The severe electricity shortage in the country has increased the demand for solar panels in Pakistan.
- According to industry reports, the current market demand for solar panels has grown from 350 megawatts (MW) per year in 2013 to approximately 1500 MW this year.
- “People still have doubts about the effectiveness of solar power systems and don’t want to invest a lot of money there. Even minor differences in price per watt make a huge difference because one solar inverter system is powered by thousands of watts.”
Homage recently launched their new solar power inverter system, marking the company’s foray into the solar panel product category. The product comprises an inverter, solar panels and a chargeable gel battery.
Explaining the reasons behind the launch, Parsa Rafiq, Director Marketing, Homage, says that Pakistan’s ongoing energy crisis and spiralling electricity costs are not going to end anytime soon. Therefore, it is anticipated that there will be an increased demand for sustainable power-backup systems, especially solar systems.
“We were already selling solar power inverters and batteries and considering the high demand for alternative power solutions, we decided to add solar panels to our portfolio.” Rafiq adds that given that most areas in Pakistan receive an average of six to eight hours of sunlight most of the year, solar panels are well-suited to our local weather conditions.
According to industry reports, the current market demand for solar panels has grown from 350 megawatts (MW) per year in 2013 to approximately 1500 MW this year and this trend is expected to continue in the forthcoming years. Most of the demand is currently met through imported solar systems from China, Germany and the US; local production capacity is limited to approximately 10 MW per year, leaving a demand gap of 1400 MW.
According to industry reports, the current market demand for solar panels has grown from 350 megawatts (MW) per year in 2013 to approximately 1500 MW this year.
Apart from the electricity shortfall, multiple reasons have contributed to the increase in demand of solar-powered systems in Pakistan. Key among them, thanks to the waiver of the 17% GST and five percent customs duty imposed on imported solar panel components and systems, is the reduction in the price of solar products. Other factors include a growing awareness about the benefits of alternative energy solutions and the increased availability of these products at affordable prices.
According to Rafiq, the irregular supply of electricity in rural areas, particularly in Punjab and northern areas, is a major reason why sales of Homage solar panel products are significantly higher there compared to Pakistan’s metropolitan cities. “We have been doing a lot of geographical targeting, especially when setting up our sales and distribution networks in remote locations,” says Rafiq.
Yet, despite Homage’s strategic targeting and extensive marketing budget, the company is facing fierce competition. The market is flooded with non-branded, imported solar panels and components, and thanks to their comparatively lower prices they control 90% of the market. The competitive landscape in solar power technology includes local manufacturers who, in a bid to get ahead of brands like Homage, have acquired the globally recognised TUV certification (a document confirming that a product meets international safety requirements and quality standards) from the EU for their solar panel systems. This can turn into a significant advantage for them as most of commercial (industrial and office) customers prefer brands that carry this international certification.
Homage is confident that despite competition, their solar panel inverter systems will gain a stable market position, because according to them, unlike the imported, unbranded solar power systems, they make no compromise on quality; Homage maintain they use the latest technology and procure the solar panels from top-of-the-line international manufacturers, all of whom have international quality certifications.
According to Rafiq, “although non-branded importers present a challenge, they are mostly dumping faulty or poorly manufactured products in the market and are swiftly losing consumer trust. Homage has strong brand equity and a loyal customer base.”
In terms of locally-made panels, Homage’s products are priced lower than TUV-certified ones and this gives them a distinctive cost edge. Homage also offers customers a variety of package options depending on their budget and power requirements.
The brand also faces competition from the manufacturers of lead-acid based batteries (mostly used in cars) where the established players (AGS, Exide and Volta) control 80 to 90% of the market.
Acid batteries are more cost-effective than the gel-based batteries which Homage offer as part of their solar inverter system. Despite this, Homage believe that their brand’s identity as the country’s largest home energy solutions provider will help them stay ahead of the lead-acid battery manufacturers.
According to Rafiq, “this is the first year these brands have started promoting themselves as UPS or solar system battery providers. I am not in a position to say whether they have made significant changes in their car batteries before marketing them as a battery source for power backup systems or not. What I can say is that Homage has been specialising in this category for years and we have established our expertise in this category.”
“People still have doubts about the effectiveness of solar power systems and don’t want to invest a lot of money there. Even minor differences in price per watt make a huge difference because one solar inverter system is powered by thousands of watts.”
It is this brand image that Homage has been promoting in a series of TVCs that were developed for the launch. According to Kamran Ali, Creative Director, Aray Wah (Homage’s creative agency), “we used humorous situations and simple words to explain to the aam admi how the solar panel inverter system works and drive home the point that not only will they have uninterrupted electricity, they will also end up saving a lot of money.” This is why the tagline of “Bachat aur aqalmandi ka poora package” (an intelligent system that yields cost savings) for the campaign is very apt.
However, retailers dealing in solar-powered appliances are of the opinion that brand recognition alone is no match for the lure of lower prices of non-branded products. As Muhammad Ahmad, a retailer on Hall Road in Lahore, puts it, “people still have doubts about the effectiveness of solar power systems and don’t want to invest a lot of money there. Even minor differences in price per watt make a huge difference because one solar inverter system is powered by thousands of watts.”
Only time will tell to what extent Homage will succeed in grabbing a major share of the solar power market. However, their massive distribution network and advertising campaigns should provide a major push to the brand and encourage more people to install alternative energy systems in their homes and offices.