Solar panel prices drop to record lows in Pakistan

That’s incorrect. The government is paying for unused electricity and have committed in writing that in case of failure to make a payment, the government can be sued in the International court outside Pakistan.

The terms for each IPPs varies as we have about 42 IPPs in Pakistan alongside many other partners in the energy sector

I've been doing some reading, the Benazir government gave sovereign guarantees to the IPPs in 1994. I couldn't find any information on when the contracts expire or if we are stuck in this for ever? How can a government make agreements like this, even if they were desperate, 10 year agreements would have suited them or create a break clause stating Pakistan has to pay a certain amount of compensation to dissolve the contract. It's like giving navy base to some nation for ever or make agreements on never to explore natural resources in your own nation for economic investments. I started to wonder what agreements we made with the British Empire for our freedom in 1947?
 
The government is paying for unused electricity
I found this:


But the numbers are staggering. For example:
"The defence budget is Rs2,200 billion, while capacity charges are Rs2,600 billion."

That doesn't make any sense. How can the entire Pakistan military run with smaller budget than payment for unused power?

Also, what does:

52% of IPPs are government-owned and 20% are Chinese-owned.

mean? Government is paying 52% of capacity charges to itself? Also, who are the non-government, non-Chinese IPPs?
 
I found this:


But the numbers are staggering. For example:
"The defence budget is Rs2,200 billion, while capacity charges are Rs2,600 billion."

That doesn't make any sense. How can the entire Pakistan military run with smaller budget than payment for unused power?

Also, what does:

52% of IPPs are government-owned and 20% are Chinese-owned.

mean? Government is paying 52% of capacity charges to itself? Also, who are the non-government, non-Chinese IPPs?
You need to know the history of IPPs to understand this problem and its 3:30am in UK right now.

Some IPP projects are too small and many are very large but in total they are 42 projects. Not all of them are making losses but most of them are…

Some of them are owned by Pakistani companies like Engro, Bank Al-Habib and many of them are owned by Pakistani politicians like Jahangir Tareen, Salman Shehzbaz Sharif etc.

But these are mostly small IPP projects compared to some owned by non-Pakistanis. There have been several contracts of IPPs but most of them were signed in 1993, 2002 and 2016 as far I remember. The ones originally signed in 1993 are expiring between 2024-2030 and the ones signed in 2002 will expire between 2030-2035.

The ones signed in 2016 were part of the CPEC and will take another generation of Pakistanis to finally see them retired but very likely we will have signed more IPPs by then
 
It won’t…

It will instead put more pressure on the government. The reason is we are under the contract by IPPs that whether we need the power generation or not, the government is bound to buy the units from the IPPs.

Less demand means more bill for the government to pay for unused electricity unless the government is able to grow the electricity demand and consume these extra units
Wrong.
There is no way that a growing population can't consume that production.

Mind you, the agreements are done in past for a fixed amount of electricity generated while population and it's needs are growing by the year.

Moreover, home based solar power will reduce load on the system reducing load shedding.

Note: Home based solar power generation (at individual levels) isn't as profitable as people assume
 
Wrong.
There is no way that a growing population can't consume that production.

Mind you, the agreements are done in past for a fixed amount of electricity generated while population and it's needs are growing by the year.

Moreover, home based solar power will reduce load on the system reducing load shedding.

Note: Home based solar power generation (at individual levels) isn't as profitable as people assume
1) We have installed capacity of about 47,000mw and the average consumption is about half of that. Although the demand rises from time to time but our grid system isn’t capable enough to do load balancing as it would trip

2) Imagine 8000mw of solar panels added in just 1 year by the household. No idea how many thousands of MW of solar panels are already installed

2) When big contracts are signed for example someone is investing 100 billion rupees, it wants to make sure that it doesn’t make losses. So the government will incite them with the offers of we will buy 70% of the installed capacity at all times even if you don’t produce it.

But now we have too much electricity, at some places we have a shortage of electricity but a poor national grid system. So we can’t balance it out everywhere
 
Pakistan has various layers of issues in power generation. While the power plants is one issue, the IPPs is a bigger issue and probably the national grid is even a bigger issue.

