Did the world go dark when you saw your last electricity bill? If so, you are not alone.

Heat demands air conditioning, electricity providers demand handfuls of cash, the International Monetary Fund demands higher tariffs, and Russian President Vladimir Putin demands the annihilation of Ukraine.

But it’s impossible to explain the concoction of reasons to a toddler who just wants to sleep with a teddy bear while the air conditioning is running. Harnessing solar energy is a happy solution for those who can afford it.

Here are some factors to consider before opting for a solar solution:

Quality

One can take a look at Regal Chowk in Karachi and choose a solution that costs a few hundred thousand rupees compared to a million+ option a branded supplier might offer, but it has its share of disadvantages.

Low-cost solution providers tend to import a container of solar accessories and hire an ordinary electrician to install it. Given its technical nature, the lack of support can create problems.

Poor quality solar panels can cause short circuits and sparks. In the best case, the system will stop and you will run after the supplier who may or may not be able to provide after-sales service.

“[Consider] a Huawei solar solution has been installed in your home but takes effect a year or two after purchase,” says Musa Khan Durrani, Business and Planning Manager at SkyElectric. “You call the supplier, but they may have changed their business to real estate and suggest you contact Huawei directly,” he says.

“In the worst case, sparks from substandard panels can start a fire,” warns Mujtaba Raza, CEO of Solar Citizen.

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Registration

Reputable solar suppliers are registered with the Alternative Energy Development Council (AEDB). Although the AEDB does not in any way control or guarantee the quality of the panels or the service, its registration allows the supplier to implement the net metering system, where all the cost savings reside.

Compare that to buying a car: given the price and longevity of the purchase, you’ll opt for a trusted name like Toyota or Honda over an unknown entity, budget permitting. Solar panels typically have a 10-15 year warranty and a 25 year lifespan, so they can light up your little one’s wedding functions.

Net billing

The cost savings lie in net metering, which is a billing mechanism that credits solar power system owners for the electricity they add to the grid.

A business registered with the AEDB can set up the net metering process on behalf of its client. According to its website, KE only processes inquiries received from suppliers listed by the AEDB, although this may not apply to all electricity supply companies.

For example, you have a bungalow in Defense, Karachi, with a photovoltaic system on your terrace. It can generate more electricity than you need during the day, allowing you to sell the excess to K-Electric.

Based on your annual electricity consumption figures, some companies can offer you a package that will reduce your electricity bill to zero. If your household consumes an average of Rs.1,000 of electricity at night, you can sell Rs.1,000 worth of credits while the sun is shining, which you can use after sunset.

So during the day you would use your own solar generated power and KE would buy the excess. Without batteries, at night you would revert to using KE electricity, which means nighttime load shedding requires the use of the good old ever more expensive diesel-powered generator.

To completely avoid power cuts, you will need batteries to store the electricity generated while the sun is shining. There are different types of batteries, from tubular batteries that you are familiar with from the UPS system, to more expensive specific solar solutions that can cost an extra 250,000 rupees per kilowatt for a home solution from a reputable company.

Solar solutions are less feasible for apartments because there is not enough open space directly exposed to the sun. Although it could be argued that common areas such as parking can theoretically be solarized, which may not take a full load of all apartments, but may subsidize electricity bills.

Initial cost and maintenance

Ali Karimjee, a DHA resident in Karachi, installed an 11kW solar system in 2018 which cost him about Rs 1.1 million. “With the credits I earn from solar power, I don’t pay electricity bills in the cooler months of November to March,” he says.

At previously lower rates, at the height of summer, his bill was no more than Rs 7,000-8,000 a month, despite three air conditioners, two refrigerators and an assortment of appliances running on electricity. As electricity rates rise, he expects greater savings.

All of this is great, but the cost of solar energy is high and increases with the exchange rate. “Typically, a normal household with three to four air conditioners and the usual appliances would require a 10kW solution which now costs around Rs 1.3 million without batteries,” says Raza.

However, it can go up to Rs2m, says Durrani. A 10kW system including the batteries can cost between Rs 1.8 and 3 million, but while the panels can last for decades, the batteries can have a lifetime of only a few years.

Being completely independent of the power grid is not the wisest option. Batteries are expensive and need to be replaced frequently, so that could be over Rs 300,000 extra every two years. If the purpose of the photovoltaic installation is to reduce the electricity bill, a hybrid solution represents the most savings. If the goal is to snub KE, then on your own, go for it.

A small additional cost is related to the maintenance which consists in frequently washing the solar panels. “A man comes to service my solar panels every week,” explains Karimjee. “I pay him 3,500 rupees a month.”

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Funding

How can we afford an Rs1m-plus solar system? The State Bank provides financing at a fixed rate of 6%, which is not linked to the interbank offered rate in Karachi. Generally, the term of the loan is three to five years with a down payment of 20% equity.

Depending on the electricity consumption and the amount spent on the solar solution, what you owe to the bank may be less at the end of the month compared to your bill. For example, if you spend 25,000 rupees per month to repay the bank while your electricity consumption is 40,000 rupees, you will save money even with a loan.

Keep in mind that even if electricity prices increase, the amount of the payments remains constant, so your savings will increase in proportion to the increase in energy prices.

However, banks take months to process solar loans, complain industry insiders. Given the technology involved, panels and miscellaneous parts are imported and the rapid depreciation of the rupee drives up prices. A few months later, when the loan is finally processed, the cost of the package may also have increased.