pakistan solar quality potential: target segments & products · source: pakistan energy...

Bundesverband Solarwirtschaft e.V. (BSW-Solar)

Pakistan Solar Quality Potential:Target Segments & Products

Luz Aguilar

International Project Manager

Dubai. 26th September 2017

© BSW-Solar

Power sector in Pakistan: supply & demand scenario

Source: MoWP

The power deficit was near 5 GW in summer 2016

� Multiple power generation projects

from various sources are currently

in the pipeline and are envisaged to

eliminate the power deficit by 2019

- if expected projects are

completed on time

� PV based projects can play a key

role in the elimination of the power

deficit, particularly in the industrial

and residential sectors.

19917

21599

25080

27600

30938

17500

14121

21096

18738

26590

23107

17107

24262

18262

25961

Capacity

Availability

Demand

Source: CPPA, NEPRA and AEDB

� Share of RES steadily

increasing each year

� 1136 MW of RES

installed by 2016,

mainly PV, wind and

micro/mini hydropower

� Goal to install 9700 MW of RES by 2030

2010 2011 2012 2013 2014 2015 2016

RE 50 106 408 1136

Nuclear 462 787 787 787 787 787 1.127

Thermal 14.240 15.753 15.888 15.852 16.963 16.963 16.814

Hydro 6.555 6.627 6.627 6.928 7.097 7.097 7.121

21,257 MW 23,167 MW 23,302 MW 23,617 MW 24,953 MW 25,255 MW 26,197 MW

RE

Nuclear

Thermal

Hydro

Power sector in Pakistan: installed capacity

Solar irradiation levels - Pakistan

High irradiation levels

Across the country 4.5-7 kWh/m2/day

In particular: Punjab & Sindh provinces:

4.5 – 6.0 kWh/m2/day

High PV potential in both rural and

urban areas. Industry concentrated in

Punjab & Sindh provinces.

Power sector in Pakistan: higher demand in the

domestic & industrial sector

Source: Pakistan Energy Yearbook 2015

Increase of 11,000 GWh in the last 5

years, specially in the

domestic and industrial

sector

� Significant and increasing energy demand in the country

� Policy on FITs (Feed in tariffs) catalyzing project development

� Introduction of net metering

� Introduction of import quality standards

� Financing available for PV

Rationale for PV development

Methodology of the study

Development of customized

questionnaire

Development of customized

questionnaire

Compilation & review of

published data/statistics on

solar PV

Compilation & review of

published data/statistics on

solar PV

Identification of the key

value chain actors

Identification of the key

value chain actors

Interviews conducted with key

solar PV value chain actors

Interviews conducted with key

solar PV value chain actors

Results based on interviews and

complemented with statistics and

available market data

Results based on interviews and

complemented with statistics and

available market data

Trend of import of PV panels: Oct’14 - Sept’15 vs.

Oct’15 - Sept’16

• Federal Board of Revenue (FBR), GoP, 2016 • Panel volume imported (MW) calculated based on 0.7 USD/Watt (FBR Valuation Ruling No. 620/2013)

Chinese PV panels have the highest share of imports into Pakistan which has increased between 2014 and 2016.

This is attributed to price competitiveness with similar products from other countries, extensive customer outreach

through dealership networks and a large variation in product quality/pricing which caters to different economic

classes of customers.

95.60% (975.3 MW)

0.62% (6.3 MW)

1.39% (14.1 MW)

0.40% (4 MW) 0.53% (5.4 MW)

1.47% (15 MW)

Oct'15 - Sept'16

China

UAE

Malaysia

Germany

Hong

Kong

Others

94.98% (497 MW)

3.20%

(16.7 MW)

0.22% (1.1 MW) 0.21% (1.1 MW)

1.40% (7.3 MW)

Oct'14 - Sept'15

China

UAE

Germany

Korea

Others

Trend of import of inverters: Oct’14 - Sept’15 vs.

