Government Imposes 32.5% Tax on Solar

According to Finance Act 2014, the federal government has amended SRO 575 2006-07 and imposed a tax of 32.5% on import of Solar Panels. It must be noted that Solar Panels were placed in a special category with no tax since 2006. This was done to encourage the adoption of this Alternate Energy in the country. The government instead of taking steps to promote Solar Energy has taken the worst possible decision, at a time when the country is facing an acute energy crisis. The only possible explanation for this action is that the government intends to encourage local production of Solar Panels, which at the moment is minimal.

What is troubling is that the Alternate Energy Development Board (AEDB) which is tasked with increasing the Alternate Energy contribution in the country to about 5% by 2030 was not even consulted.

Solar Panel

The breakdown of the imposed tax is as follows.

General Sales Tax 17%

Import Duty 5%

Commercial Importer 3%

Income Tax on the Import 5.5%

The hardest hit are the importers who had imported Solar Panels in bulk and now have to pay taxes amounting to millions of rupees (5-6 million per container). According to sources, there are about 60 to 70 containers at the port which are waiting for clearance by customs. Also suffering are Solar solution providers who do not have enough equipment now to fulfill their commitments. It must be noted that energy demand reaches its peak in the summer months and this is the time when Solar businesses make their profits. Also to be hit is the agriculture sector where Solar Pumps have become quite popular in recent times.

The government has recently shown considerable interest in Solar technology with the launch of Quaid-e-Azam Solar Park in Bahawalpur. Previously, the Gillani government had also taken some steps to promote Alternate Energies in the country, such as starting Wind Energy projects in Jhimpir. It is hoped that better sense will prevail and the government will revisit the Fiance Act 2014 which has created this mess!

Note: Since this article was published on July 29, 2014 there has been another article that totally refutes the imposition of any additional taxes on solar equipment. According to this article titled Demystifying the Tax on Solar Panels "if an importer verified the import (through the Engineering Development Board) as a unique product not manufactured or available in Pakistan, the importer would not have to pay custom tax". The news item about the imposition of tax may have been untrue but it did have some effect as the 60-70 containers stuck at Karachi were immediately released.

Alternate Energy Development Board (AEDB)

Alternate Energy Development Board is a Government of Pakistan controlled institution that is tasked with increasing the alternate energy contribution of the country to about 5% by 2030. According to the AEDB Act of 25th May 2010 following are the functions of the AEDB Board.

(a) To develop national strategy, policies and plans for utilization of alternate and renewable energy resources to achieve the targets approved by the Federal Government in consultation with the Board.

(b) To act as a forum for evaluating, monitoring and certification of alternate or renewable energy projects and products.

(c) To act as a coordinating agency for commercial application of alternate or renewable energy.

(d) To facilitate energy generation through alternate or renewable energy resources by:

(i) Acting as a one window facility for establishing, promoting and facilitating alternate or renewable energy projects based on wind, solar, micro-hydel, fuel cells, tidal, ocean, biogas, biomass etc.

(ii) Setting up alternate and renewable energy projects on it's own or through joint ventures or partnership with public or private entities in order to create awareness and motivation of the need to take such initiatives for the benefit of general public as well as by evaluating concept notes and technologies from technical and financial perspective.

(iii) Conducting feasibility studies and surveys to identify opportunities for power generation and other applications through alternate and renewable energy resources.

(iv) Undertaking technical, financial and economic evaluation of the alternate and renewable energy proposals as well as providing assistance in filing of required licensing applications and tariff petitions to NEPRA established under the Regulation of Generation Transmission and Distribution of Electric Power Act, 1997.

(v) Interacting and coordinating with national and international agencies for promotion and development of alternate energy.

(vi) Assisting the development and implementation of plans with concerned authorities and provincial governments and special areas for off grid electrification of rural areas.

(vii) Making legislative proposals to enforce use and installation of equipment utilizing renewable energy.

