Industry complained that it was being afflicted by loadshedding, and the result was the IPPs. Now industry is at the forefront of the complaints of the current high tariff. The only reason industry is not going off the grid by conversion to solar power, is because of the dependence on it to provide power round the clock. WAPDA officials as well as the IMF apparently see solar power as a threat, even though they should not. The IMF team currently in Islamabad has been told that the current buyback price of Rs 27 per unit would be cut to Rs 10 per unit. This comes after the Federal Tax Ombudsman decided that excise duty and withholding tax would apply according to electricity used, as if the consumer did not have a solar meter. This comes as there has been a settlement with the commercial banks for Rs 1.25 trillion of circular debt, not eliminating it, nor ensuring that no more is incurred, but reducing the cost of servicing it.
However, the basic problem remains the tariff. A report by the International Energy Agency shows that whereas Pakistani industries are charged 13.5 cents per kWh, the equivalent charges in the USA and India are 6.3 cents, in China 7.7 cents, in the EU 7.5 cents, and as low as 4.7 cents in Norway. The difference is so stark as to make increasing exports impossible, thus undermining the basis of the government’s economic strategy, which depends on export industries not only to earn the foreign exchange necessary for debt servicing, but also to create the jobs needed for the youth bulge.
The possibility of export industries switching to solar power should increase with the solving of the technological problems of maintaining storages, and the economics of installing them. Solar power is supposedly best for domestic consumers. Industrial and commercial consumers would prefer buying from the grid, because a solar solution requires sufficient ground or roof space. Industries consume vast amounts of power, and may not have enough room for the solar panels required. Commercial consumers like markets may have inadequate roof space. However, if the supply is erratic, and prohibitively expensive to boot, they cannot be blamed for seeking out other avenues, even if those do not fit in with the wishes of the utility companies.