Oct’15 - Sept’16

• Federal Board of Revenue (FBR), GoP, 2016

• Inverter volume imported (MW) calculated based on 37.5 USD/kW (FBR Valuation Ruling No. 751/2015)

• Inverter statistics presented are for all inverters imported into country (i.e. for use with PV systems and also for use as

UPS for charging only from the grid )

Chinese inverters have highest share of imports into Pakistan which has increased between 2014 and 2016. The

reasons behind this dynamic are the same as in the case of import of PV panels i.e. price competitiveness with

similar products from other countries, extensive dealership networks and a large variation in product quality/pricing which caters to different economic classes of customers.

65.01% (1007.4 MW)

3.11%

(48.1 MW)

2.86%

(44.3 MW)

6.01%

(93.2 MW)

2.55%

(39.5 MW)

20.46% (317.1 MW)

Oct'14-Sept'15

China

UAE

UK

Germany

Finland

Others

71.54% (1328.8 MW)

6.93%

(128.8 MW)

4.21%

(78.3 MW)

3.17% (58.9 MW)

2.58% (47.9 MW)

2.16% (40.1 MW)

2.13% (39.5 MW)

7.28% (135.1 MW)

Oct'15-Sept'16

China

Germany

Finland

UAE

Other EU

States

UK

Italy

Others

Trend of import of charge controllers: Oct’14 - Sept’15

vs. Oct’15 - Sept’16


• Charge controller volume imported (MW) calculated based on 37.5 USD/kW (FBR Valuation Ruling No. 751/2015)

High proportion of ‘Chinese’ Charge controllers being imported into the country with the same reasons behind

this dynamic as those already cited above for the case of PV panels and inverters. Overall volume of Charge

controllers imported from Germany has increased over the last year, although there has been a minor decrease in the market share

36.03 % (211.1 MW)

25.86 % (151.5 MW)

23.58 % (138.1 MW)

4.47 % (26.2 MW)

3.35 % (19.6 MW)6.72 % (39.4 MW)

Oct'14 - Sept'15

China

Germany

USA

Singapore

Italy

Others

32.78 % (237.7 MW)

21.98 % (159.4 MW)

19.37 % (140.5 MW)

7.02 % (50.9 MW)

5.96 % (43.2 MW)

2.60 % (18.9 MW)

2.41 % (17.5 MW)

2.04 %

(14.8 MW)

5.83 % (42.3 MW)

Oct'15 - Sept'16

China

Germany

USA

Italy

Other EU

states

UAE

Turkey

Sweden

Others


• Deep cycle battery volume imported (tonnes) calculated based on 1.72 USD/ kg (FBR Valuation Ruling No. 723/2015)

High proportion of Chinese ‘deep cycle’ batteries being imported into the country with the same reasons

behind this dynamic as those already cited above for the case of PV panels and inverters. Overall volume of

batteries imported from Germany has increased over the last year, although there has been a minor decrease in the market share

85.13% (24,970 t)

3.24% (950.0 t)

3.03% (888.1 t)

3.70% (1086.6 t)

1.81% (530.6 t) 0.98% (286.4 t)0.47% (137 t)

1.65% (483.2 t)

Oct'15 - Sept'16

China

Vietnam

USA

Korea

Singapore

Other EU

statesGermany

Others

Trend of import of deep cycle’ batteries: Oct’14 -

Sept’15 vs. Oct’15 - Sept’16

82.44 %

(19,900 tonnes)

5.17% (1249 t)

2.62%

(634.3 t)

1.97% (475.2 t)

2.57% (621.3 t)

1.03% (247.9 t)

0.49% (117.4 t)

3.71%

(899.8 t)

Oct'14 - Sept'15

China

USA

Vietnam

France

Korea

UK

Germany

Others

Results based on interviews and market research

Results based on interviews with PV key value chain actors (wholesalers, importers, installers, retailers etc.) and on market research. The list is not exhaustive

and may not include all available brands. The component brands are listed in no particular order. Considering the scope of this study, it was not possible to assess

the specific market share of each respective brand mentioned here. Classification of equipment into ‘Tiers’ is currently not possible, due to the lack of quality

standards in Pakistan.