Pakistan Council of Renewable Energy Technologies (PCRET)

Pakistan did realize the potential of Alternate Energies quite early and National Institute of Silicon Technology (NIST) was formed in 1981 to conduct research in the area of Solar Energy. Later on Pakistan Council for Appropriate Technology (PCAT) was formed in 1985. These two organizations were merged together under the umbrella of Pakistan Council of Renewable Energy Technologies (PCRET) in 2001. The government of Pakistan also formed the Alternate Energy Development Board (AEDB) in 2003. Although these organizations have been working in the Alternate Energy sector for more than 30 years but there are not many achievements to be proud of. Some pilot projects have been initiated by PCRET and AEDB in remote parts of the country but there is no holistic approach to overcome the energy crisis besetting the country (one interesting initiative that has been taken by the Government of Pakistan in recent times is the Quaid-e-Azam Solar Park in Bahawalpur).

One interesting initiative undertaken by PCRET is the indigenous development of 3rd Generation Solar Cells using Nanotechnology. However, the Solar Cells developed using this technique have very low efficiency (around 1%) as compared to international standards (around 10%). Nonetheless, this is an important step towards indigenous development and it is hoped that the efficiency of these Solar Cells can be improved with time so that they are of some practical use. Some of the products developed by PCRET in the area of Solar Thermal are Solar Desalination Plant, Solar Water Heater, Solar Cooker and Dehydrator.

As per PCRET website the total installed capacities of various Alternate Energy technologies in Pakistan are:

1. Installed 538 Microhydel Power Plants  (5-50 KW capacity) with total capacity of 7.8 MW, 70,000 houses electrified.

2. Installed 155 small wind turbines (0.5 KW to 10 KW) with total capacity of 161 KW in Sindh and Balochistan, electrifying 1560 houses and 9-coast guard check posts.

3. Installed 300 Solar PV systems with total capacity of 100 KW electrifying 500 houses, mosques, schools and street lights.

4. Installed 4000 Biogas Plants (size 3&5M3/day, producing 18000 M3/day).

5. Developed 6-models of efficient smokeless cook stoves for cooking and space boiler rental.

6. 100,000 mud stoves have been built in rural houses; saving 36500 tons of fuel wood per year.

7. Installed 21 solar dryers with total capacity of processing 5230 Kg of fruit per day.

Cave Houses Around the World

It is well known that cave houses provide a noise free and weather proof environment (cool during the summer and warm during the winter). These structures also shield one from man-made Electromagnetic radiation that is present everywhere. Furthermore, since most of the materials used in construction are local, the environmental impact is minimal. Shown below are some cave houses from around the world. Some are simple dwellings with the most basic necessities, while other have running water, electricity and wireless access, so are great for renting, of course you can also find other options such as flats to rent canary wharf if you're looking for your own place to rent. If you don’t want to deal with months of stress leading up to your relocation, having moving experts on your side is well worth the expense. While the idea of a DIY move might seem tempting and more personal, the advantages of hiring professional moving companies like Three Movers cannot be understated. If you want to release your stress, try visiting the bcfun website for some enjoyment.

Cave houses have been utilized for centuries across various cultures and regions, offering inhabitants a unique blend of natural insulation, protection, and sustainability. Let's delve further into their characteristics and advantages:

Natural Insulation: The thermal mass of the surrounding earth helps regulate temperatures inside cave houses, keeping them cool in summer and warm in winter. This natural insulation reduces the need for artificial heating and cooling systems, resulting in energy savings and lower utility bills.

Noise Reduction: The dense earth walls of cave houses act as effective barriers against external noise, providing residents with a serene and peaceful living environment. This feature is particularly appealing for those seeking refuge from urban noise pollution.

Protection from Electromagnetic Radiation: The thick layers of earth effectively shield occupants from man-made electromagnetic radiation, which is emitted by various electronic devices and infrastructure. This protection can contribute to improved health and well-being for residents, as prolonged exposure to electromagnetic fields has been associated with certain health risks.

