History of Micro and Mini Attacks on Solar Businesses

By Faiz Bhutta

First attack was done in 2014 when Taxes on import of solar panels were imposed and due to resistance by solar Industry associations the decision was taken back by the Government.

The second attack was done in 2014, when aggregate 50% duties and taxes were imposed on import of AGM and GEL batteries and AGM and GEL batteries went expensive and solar penetration slowed down. In 2014, the taxes on hybrid inverters were imposed by saying that hybrid inverters are used in UPS but inverters having no AC port were exempted.

The importers took out the AC port circuit from Inverters before importing to save themselves from taxes and then put back the AC port circuit after importing. This tax was a totally non-technical and illogical step. Attack on Net Metering

Then further to slow down the speed of solar installations, commensuration policy was imposed by which no person can import separately the components of solar PV system, and they have to import complete system only and qty of solar panels, inverters and batteries in a system must be as per design submitted to AEDB.

By this policy solar importers submit designs through excel based software and get permission from AEDB for import of system and whole day AEDB people went busy in approval of designs and allowing the import of solar PV systems as per design.

The importers started manipulating the designs to import the solar PV systems. The speed of penetration was further slowed down. This was a very difficult time for solar businesses. Until this time, the solar penetration was very low compared to other developing counties and it was less than 0.5 %.

Lot of debate started on net metering and finally NEPRA issued net metering SRO 892/2015. With this SRO, solar installations started at speed and the Government was happy to see this growth and used to take credit for this fast solar penetration in every statement and speech. It was a good step to speed up the solar installations.

Government projected in international media about fast growth of solar in Pakistan and international media appreciated Government of Pakistan. In view of this Prime Minster announced target of 1000 MW of solar on public buildings.

Then the renewable Policy 2006 expired in 2018, and the Renewable Policy 2019 was approved in 2020 and due to this delay, many containers were stuck at ports and tariff approval petitions were also struck with NEPRA because of the two reasons.

One old policy expired which was having waiver of taxes on import of 25 MW solar PV plants and Upfront tariff policy expired and new policy 2019 removed this limit and replaced upfront tariff by Tariff based on competitive bidding.

The delay caused losses to solar businesses because of the delay in approval of Renewal Policy 2019 and tariff petitions were held by NEPRA because of expiry of the old policy and delay in new policy. This process inflicted losses on importers and constructors of PV plants. This created a lot of hue and cry in the market.

In 2022 and 2023, the deficiency of dollars occurred, and imports of solar PV components were banned and prices of panels rose from Rs.50 to Rs.134 per Watt and it opened door of black and illegal marketing. Then restricted imports were opened. During this import ban period and restricted import period, many illegal import channels were practiced.

The import was opened to those who have dollars in the accounts, and this opened the door for rich trader mafia to import heavily the solar Panels and dumped solar panels in the market.

Due to speedy net metered installations, DISCOs started preparation to cap on it by saying their feeders are getting reversed and revenues started decreasing. Finally, ECC of the cabinet committee approved a new net metering policy which reduced the rate of export of units from Rs.27 to Rs.10 and stopped tradeoff between exported solar units with imported Grid units in off-peak time duration and both were treated separately called this as Gross Metering and additionally FBR put tax of 18% on import of the Grid units. Solar was again attacked.

The purpose of the policy is to encourage battery based solar systems. Next attack will be expected when more than 50% of the households, industries and commercial facilities will move to battery based solutions and will go off the grid and capacity debt will further increase and the next attack will be on battery based systems and taxes will be added and then old and new and users will invent other strategies to avoid this attack and then Government will plan other innovative attack and this hide and seek will continue and finally users can avoid any attack if they go back to wood heating and cooking and kerosene lamps and hand driven fans for cooling.

Here I would like to inform the readers and Government that in different countries the size of BESS (Battery energy Storage system) at solar Plants has been linked and limited to the solar PV modules output. This has been done to ensure grid stability, optimize renewable energy integration and manage excess power generation. Even in BESS case, the Government has to issue a policy to avoid attack when Battery based systems will increase from a certain limit.

During this whole history, Government has done zero planning to handle the adverse impacts of rising solar penetration thorough deployment of Innovative technologies as done in other countries rather to give inappropriate statement that capacity payments are paid by non-metered users, and net metered users are enjoying and treating both old and new as different.

It is concluded that the solar industry has been under continuous attacks because of ill planning by the Government. Government has to plan every initiative with all due limits to avoid further attacks and Government should ensure affordable, reliable, sustainable and modern energy for all as per Goal 7 of the SDGs ratified by the Government.

The writer is Solar PV Expert and can be reached at faiz.bhutta@gmail.com