Industrial users of electricity today are open to solar PV solutions to reduce their day to day to expenses and their impact on climate, but project financing is one of the bigger challenges that yet needs to be addressed.
Forms of solar project financing such as third party Power Purchase Agreements (PPA) and Solar Leases have gained massive approval in United States and other developed nations. Under a PPA, an installer builds a solar system at the client’s property at zero-upfront cost. The system offsets the customer’s electric utility bill, and the developer sells the power generated to the client at an agreed upon tariff rate that is typically lower than rates of the local utility at no additional responsibility; whereas solar leases allow the user to lease the plant at predetermined rates with zero or low initial costs. Both of these models enable the customer to support solar power and avoid costs arising from operations and maintenance that are generally transferred to the developer.
It is needed that banks and other local and international lending institutions provide adequate support to these project developers to offer better financing options to the industrial user.
“With rapidly developing technology, and falling panel costs, it is essential that the Government provides financial provisions to encourage solar installations for businesses and households alike. We are currently in talks with a couple of banks that have shown interest in financing solar power projects. Payments plans for borrowers, connection to grid in case of net-metering and other technicalities should be addressed on priority to meet the country’s energy needs,” said Inam ur Rahman, CEO, Reon Energy Limited.
Ease in financing of solar power projects shall encourage robust investments in solar energy sector. With sun energy present in abundance in Pakistan, solar energy technologies shall help save on electricity bills for both businesses and households.