Inverters BatteriesPV panels

Yingli (China)Kyocera (Japan)Rene Sola (China)LG (Korean)JA Solar (China)Canadian Solar (China)Alfa Solar (Germany)Hitek (UK)Jinko Solar (China)GH (Belgium)Trina Solar (China)Solar World (Germany)Phono (China)Beyond PV (Taiwan)Eurener (Spain)Hanergy (China)Shanghai Solar (China)

Long (Vietnam)Hoppeke (German)Powersonic (China)Trojan (USA)Narada (China)Baykee (China)JTE (China)CSB (Taiwan)Huawei (China)Sunny Power (China)Inti Power (China)

Voltronic (Taiwan)Schneider Electric (French)Sacred Sun (China)SMA (Germany)ABB (Swedish-

Swiss)Outback (USA)Nedap (Holland)Sungrow (China)Baykee (China)Studer (Swiss)TBB Power (China)Fronius (Austria)Victron (Holland)I-Energy (Taiwan)Kaco New Energy (Germany)

PV products & service range in Pakistan

imported brands available

Results: payback expectations

Question: What are the ‘Payback expectations’ from PV products of the different customer segments in the

Pakistani market?

Note: ‘Customers’ collectively refers to clients from the residential, commercial, industrial and public sectors

The shortest payback expectations

are for the commercial sector (3.5

years), followed by the industrial

sector (4.5 years)

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

5,0

Commercial Residential Industrial Public Sector

3.5 years

5 years

4.5 years

5 years

Pa

yb

ack

Tim

e (

ye

ars

)

Target Sector for PV Products

Results based on interviews with PV key value chain actors (wholesalers, importers, installers, retailers etc.)

Question: What is the proportion of ‘Certified’ PV components in the local market?

0

2

4

6

8

10

12

14

16

18

20

Inverter Battery Panel

14%

9%

20%P

rop

ort

ion

of

Ce

rtif

ied

Co

mp

on

en

ts in

Pa

k M

ark

et

Solar system components

Exact statistics on the specific brands and their respective volumes being imported into Pakistan are only available with the customs authorities. However, this information is

restricted and classified.

Low proportion of ‘certified’ PV components available in the local market


Results: certified PV components

Perception of the PV market segments

http://www.sbp.org.pk/smefd/circulars/2016/C3.htm

CommercialIndustrial

Typical installation size1 MW – 10 MW

High potential industries & locations • Textile (spread across Punjab province)• Sports (focused in Sialkot city)• Food industry (across the country)• Pharmaceutical industry (Karachi)

Possible project financing models• Financing through recently announced scheme for

RE project financing by State bank of Pakistan. Loans being offered at 6% for solar PV projects up to 50 MW

• Conventional financing through lending from bank along with equity from project developer

Product preferencesBased on past trends, industry prefers to install reliable and high quality components to ensure project bankability.

SMA, Schneider and ABB quite popular in terms of reliability compared to Chinese products

Typical installation size100 kW – 1 MW

High potential segments & locations • Hospitals (across the country)• Private educational institutions• Hotels & restaurants (across the country)• General provision stores (across the country)

Possible project financing models• Financing through recently announced Scheme

for RE project financing by State bank of Pakistan. Loans being offered at 6% for solar PV projects up to 50 MW

• Conventional financing through lending from bank along with equity from project developer

• Equity

Product preferencesIn the past, tendency to install cheaper and less reliable quality Chinese brands. However, slowly trend moving towards increasing awareness leading to installation of SMA, Schneider and ABB due to high level of reliability


Perception of the PV market segments

1. http://www.sbp.org.pk/smefd/circulars/2016/C3.htm

Residential Public sector (Government funded)

Typical installation size1 kW – 20 kW

High potential locations

• Urban centers (Karachi, Lahore, Islamabad, Rawalpindi,

Faisalabad, Multan, Hyderabad)

• 40,000 un-electrified off-grid villages across the country

• Agricultural areas across Punjab, Sindh and KPK

provinces owned by farmers with land holdings of different

sizes

Possible Project Financing Models

• Financing through recently announced scheme for RE

project financing by State bank of Pakistan. Loans being

offered at 6 percent1 for solar PV projects up to 50 MW

• Equity

• Funding through donor projects in off-grid areas

Product Preferences

High price sensitivity exists with niche market for ‘high

quality’ and certified products. Large proportions of clients in

this sector opting for Chinese products although increasing

interest in ‘certified’ high quality products as result of ‘lessons

learnt’

