Changing the playing-field

New regulations try to reverse the solar revolution, but one company shows why it is a must

 Just as regulators make a last-ditch effort to prevent solarization, the fillings of detailed conversion plans by a steel company shows why the time for conversion has become, and why the distribution companies will be their best customary disappear unless they follow a model somewhat like that of K-Electric. While a report in the latest issue of this newspaper’s Profit magazine discusses how the new regulations are trying to put the screws on solar consumers, by switching them immediately from their present net metering basis to a net billing basis. Presently, the number of solar units generated are deducted from the units consumed, and the consumer billed for that. Under a net billing basis, the consumer’s full consumption would be charged against the amount generated, which would be paid at a lower rate. The idea is basically to cancel the advantage that was initially offered, with the hurry being to push through changes so that they are in place by the time the hot weather begins, and airconditioners, room coolers and other cooling devices are switched on.

However, the filing by BECO, to the Pakistan Stock Exchange, shows why industry generally will shift over to solar power. One of the most common reasons mentioned for industry in the country have been the power tariffs. The government has focussed on this, and has come up with various packages meant to encourage power use. One of the most difficult phases recently was with the Captive Power Plants, which had a very high price of operation, and which were rendered unworkable because they were supplied with gas costing too much. Like textiles, steel is also a heavy consumer of electricity. BECO’s filing shows that it hopes to save Rs 201 million a year, almost twice the Rs 111 million profit it reported the year before.

Those are figures no commercial enterprise can be expected to ignore. (This is not to forget that tariffs will go only up, making the savings only greater. Of the distribution companies, only K-Electric has tried to get into solar generation. The only downside to solar power is that oil need not be imported to run generation plants. As oil import involves a huge ecosystem of importers and oil marketing companies, solar conversion riles those interests, which are clearly fighting every inch of the way.