power flow and adverse impacts on the supply quality complicate grid integration, these are not insurmountable and can be addressed through effective planning and system design.”

He further highlighted that the potential benefits of distributed solar power far outweigh its drawbacks, including the reduction of capital investment, operational costs, losses, dependence on foreign technologies and fuels, and costly centralized infrastructure. To foster continued growth in this sector, it is essential that the government views distributed solar energy as a partner rather than a threat to its objective to serve the energy needs of our people and economy.

“A comprehensive legal and regulatory framework is needed to create a level playing field for the solar energy to compete with traditional sources. The NEPRA must facilitate innovative pricing models and ensure fair compensation for the consumers contributing to the grid,” he suggested. “As Pakistan’s solar expansion offers significant opportunities for economic and environmental benefits, it requires a careful regulation to ensure a balanced and sustainable energy future.”

Credit: INP-WealthPk