We have a national grid but it’s not very reliable and mostly old grid which often trips if the load is approaching 100% of the capacity. We need to invest 10 billion usd for grids only before any chance of having load balancing ideas
The power crunch is not exclusively a power plant problem; the impact of power resource management is very significant.

We know:
Power generation area. Solar power and hydropower are severely limited by weather and region, thermal power generation causes great environmental pollution, and nuclear power generation has huge safety factors. Each type of power generation has corresponding limitations.
Electricity Consumption Area. The difference in electricity consumption between different regions and different times is very large.

In China. The eastern region is economically developed and consumes huge amounts of electricity; the western region is economically backward and consumes very little electricity. However, the western region has a lot of resources needed for clean energy (solar power and hydropower). That's why China has the super project “West-East Power Transmission” to deploy a large amount of electricity from the west to the eastern developed regions.
In the western region of Sichuan, there are a lot of high-quality water conservancy power generation resources. In addition to some large state-owned hydropower plants, there are also numerous small and medium-sized private hydropower plants. In the early days, these private hydropower plants were not connected to the national grid, and their surplus power was directly wasted. Later, when Bitcoin became popular, it became the world's largest Bitcoin factory. After the Chinese government banned virtual currencies, all of these private hydroelectric plants were connected to the national grid.

In real-world gaming, it is easy for ongoing conflicts to occur between opposing sectors of the same power. Such conflicts can cause great disasters at some point.
If the power plant and the grid operator are organizations of equal strength, the tug-of-war between them can lead to power tension. If government departments do not deal with the situation in a balanced manner, or even participate in the tug-of-war, the situation will continue to deteriorate.
China had a similar situation in the early years. Back then, power grid operations were still set up by individual localities on their own, and there was no consolidated management. But power plants such as the Three Gorges Group and the Gezhouba Group were mega-corporations, and they were not at all subject to the management of local grid operators. It was not until the State Grid was merged and established that it was more massive than any of the power plants, which gave it a voice. No power plant had the ability to threaten the national grid.

Pakistan's power situation is similar to that of China a few decades ago. Pakistan needs a strong grid authority. Whether it is Pakistan's own grid company or the introduction of a Chinese “State Grid” company, the Government will need to do the work.

Of course, for balancing factors and national security, the State Grid Corporation is the largest grid management company in China, but it is not the only grid management company.
China Southern Power Grid Company is another grid management company. It is much smaller than State Grid. It mainly manages the regions of Guangdong, Guangxi, Yunnan, Guizhou and Hainan, and it also provides electricity to Hong Kong and Macau.
 
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It is not clear to me why Pakistan does not bring in “National Grid” to help build and manage the power system.
State Grid is the world's largest utility company, ranked No. 3 on the Fortune 500 list for 2024. It operates and manages electricity businesses in China and many other countries around the world.

In a home solar power system, the energy storage system can take up a very large portion of the cost. China's solution is a two-way power supply with mutual sales.

When the solar panels produce more power than your current usage, the system feeds the excess power into the public grid and the utility company buys that surplus power. When your current usage exceeds the amount of electricity generated by the solar panels, the system automatically uses electricity from the public grid to supplement it, and you purchase the electricity from the power company. The system automatically consolidates the final difference to account for the cost.

This approach does not require the purchase of a larger energy storage system (just a very small emergency storage system). This will result in very large savings. At the same time, it maximizes the optimal distribution of power. However, it requires an advanced power management system from the power company.

Some families in China who are in a position to do so are using this method. They don't have to pay for electricity, and they often get the settled profit from the power company. However, there are very few places in China where home solar systems can be built.

Corruption, nepotism, bribery, unprofessionallism is the name for our leadership. Alot is possible if only qualified professional people are in charge.