Typical installation size50 kW – 200 kW

High potential segments & locations

• Public hospitals & health facilities

• Government educational institutions (across the

country)

• Public parks and recreation facilities (across the

country)

• Public offices (across the country)

Possible project financing models

• Public financing from national approved budget as per PC-

1 document

• Grant aid from international donor agencies

Product preferences

Tendency remains to maximize project size within allocated

budget. Also, ‘open’ tenders bidding mechanism based on

awarding project to ‘lowest’ bidder results in high quality and

durable products losing out to competitors offering lower

quality products

* Results based on interviews with PV key value chain actors (wholesalers, importers, installers, retailers etc.)

Net Metering introduced by NEPRA in Sept 2015.

To increase the share of PV and generate revenue by feeding

back into the grid. It is expected to install 4000 MW of PV

through net metering in the next 3-4 years

Challenges Opportunities

Financing through recently announced scheme for RES project

financing by State Bank of Pakistan. Loans with 6% interest

rate for solar PV projects up to 50 MW

Implementation of ‘Import Quality Standards’ to be

implemented soon. It will ensure reduction in ‘uncertified’

solar PV components in the market and promote quality

‘certified’ products

Limited technical expertise & product knowledge on

PV components leads to issues during commissioning

for system configuration and also during operation

Limited after sales’ support of European products in

comparison to e.g. China.

‘High Price sensitivity’ for European products

compared to non-European products.

• Residential sector: customers willing to pay 20%

Industrial sector: 30 to 40% higher cost

• Commercial sector:10-15% higher cost

‘Customer awareness’ for PV and the benefits of

investing in high quality and certified equipment need

to be increased

German products enjoy high level of trust and reliability in all

customer segments of the Pakistani solar PV market. Specially

grid tied systems

The focus should be on Large industry (textile, sports,

pharmaceutical etc.) . These industries are the mainstays of

the Pakistani economy generating a high annual profit.

Solar pumping applications also possess considerable

potential for projects in the pipeline from the public sector in

Sindh and Baluchistan provinces

* Results based on interviews with PV key value chain actors (wholesalers, importers, installers, retailers etc.)

Business environment for German PV companies:

opportunities & challenges

Technical consulting services

(techno-economic feasibility studies, grid

connection studies, support in project

tendering process, monitoring of

commissioned projects, maintenance and

operation of large scale grid connected &

medium scale PV projects)Batteries (Flooded or AGM)

The residential, off-grid & the commercial

sector installations requiring battery back

up. Installed system are expected to scale

up to use the economic benefits of net

metering and will require larger battery

banks.

(Potential for high quality batteries exists

but price competitiveness will other

comparable products will be critical)

‘Grid tied’ inverters

for use in medium scale (100kW-1 MW) and

large scale (>1 MW) grid connected projects

being set up by industrial and commercial

sectors.

(Price competitiveness with comparable

products from other countries will be critical)

Products Services

PV testing & monitoring equipment

(battery testers, PV panel testers, PV

analyzers, PV panel flash test equipment)

EPC Companies

for developing both commercial sector

(kW scale) and large scale (>1 MW) grid

connected projects

EPC contracting companies with a strong

profile of developing large scale projects

are in high demand


Target segments for German PV products & services

Study online available

https://www.solarwirtschaft.de/enabling-pv.html

Next activities: establishing the Solar PV sector

through quality

• To disseminate targeted information about quality companies, certified installers and products to the different segments and consumers

• To qualify the banking sector about the evaluation of PV projects and the benefits of quality PV

• To standardize procedures of PV installation through certification

• To stimulate the trade exchange

On behalf of the GIZ from September

2017 - August 20119

Thank you for your attention

Luz Alicia Aguilar

International Project Manager

German Solar Association

Phone: +49 (30) 29 777 88-40

E-Mail: [email protected]

© BSW-Solar

pakistan solar quality potential: target segments & products · source: pakistan energy...

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