All you need to know to
power your home with solar
Solar
panels generally have a life of 25 years so they may be lighting up your
toddler’s wedding functions.
Fatima S
Attarwala Published July 4, 2022
Did the
world turn black when you saw your latest electricity bill? If so, you are not
alone.
The heat
demands air conditioning, electricity providers demand fistfuls of money, the
International Monetary Fund demands higher tariffs and Russian President
Vladimir Putin demands Ukraine’s annihilation.
But it is
impossible to explain the concoction of reasons to a toddler who just wants to
sleep with a teddy bear while the AC is running. Harnessing solar power is a
happy solution for those who can afford it.
Here are
some factors to consider before opting for a solar solution:
Quality
One can
take a gander down Regal Chowk in Karachi and pick up a solution that costs a
few hundred thousand rupees compared to a million-plus option that a branded
supplier could provide but it comes with its set of drawbacks.
The
solution providers at the lower price end tend to import a container of solar
paraphernalia and hire an everyday electrician to install it. Given its
technical nature, the lack of support may create some issues.
Shoddy-quality
solar panels can cause short circuits and sparks. In the best-case scenario,
the system will shut down and you will be chasing after the supplier that may
or may not be able to provide after-sales service.
“Even if a
top-tier branded solar solution was installed in your house, it can act up a
year or two after purchase,” says Musa Khan Durrani, the head of business and
planning at SkyElectric. “You call up your local supplier but he may have
switched his business to real estate and suggests you contact the manufacturer
directly.”
“In the
worst-case scenario, the sparks from inferior quality panels can start a fire,”
cautions Mujtaba Raza, CEO of Solar Citizen.
Read: The
imminent solar revolution
Registration
Reputable
solar providers are registered with the Alternative Energy Development Board
(AEDB). While AEDB in no way vets or guarantees the quality of the panels or
service, its registration allows the supplier to set up the net metering system
which is where all the cost savings lie.
Compare it
to buying a car: given the price tag and longevity of the purchase, you would
opt for a trusted name such as Toyota or Honda rather than an unknown entity,
if your budget permits. Solar panels generally have a warranty of 10-15 years
and a life of 25 years so they may be lighting up your toddler’s wedding
functions.
Solar
panels installed at a park in Peshawar. — White Star/File
Net
metering
Cost
savings lie in net metering, which is a billing mechanism that credits solar
energy system owners for the electricity they add to the grid.
A company
registered with AEDB can set up the net metering process on behalf of its
customer. According to its website, KE processes applications received by
AEDB-listed vendors only though this may not apply to all electric supply
companies.
For example,
you have a bungalow in Defence, Karachi, with a photo voltaic system on your
terrace. It may generate more electricity than you need during the day,
allowing you to sell the surplus to K-Electric.
Using the
numbers of your annual electricity consumption, some companies can offer you a
package that will bring down your electricity bill to zero. If your household
consumes Rs1,000 of electricity at night on average, you can sell Rs1,000 worth
of credits while the sun shines that can be availed after the sun goes down.
So during
the day, you would use your own generated solar energy and KE would purchase
the excess. Without batteries, at night, you would shift back to using
electricity by KE which means load shedding at night requires the use of the
good old generator running on the ever-pricey diesel.
To avoid
power outages completely, you will need batteries to store the electricity
generated while the sun is shining. There are different kinds of batteries,
from the tubular batteries you are familiar with from the UPS system to the
more expensive solar-specific solutions that can cost a further Rs250,000 per
kilowatt for a home solution from a reputable company.
Solar
solutions are less feasible for apartments because there is not enough open
space that gets direct sun exposure. Though arguably, common areas such as
parking can theoretically be solarised which may not take a complete load of
all the apartments but can subsidise electricity bills.
Solar
panels installed, near Mithi, in one of the approximately 480 reverse osmosis
plants across Tharparkar. — White Star/File
Upfront
cost and maintenance
Ali
Karimjee, a resident of DHA in Karachi, installed an 11kW solar system in 2018
that cost him about Rs1.1m. “With the credits I earn through solar, I don’t pay
electricity bills during the cooler months from November to March,” he says.
At the
previously lower tariffs, at the peak of summer, his bill did not exceed
Rs7,000-8,000 per month though three air conditioners, two fridges and an
assortment of household appliances run on electricity. As electricity tariffs
climb, he expects higher savings.
All this is
peachy keen but the cost of solar is a hefty one and rises with the exchange
rate. “As a rule of thumb, a normal household with three to four ACs and the
usual appliances requires a solution of 10kW which now costs roughly Rs1.3m
without batteries,” says Raza.
However, it
can go as high as Rs2m, says Durrani. A 10kW system, including batteries, can
cost between Rs1.8m to Rs3m but while the panels can last decades, the
batteries may have a life of only a couple of years.
Being
completely independent from grid electricity entirely is not the wisest of
options. Batteries are expensive and need to be replaced frequently, so it
could be upwards of an extra Rs300,000 every two years. If the purpose of the
PV installation is to decrease the electricity bill, then a hybrid solution
adds up to the most savings. If the purpose is to thumb your nose at KE, than
by own means, go ahead.
A small
additional cost is related to maintenance which involves washing the solar
panels frequently. “A man comes to service my solar panels every week,” says
Karimjee. “I pay him Rs3,500 per month.”
Read: Solar
financing — push needing a shove
Financing
How can one
afford a Rs1m-plus solar system? The State Bank offers financing at a flat six
per cent rate, which is not linked to the Karachi Interbank Offered Rate.
Generally, the tenure of the loan is three to five years with a down payment of
20pc equity.
Depending
on electricity consumption and the amount spent on the solar solution, what you
owe the bank could tally up to a smaller figure at the end of the month
compared to your bill. For example, if you spend Rs25,000 a month paying off
the bank when your electricity consumption is at Rs40,000, you will be saving
money, even with a loan.
Keep in
mind that while electricity tariffs increase, the amount of instalments remains
constant so your savings will increase in proportion to the rise in energy
rates.
However,
banks take months to process solar loans, industry insiders complain. Given the
technology involved, panels and assorted parts are imported and the rapid
depreciation of the rupee jacks up prices. A few months down the road when the
loan is finally processed, the cost of the package could have risen as well.