@Michael The issue in Pakistan is Corruption. Electricity is not provided as Service to People but It is a revenue generation thing for government. We have production capacity more than our need yet we see long hours of electricity load shedding. Many of the IPPs are from people who are politician and are in govt. so their company don't product any or very little electricity but got full amount paid in for capacity charges. Pakistan total electricity generation stood at 92,091 GWh against a demand of 68,559 GWh for the same period The electricity transmission network, currently, has the capacity to handle around 53,000 MVA. Cost of Electricity is highest in world for consumers and Solar is much more cheaper now and whole cost is recovered in around 2 years, infact earlier so who ever have money to shift on Solar is opting for it. Plus there are some conspiracy theories like Middle East wants Pakistan not to convert their electricity generation to renewable because of their oil which is currently used in these plants and despite having all favourable condition for renewable like Hydro, solar, wind, sea, geothermal we won't look for it and latest conspiracy theory is It's actually China who forced govt. to shift for Solar because Pakistan is a consumer of their solar system plus it will save Pakistan lot of foreign exchange which Pakistan use to import Oil and thus Pakistan financials will be improved. (Honestly Sometimes China is more Pro-Pakistan then Pakistani Politician.). So issue is not as simple as it appears.
 
Solar panel prices in Pakistan have plummeted to new record lows, with prices dropping to Rs.28 per watt in Karachi’s market, ARY News reported on Saturday.

This massive decrease follows a steady decrease from Rs.30 to Rs.32 per watt last month.

Earlier this year, prices hovered around Rs.39 to Rs.40 per watt in April, marking a significant drop compared to Rs.80 per watt two years ago.

The decline in prices is attributed to increased supply and growing interest in solar energy.

Federal Minister for Energy Owais Laghari noted that 8,000 MW of solar panels were imported into Pakistan in just one year.

Additionally, plans to establish solar inverter plants locally aim to reduce foreign exchange costs and further promote solar energy in the country.

So who will buy nawaz sharif’s over priced IPP energy ?
 
@Michael The issue in Pakistan is Corruption. Electricity is not provided as Service to People but It is a revenue generation thing for government. We have production capacity more than our need yet we see long hours of electricity load shedding. Many of the IPPs are from people who are politician and are in govt. so their company don't product any or very little electricity but got full amount paid in for capacity charges. Pakistan total electricity generation stood at 92,091 GWh against a demand of 68,559 GWh for the same period The electricity transmission network, currently, has the capacity to handle around 53,000 MVA. Cost of Electricity is highest in world for consumers and Solar is much more cheaper now and whole cost is recovered in around 2 years, infact earlier so who ever have money to shift on Solar is opting for it. Plus there are some conspiracy theories like Middle East wants Pakistan not to convert their electricity generation to renewable because of their oil which is currently used in these plants and despite having all favourable condition for renewable like Hydro, solar, wind, sea, geothermal we won't look for it and latest conspiracy theory is It's actually China who forced govt. to shift for Solar because Pakistan is a consumer of their solar system plus it will save Pakistan lot of foreign exchange which Pakistan use to import Oil and thus Pakistan financials will be improved. (Honestly Sometimes China is more Pro-Pakistan then Pakistani Politician.). So issue is not as simple as it appears.
I know what you're trying to say. So, I think Pakistan needs a very strong power management company. He must be strong enough to deter some government officials.

Corruption is a problem in any country. The problem of corruption of officials behind Pakistan's power plants can only be checked by a more powerful institution.

China's “State Grid” is one such company and no power plant would dare to confront it. China's Three Gorges Group, which has a very deep political background (China's Premier) and strong economic power, still doesn't dare to confront the State Grid. It is this constraint that has allowed the development of China's power system.

I am not sure if you understand.
 
Here you are a typical Pakistani cheer leading your economys demise.

Your ipp's have to be paid money for capacity regardless of whether they produce power or not. Arguably the electricity should be used from the ipp so you get something against what the country pays.

And even if as a country Pakistan decides to go solar, you should be making your own panels instead of doing zero tax free trade with China that ensures you will never have any industry. This is China flooding your market (and trying everywhere else as well) to stabilize its own economy and export its over capacity.


You people deserve what's happening to your country you're just so daft. Darwin predicted this.

Thats not how it works in Pakistan.

Pakistan biggest problem is electricity theft in KP, Balochistan and interior Sindh. This govt is only one in last 40 years that is trying to do something about it.

Solar panels doesn't mean end of dependendence on traditional grid. But demand will be much lower and govt will not have to sign more stupid expensive IPP ridden with corruption and ultimately paid by public.

But Pakistan does need to invest in local manufacturing of solar panels, no doubt about it.

Every manufacturing unit in Pakistan is trying to go solar to compete with India and Bangladesh. Other option is paying $0.25 per unit and that to unreliable grid.