Cave Hotel

Cave Hotel

Cave House

Cave House

Cave House

Cave House

Cave House in Baluchistan

Cave House in Baluchistan

Cave House in Utah

Cave House in Utah

Bhatar Construction in Northern Pakistan

Pakistan was hit by a devastating earthquake in October 2005. Soon afterward the government of Pakistan formed the Earthquake Reconstruction and Rehabilitation Authority, commonly known as ERRA. ERRA created 11 training centers for the reconstruction of private homes destroyed in the earthquake. One of the techniques promoted in this reconstruction effort was the so-called "Bhatar" method of construction.

Bhatar consists of reinforced stone masonry where parallel horizontal timber beams are inserted into the stone masonry at regular intervals to ensure the coherence of the structure. This is a much more economical option than typical construction which requires transport of cement, bricks, and steel to remote mountainous regions. The houses constructed in this fashion are not only earthquake resilient but also energy efficient since the stone masonry acts as an insulator to heat and cold.

Bhatar Construction

Bhatar Construction

Bhatar House

Bhatar House

Earthquake Resistant and Energy Efficient Homes - PAKSBAB

After the devastating earthquake of 2005 which destroyed nearly half a million rural homes in Pakistan, there was an urgent need to build earthquake-resistant homes. Thus came into being PAKSBAB which is the short form of Pakistan Straw Bale and Appropriate Buildings. So far PAKSBAB, from its limited resources, has build 27 homes in northern parts of Pakistan. These homes have been built using indigenous resources and by training the local people in the construction of straw bale houses with wooden exteriors, although the problem with this is the mold, but is when services like Mold Remediation Toms River can solve all these issues. PAKSBAB has also partnered with scaffolding companies, Including highway road sites, such as https://www.whiteliningcontractors.co.uk/warehouses/walkway.  Moreover, PAKSBAB has partnered with industrial coating contractors to ensure the durability and longevity of the constructed homes.

A typical straw bale house has an area of 576 square feet and costs $3000 on average. This turns out to be $5.2/square foot which is less than half the cost of brick-and-mortar houses. A typical home comprises of two rooms, a verandah, and a kitchen and requires around 1200 hours of labor. So 6 people working for 8 hours daily can construct a straw bale house in 25 days, while if you're building a house and you want to add a luxury staircase you can get a service of staircase builders to help you with this. Additionally, PAKSBAB recognizes the importance of versatile structures, such as indoor riding arena, to further meet the diverse needs of the community and enhance the overall impact of its efforts. For fire safety, it's essential to engage intumescent painting contractors to ensure adequate protection against potential hazards.

The main advantages of straw bale houses over brick and mortar houses are highlighted below.

1. Energy efficiency, since straw is a good insulator

2. Non toxic products are used (light straw, clay and wood)

3. Cheap materials are used resulting in a cost that is half that of a regular house

4. Resistant to earthquakes

Energy Efficient House

Tightly packed walls and a gravel weighted foundation creates better weather-proofing

 

Energy Efficient House

Twice as energy efficient as a conventional house, straw bale makes for environmentally friendly earthquake-proof homes

Energy Efficient House

Clay-plaster reinforced, a fabricated straw bale house costs half the expenses of modern building for every square foot

Construction of these energy efficient and earthquake resilient homes are built using Small Scale Piling Equipment and locally manufactured compression moulds. Mini piling is more suitable than traditional methods when it comes to areas with poor ground conditions where soil excavation and removal could otherwise cause issues, since they can still create a stable, even framework where traditional piling is no longer viable. Furthermore the local industry is being encouraged to get GPR services for accurate mapping before starting these projects. Additional appropriate building methods that PAKSBAB is promoting include passive solar, rainwater catchment, solar lamps, high-efficiency cooking and heating. If you need to strengthen your home's foundation, think about exploring new solutions and hiring foundation repair St. Catharines.

Solar Car Build by Islamabad Entrepreneur

An entrepreneur in Islamabad has built a solar car that can run at 80 km/hour and has a range of 80 km. The car has solar panels on all its sides and roof which provide the energy to run the car. The car can also be plugged into an electrical socket to charge the batteries when they get discharged and solar energy is not available. According to the the designer all components have been locally manufactured except for the motor which has been imported from overseas (and obviously panels must have been imported as well). The current version of the car is a 2-seater but a 4-seater is also under construction.

