On the Competitiveness of Grid-Tied Residential Photovoltaic Generation Systems in Pakistan : Panacea or Paradox?

Pakistan is experiencing a slow uptake of grid-tied residential PV generation Systems (GTRPVGS); despite of steep fall in PV module prices, higher solar irradiation and enactment of Net-metering by the Government. This slow uptake is attributed to the lack of awareness of four major stakeholders, namely the house hold, utility, financier and the policy-maker. This paper presents a coherent framework that addresses the concerns of the stakeholders using four country-specific parameters; the local solar irradiation, PV system costs, borrowing and discount rates, and electricity tariffs; to compute NPV, IRR, payback period and levelized cost of electricity (LCOE). Assuming net metering, we model the economic payoffs on self-consumption and sale of PV electricity at varying net-metering rates, system sizes, load-to-generation profiles; borrowing and discount rates. Findings suggest economic competitiveness of PV electricity, with an IRR and payback averaging around 28% and 5 years respectively. Moreover, the LCOE is also found to be significantly lower than the retail rates. The findings inform the household and financier on the economic yield; utility on efficient tariff setting; and government on sustainable policy design. Finally, we argue that GTRPVGS bears huge potential for Pakistan; suffering from energy deficit, unsustainable cost, transmission losses and environmental hazards