Published in Sep-Oct 2019
Pakistan’s energy structure is heavily dependent on fossil fuels such as coal, oil and natural gas, which due to increasing population, urbanisation and industrialisation (apart from being extremely costly resources) are not meeting Pakistan’s current energy needs. Added to this are the weak and old distribution and transmission networks which have further widened the gap between demand and supply. Furthermore, it is expected that demand will increase eight-fold by 2030 and 20-fold by 2050 (source: Solar Energy Development in Pakistan: Barriers and Policy Recommendations). Therefore, it is imperative to look for alternative, renewable sources to produce electricity and at the same time, reduce environmental hazards such as the greenhouse effect and carbon emissions.
With eight to nine hours of sunshine per day, Pakistan’s topography and climatic conditions are ideal for solar power generation which can overcome these challenges. In fact, according to the Pakistan Alternative Energy Development Board, Pakistan has the potential to generate 2.9 million MW of clean solar energy annually.
Keeping all this in mind, Skyelectric (a solar energy solution providing company) began operations in Pakistan in 2017 with the objective of providing solutions for Pakistan’s chronic power outages, all the while reducing carbon emissions by promoting clean and cost-effective energy solutions through their Smart Solar System for homes and businesses.
Skyelectric was established by Ashar Aziz, a US-based Pakistani electrical engineer from MIT. A Silicon Valley entrepreneur, in March 2014, Aziz made it to the Forbes List of 1,646 billionaires in the world for establishing FireEye, a computer security company offering protection against a range of advanced cyber threats in the US.
Recently, Skyelectric launched a month-long advertising campaign in Pakistan titled Powered By Intelligence to promote their unique ‘Smart Solar Systems’ as well as to increase brand exposure and their customer base. The campaign was rolled out via TV, print, OOH and digital and featured celebrities including film star Shaan Shahid and Aziz says the response has been terrific.
According to Aziz, most solar energy companies in Pakistan are importers and distributors for third-party vendors. They import batteries, inverters, solar panels and other equipment from different sources and combine them to deliver solar energy solutions. However, as they import all the components, they are unable to provide 24/7 remote or onsite monitoring and support services. Skyelectric, on the other hand, “has its own assembly line for manufacturing an integrated Smart Energy System, inclusive of a solar panel, battery pack and energy inverter designed to optimally combine three sources of energy – solar, grid and battery.”
Skyelectric’s Smart Energy Inverter (the backbone of the Smart Energy System) is an energy meter which is cloud connected via built-in 3G/4G and WiFi, and keeps up-to-date information about grid tariffs, outage schedules, solar energy patterns and weather predictions. It has a built-in AI-based software called The Smart Flow, which by using the above data ensures maximum energy availability in any household or office at the lowest cost. For example, during the day, a home/office is run entirely on solar energy, while the excess energy is stored in the battery for use when there is no sunlight. When it is time to charge the storage battery, the software will detect high tariff periods (typically between five p.m. and nine p.m.) or low tariff periods (nine p.m. onwards) on the grid and let the battery charge when tariffs are low.
The inverter also has a Smart Energy Console (a touch screen that gives consumers an instant picture of the energy produced and consumed on their premises). Skyelectric use lithium-ion batteries in their systems which they say have a much longer life span (of 10+ years) compared to traditional lead-acid batteries. Aziz says that although a lithium-ion battery may prove expensive initially, it recovers its cost quickly as battery replacements are not required every two years. Furthermore, because the entire system is connected via the internet, real-time information of every system goes into the cloud, which is monitored in a Network Operation Centre 24/7 by technicians. This allows Skyelectric to remotely diagnose a problem (even if a customer is not aware of it) and fix it. For Aziz, the Smart Inverter, the battery and the fact that the entire system is cloud connected differentiate them from the competition and hence their tagline: ‘The World’s Smartest Solar System’.
So far the largest proportion of the company’s revenue is generated by the residential segment and customers include business owners, doctors, army officials and professionals. Customers have the option to either pay the installation costs in cash or in instalments by taking advantage of solutions offered by the banks Skyelectric has partnered with, such as Bank Alfalah, JS Bank and Meezan Bank.
Aziz points out that “as electricity prices have increased over the last two years, people are ready to shift to solar. They may not care about pollution but they do want a long-term cost-effective solution.” He adds that Skyelectric’s system is more economical than conventional grid or generator rates.
One of the most commonly used metrics to assess the financial viability of energy projects is the Levelised Cost of Energy (LCOE) – the average revenue per unit of energy output. “At present, the LCOE of Skyelectric’s Smart Solar System is Rs 11 per KWh (kilowatt hour) compared to one unit (kWh) of electricity from the grid costs Rs 18, and the generator Rs 34 per kWh,” says Aziz According to Aziz the company have sold several thousand systems in 30+ cities, including Faisalabad, Islamabad, Karachi, Lahore, Multan and Peshawar. They have sales and experience centres across Pakistan to enable quick deliveries; they also serve as venues where customers can get a live demonstration of the Smart Solar System.
The company’s next objective is to increase Skyelectric’s market presence through an educational and awareness campaign across all media. Aziz believes that due to low-quality importer-suppliers operating in the market, people are of the opinion that solar energy providing services do not work reliably. “Once people learn more about solar and lithium ion battery technology, and especially its efficacy in the long-term, they will become enthusiastic adopters and evangelists of the system.”