KARACHI: Excessive panel imports amid falling prices in China have encouraged aggressive solar power system installations by consumers across the country to reduce their inflated power bills.

Solar panel dealers are busier than last year, while dealers of power generators and Uninterrupted Power Supply (UPS) have still been waiting for the buyers to turn up.

A few years back, UPS used to rule the market when battery prices were also lower. Now at Regal Chowk and in other areas, dealers said consumers are hardly demanding UPS as bustling sales of solar panels have ruined UPS demand.

The corporate sector, industries, educational institutions, and petrol pumps are also converting to solar systems to save overhead costs.

A solar panel dealer at Regal Chowk said that a 5kW system, including battery, inverter and installation charges, now costs Rs 700,000-750,000 against over Rs1.1 million last year. A 3kW system is now available at Rs400,000-450,000 against Rs500,000 the previous year.

However, in the last one or two days, some dealers have started charging Rs5-8 per watt more for solar panels.

Karachi Electronic Dealers Association (KEDA) Senior Vice-President Saleem Memon said some dealers had cut the rate to Rs36 per watt a few days back from Rs40 but again reverted to the old rate on surging demand.

He said the solar panel price is now Rs40 per watt, compared to Rs125-130 per watt last year. As a result, a 10kW solar system now costs Rs1m, compared to around Rs2m the previous year, while a 15kW system is available at Rs1.5m compared to Rs3m.

Costly inverters and batteries

With no price drop in the inverter, he said a 3kVA inverter is available at Rs50,000-55,000 while 5kVA inverter carries a price of Rs300,000.

“In 2023, the imports of solar panels totalled 4,000 gigawatts (GW), but this figure has already been surpassed by a big margin in just three months,” he said, adding that consumers are benefiting from cheaper panels but are still waiting for a cut in battery and inverter prices as this would greatly help people install solar power system to overcome high electricity bills.

“Solar panels are the only way to get rid of unbearable K-Electric bills,” Saleem said, urging the government to provide subsidies to the consumers who install solar panels at their residences.

He said the market is facing a glut-like situation in solar panels as price falls in China and rupee stability in the last six to seven months have also encouraged investors to make bulk imports, forcing many solar panel dealers with higher-priced stocks to sell panels under cost.

“After allowing opening letters of credit (LCc), traders are still opening fresh LCs for more solar panel imports,” he said.

“I see a bright demand prospect for solar panels in the future given the rising cost of grid electricity being provided by power distribution companies,” he said.

Offering a different view, Pakistan Solar Association Senior Vice-Chair­man Mohammad Zakir Ali said that in 2022, there was a demand for 1.7GW, which rose to 4GW in 2023. In the first five months of 2024, he claimed that imports had swelled to 8GW.

He said the decline in the price of solar panels to Rs40 from Rs130 per watt has brought down the overall price of solar panel systems by at least 50pc compared to June 2023, but the prices of inverters and batteries are unchanged.

“The current price of solar panels is almost on a par with solar panel prices in China, which have also dropped by 20pc in the last year, thus encouraging traders to continue opening letters of credit (LCs) for future imports,” he claimed.

“Our sales have doubled from last year,” Zakir said, adding that demand is going higher than supply as people are perturbed over skyrocketing power bills.

Published in Dawn, May 19th, 2024