Solar Car

Solar Car

Solar Car

Solar Car

The car is registered in Islamabad under the local laws. The company that invented this car, known as Economia, wants to commercialize this car by offering it has an alternate to taxis running on CNG and/or fuel. The company has submitted a proposal to the Government of Pakistan to allow it to start a local taxi system in Islamabad with 30-40 taxi stands in important areas of the city. This is a very encouraging development but it remains to be seen if it is able to taste commercial success.

According to the specs provided on the website the 2-seater version runs on a 2.2 KW motor whereas the 4-seater version runs on two 2.2 kW motors. The operating voltage of the motor and batteries is 48 V. The car is expected to be highly efficient and cost only Rs. 1/km. The price of the different versions range from Rs. 350,000 to Rs. 525,000.

Parameter ECO-1/ECO-1L ECO-2GL
Voltage of Battery 48 V 48 V
Seats 2-4 4
Power 2.2 kW x 1 2.2 kW x 2
Distance Per Charge 80 km 80 km
Charge Time 2-3 hours 2-3 hours
Maximum Speed 40-60 km/hr 60-80 km/hr
Motor 2.2 kW x 1, 48 V 2.2 kW x 2, 48 V
Charger 48 V, 20 A 48 V, 20-40 A
Controller 48 V, 90 A x 1 48 V, 70 A x 2

Note:

1. Input of 2.2 KW at 48 Volts means the motor needs 45 Amps to run.

2. If the solar panels on the car are about 500 W (100 W for each side and 100 W for the roof) the car would need to charge for about 4.4 hours in the sunlight to provide 1 hour of drive time. Realistically speaking, the 500 W panels would be producing only half the rated power since they cannot all be aligned to the sun at the same time.

3. Assuming that when the batteries are fully charged they can provide 2.2 KWhr of energy or simply 2.2 KW for one hour. At Rs. 15 per unit the cost for charging the batteries from an electrical outlet comes out to be Rs.33. Now if this car is able to drive for one hour at 60 Km/hour the cost per km would be Rs. 0.55 (this is assuming 100% efficiency which is practically not possible).

Quaid-e-Azam Solar Park - ROI

The government of Pakistan has recently launched the Quaid-e-Azam Solar Park in the Cholistan desert near Bahawalpur. The project aims to produce 100 MW of electrical energy by end of 2014 and 1000 MW by end of 2016. This is a small step in the right direction. Countries like India, China and Germany are much ahead in the game with installed solar projects of 2600 MW, 20000 MW and 36000 MW respectively. Let us take a closer look at the price that we will have to pay for the energy produced.

The cost of the 100 MW project is around $131 million, that is the price per Watt is $1.31. That seems to be quite good, lets look closely. We know that 400,000 panels are to be installed in the first phase to produce 100 MW of electrical energy. This means that each Solar Panel would produce 250 W and the cost of each panel would be $327.5 or Rs.32750.

Assuming that there is peak solar energy available for six hours daily, each solar panel would produce 1.5 kWhr of energy each day or 547.5 kWhr of energy per year. This amounts to 13687.5 kWhr of energy over a 25 year period (assuming that the performance of the Solar Panels does not degrade over the 25 year period). Now assuming that each unit of energy (kWhr) is sold at Rs.15 the total energy produced by the Solar Panel over its life period amounts to Rs.205312.5 i.e the revenue earned from selling electricity is 6.27 times the investment (205312.5/32750=6.27).

Solar Park Bahawalpur

Solar Park Bahawalpur

In other words the investment is recovered in 4 years and you have free electricity for the remaining 21 years. Please note that the above calculations do not include the operational costs, if any. Also, the above analysis assumes that the performance of the Solar Panels does not degrade over its life time.

Final Comment: The location of the proposed project does not seem to be optimum as Bahawalpur is receiving 2000 kWhr per squared meter per year as opposed to vast expanses of Balochistan that receive 2200 kWhr per squared meter per year.

