Islamabad: A report titled \u201cThe Distributed Divide \u2013 How Solar Expansion Affects Non-Adopting Consumers and Utility Economics\u201d and released by Arzachel, reveals that non-solar consumers have borne a staggering burden of Rs200 billion in fiscal year 2023-24 due to the rapid expansion of solar energy adoption. This transition has caused an estimated tariff increase of Rs2 per kilowatt-hour (kWh) for grid-dependent consumers, underscoring the financial burden and inequities stemming from the insufficiently managed expansion of solar adoption through behind-the-meter systems and net metering. Without immediate regulatory intervention, the financial burden on non-solar consumers is projected to escalate further. For the current fiscal year, a 5% reduction in grid demand, driven by solar integration, is expected to shift an additional Rs131 billion in annual costs to non-solar consumers, doubling to Rs261 billion if grid demand reduces by 10%, according to the study. To address these pressing challenges brought on by rapid and under-regulated solar adoption, the report calls for immediate regulatory reforms and targeted policies to ensure equitable cost distribution and grid stability. The report recommends transitioning from net metering to net billing or feed-in tariff (FiT) systems to lower rates and system marginal costs, introducing fixed grid access fees to reflect actual service costs, and establishing an ancillary services market to enhance grid stability. It also advocates revising the distribution code to manage bi-directional power flow and ensure energy equity through fair cost allocation, balancing renewable energy benefits with grid sustainability. The report highlights that the rising adoption of rooftop and behind-the-meter solar installations has significantly reshaped Pakistan\u2019s energy demand profile. As per the study\u2019s estimates, an average 10kW net metering system enables a consumer to avoid grid costs of Rs20 per unit, while behind-the-meter installations allow consumers to bypass an average of Rs7 per unit in fixed costs. Web Desk
\nWhile solar adopters benefit from substantial savings, the resulting drop in grid demand has caused energy sales to plummet by 8-10% during daylight hours, shifting the burden of fixed costs and grid maintenance to non-solar consumers.
\nThe research underscores the technical challenges faced by DISCOs (distribution companies), including voltage instability, reverse power flows and increased demand for ancillary services such as frequency regulation and reactive power support.
\nThese issues require significant infrastructure investment, further exacerbating the financial strain on the energy sector.
\nThe report predicts that Pakistan\u2019s grid will soon face the \u201cduck curve\u201d phenomenon, marked by sharply reduced demand during midday \u2013 when solar power generation peaks \u2013 followed by a steep rise in demand in the evening, complicating grid management and operational planning.
\nWithout reforms, this dynamic could trigger a \u201cdeath spiral,\u201d a cycle of rising tariffs, declining grid revenues and further consumer defection to solar, threatening the long-term sustainability of the energy sector.<\/p>\n","protected":false},"excerpt":{"rendered":"
Islamabad: A report titled \u201cThe Distributed Divide \u2013 How Solar Expansion Affects Non-Adopting Consumers and Utility Economics\u201d and released by Arzachel, reveals that non-solar consumers have borne a staggering burden of Rs200 billion in fiscal year 2023-24 due to the rapid expansion of solar energy adoption. This transition has caused an estimated tariff increase of […]<\/p>\n","protected":false},"author":2,"featured_media":445427,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-445402","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"\n