Industrial users of electricity
today are open to 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.
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