Solar Payback Time in Pakistan

It is quite well known fact that installing a solar system at your home requires a large initial investment. But it is also known that solar panels have a typical life period of 25 years. Other equipment used in a solar system such as batteries, charge controllers and inverters have a shorter life span and may need to be replaced every 2-4 years. In this article we try to calculate the payback time of a simple solar system that uses all its energy in real time converting DC voltage produced by the solar panel to AC voltage through an inverter.

Let us assume that our load requirement is 500 W and we have 5 solar panels of 100 W each. We next assume that we have an inverter also rated at 500 W. Let us further assume that the solar panels receives peak sunshine for 6 hours daily (this is called Peak Sun Hours and is quite complicated to explain in this brief article). Therefore the total energy produced during a 24 hour period is

500 W x 6 hr = 3000 Whr = 3 kWhr

In one month the solar panel would produce

3 kWhr x 30 = 90 kWhr or 90 units of energy

Now assuming that a unit of energy is sold to you at Rs. 15 (including all the taxes and surcharges) the total savings per month are

90 units x Rs. 15/unit = Rs. 1350

Now let us look at the investment we made in the solar system. Solar panels are widely available in the local market for Rs.100/watt. This results in Rs. 50,000 investment in solar panels. An additional Rs. 10,000 are spent in the inverter. So the total cost of the solar system is Rs. 60,000.

So the payback time of this solar system is

60,000 / 1350 = 45 months or 3.75 years

This is highly encouraging because all your investment is recovered in less than 4 years and you have 21 years of free energy from your solar system.

Solar Payback Time in Pakistan is about 4 Years

Solar Payback Time in Pakistan is about 4 Years

Note:

1. The above analysis is also valid for grid tied systems where the energy is sold to the grid during the off peak hours (day time) and  bought from the grid during peak hours (evening, night time).

2. A real system would also need some batteries to provide backup when there is a power shut down and solar energy is also not available.

3. Although solar system is expected to have 25 years of life, it will not operate at 100% throughout this life period e.g. it might be operating at only 80% after 20 years.

Solar Irradiance as a Function of Wavelength

Solar Irradiance I(\lambda) refers to Solar Energy falling on to the Earth on a unit area. Since this Solar Energy is limited to certain wavelengths (or frequencies) therefore it is usually given as a function of wavelength and the has the units of Watts/m2/wavelength. This is shown in the figure below for a unit area perpendicular to the solar rays and lying outside the Earth's atmosphere. This is referred to as AM0 since there is zero atmosphere, as opposed to AM1.5 which is on the Earth's surface.

Solar Spectra

So roughly speaking we can say that most of the Solar Energy lies between the 0 to 4 micrometer (NREL gives the AM0 spectrum from 280 to 4000 nanometer). A device that can capture all of this energy would be very useful and this is the aim of all modern Solar Cell manufacturers. The total Solar Power available on a surface of unit area can be easily calculated by integrating the above given Solar Irradiance curve from 0 to infinity and this gives us a magic number of 1367W/m2 (the value of the dotted curve at 4000 nanometer).

But all of this power does not reach the Earth's surface. Some of it is absorbed on the way. The total Solar Power available on the Earth's surface is equal to 1000W/m2 i.e. a reduction of 27% from that outside the Earth's atmosphere. The magic number of 1367W/m2 might be important for satellites using Solar Panels for their energy requirements and orbiting the Earth outside its atmosphere.

The Solar Spectra can also be calculated by using the theory of Black Body Radiation. According to this the Solar Spectra can be well estimated by a Black Body radiating at a temperature of 5960K (blue curve).

Note:

1. The Irradiance of 1000W/m2 is under ideal conditions (bright sunny day, at zero altitude and solar rays perpendicular to the capturing surface) but even this is not available to a Solar Home since the Solar Panels only have 15%-20% efficiency. So a 1m2 Solar Panel might only give you 150W-200W under ideal conditions. But do not get depressed yet as new research findings promise Solar Cells with efficiencies as high as 45%.