Plus many people don't have space for solar panels so they will continue to depend on grid.
 
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Solar panel prices in Pakistan have plummeted to new record lows, with prices dropping to Rs.28 per watt in Karachi’s market, ARY News reported on Saturday.

This massive decrease follows a steady decrease from Rs.30 to Rs.32 per watt last month.

Earlier this year, prices hovered around Rs.39 to Rs.40 per watt in April, marking a significant drop compared to Rs.80 per watt two years ago.

The decline in prices is attributed to increased supply and growing interest in solar energy.

Federal Minister for Energy Owais Laghari noted that 8,000 MW of solar panels were imported into Pakistan in just one year.

Additionally, plans to establish solar inverter plants locally aim to reduce foreign exchange costs and further promote solar energy in the country.
It's a good news..

I personally feel unfair with people living in society. They don't have to go for solar panel since no installation option.
 
Wrong.
There is no way that a growing population can't consume that production.

Mind you, the agreements are done in past for a fixed amount of electricity generated while population and it's needs are growing by the year.

Moreover, home based solar power will reduce load on the system reducing load shedding.

Note: Home based solar power generation (at individual levels) isn't as profitable as people assume

Maybe before but now because 5KW solar panels cost $500 in Pakistan. Must people need 2-3KW as majority will not have ACs. In Pakistan one can recover solar investment in 2 years max.
 
Maybe before but now because 5KW solar panels cost $500 in Pakistan. Must people need 2-3KW as majority will not have ACs. In Pakistan one can recover solar investment in 2 years max.
What is the approximate cost of a complete 5KW home solar power system in Pakistan? It includes solar panels, energy storage system, wiring and control system, installation cost.

Price in China: 40,000-60,000 RMB. You convert the currency yourself.
All surplus electricity from home solar is recovered by the National Grid. The price of electricity recovery varies a little from place to place, but the difference with local electricity prices is very small.
 
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I know what you're trying to say. So, I think Pakistan needs a very strong power management company. He must be strong enough to deter some government officials.

Corruption is a problem in any country. The problem of corruption of officials behind Pakistan's power plants can only be checked by a more powerful institution.

China's “State Grid” is one such company and no power plant would dare to confront it. China's Three Gorges Group, which has a very deep political background (China's Premier) and strong economic power, still doesn't dare to confront the State Grid. It is this constraint that has allowed the development of China's power system.

I am not sure if you understand.

Pakistan most corrupt person is in President Post and most corrupt group/family is in PM and CM post so what you expect. Whole establishment is bunch of corrupt people. So not much hope their. Only hope we have is some external power forced these corrupt people to do some good like china or IMF or US. like in case of Solar, Its Chinese which is the driving force behind this solar change. Trust me Pakistan is one of the richest country in the world, it's just corruption and bad management which is stopping Pakistan to develop and behind all these miseries.


What is the approximate cost of a complete 5KW home solar power system in Pakistan? It includes solar panels, energy storage system, wiring and control system, installation cost.

Price in China: 40,000-60,000 RMB. You convert the currency yourself.
All surplus electricity from home solar is recovered by the National Grid. The price of electricity recovery varies a little from place to place, but the difference with local electricity prices is very small.

Cost of 5KW home solar system is around 500000-100000 rupees in Pakistan depends on requirement and type. If you convert it on USD it will be around 1800-3600 USD. (on-grid system which we call net-metering saves you cost of major battery backup so bigger range mentioned is because of this).

40000-60000 Yaun is around 5700 - 8550 USD

So it's seems lot cheaper in Pakistan vs China.
 
What is the approximate cost of a complete 5KW home solar power system in Pakistan? It includes solar panels, energy storage system, wiring and control system, installation cost.

Price in China: 40,000-60,000 RMB. You convert the currency yourself.
All surplus electricity from home solar is recovered by the National Grid. The price of electricity recovery varies a little from place to place, but the difference with local electricity prices is very small.

5KW solar panel system with installation and inverter included cost like $900. If you want to complete it with batteries then maybe $1300-1500 depending on capacity.

In Pakistan national grid now charge $0.25 per unit or kwh so must people are trying to shift to solar.
 

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