By Salman Tariq
Saving Power Costs through Grid-Tied Solar
Households and businesses spend vast sums on monthly electricity bills. Most people accept the rising power costs as a necessary evil without trying to understand their own consumption habits. Only few are progressive enough to think about cutting this fat by embracing clean energy resources. The technological revolution in the last 5-10 years has drastically cut solar power costs close to $1 per watt and increased uptake globally. There is an extremely attractive economic proposition for consumers in Pakistan as well, primarily for three reasons:
1) Lower costs courtesy tax exemptions, proximity to China and low installation costs;
2) High (and continuously rising) grid tariffs which gives immense saving opportunities and lower paybacks for solar systems;
3) Implementation of net-metering law which allows consumers to sell excess solar power back to the grid.
However there is still a lot of apprehension and misconception in the consumer market. Common questions raised include whether solar power can support heavy equipment like air-conditioners or machinery; or questions about not having enough space to cover the entire load. Additionally with an improved grid supply, especially in Karachi, consumers think they don’t need solar anymore.
When people think about solar they think complete off-grid & batteries, which obviously translates to a significant perceived up-front expense as well as a physical cap to how much power one can draw every day from the battery bank. This is where the financial attractiveness of grid-tied solar comes in.
Grid-tied solar is simply a solar system which is installed at a location where a consumer already has a grid connection (electricity connection with the power utility like K-Electric/LESCO etc.). Smart inverter technology regulates the supply from solar and the grid simultaneously. Solar becomes the primary source of power during the day while the grid acts as the backup. As consumption increases more than the availability from the solar power system, power from the grid will be consumed. This means that Grid-tied solar systems can be installed to cover even partial load depending on how much space is available.
Consider the graph above for a system deployed at a school. Between 7am & 9am the grid provides electricity to the school as power consumption is high. However as the day progresses, the solar production gradually increases and substitutes the grid as the primary source of generation for the rest of the day – achieving 80% of self-sufficiency for the day in this case. As consumption varies during the day and there is sudden surge of power consumption, the grid provides backup and stabilizes supply-demand.
As long as consumers can substitute the more expensive units of power from the grid with cheaper solar units, the basket rate of power will fall. Most residential consumers are paying close to PKR 18-20/unit while commercial entities pay somewhere between PKR 22-27/unit including taxes. A unit of rooftop solar on the other hand can cost between PKR 6-11/unit (depending on the size) while the system has a life of over 20 years. Every unit of grid electricity substituted by a solar unit saves significant amount of money, paying back the entire system cost in 3-4 years.
The net metering policy introduced by the government further adds to the attractiveness of solar. Net Metering simply allows a consumer with solar to export and sell units to the grid. Why would that be the case? Well imagine a household that has 10KW installed but during the day-time (when solar production is at peak) no one is at home. If consumption is 4KW and the Solar is producing 7KW, the extra 3KW can be exported to the grid which will be “bought” by the utility. Imagine the savings for a school which ends at 1PM and is closed on weekends and school holidays; or industries that don’t operate on Sundays. To visualize how this works consider the graph below:
Between 7am and 10am the solar production is not enough to cover consumption. Hence the deficit is then drawn from the electricity grid. However between 10am and 3pm, the solar production is more than consumption (the green area) and all the units are sent back to the grid. Maybe ACs were switched off during this particular day or there wasn’t much activity. However these extra units sent to the grid will be used to cover the days when power is drawn from the grid just like the scenario shown between 7am and 10am in the graph above. Hence Solar is a great long term investment which will deliver savings immediately!