oil and gas

Homeowners weigh solar PV to offset rising bills

August 1, 2021

Green electricity: Interest growing among residential property owners and proprietors of commercial establishments

With air-conditioning systems operating at full throttle amid Oman’s peak summer season, the impact on electricity bills stripped of subsidy is driving many homeowners to consider solar photovoltaic (PV) installations to offset their rising electricity costs.

With effect from January 1, 2021, electricity costs have soared by as much as 50 per cent for certain categories of consumers, including non-Omani residential customers and others with a monthly consumption above certain thresholds specified by the government.

The uptick is the result of higher tariffs that have come into force under the government’s ‘Tawazun’ programme aimed at reducing the annual budget deficit and reining in soaring public debt. Barring low-income citizens who are being covered by a safety net, all other consumer segments will be subject to subsidy-free tariffs by 2025, which marks the end of a phased five-year programme for the complete rollback of power subsidies.

According to a number of solar PV contractors contacted by the Observer, growing numbers of homeowners and well as proprietors of commercial establishments are seriously weighing the benefits of solar PV systems to keep their power bills in check.

“In Muscat Governorate, we’re seeing interest from homeowners who are currently not on the shortlist of the Sahim initiative for grid-connected solar PV systems,” said an executive of a leading solar EPC contractor, who asked not to be named as he’s not authorised to speak on behalf of the company.

“Some of the interest is from developers of new residential and commercial buildings who want to make it attractive for tenants to consider their properties in today’s extremely competitive real estate market. Interest is also coming from commercial establishments in Muscat, Suhar, Sur and Nizwa, among other places.”

The Authority for Public Services Regulation (APSR), which is overseeing the implementation of the Sahim initiative — also known as the National Renewable Energy Programme — has announced that it plans to float a competitive tender before the end of this year, covering the first tranche of 500 residential properties targeted for grid-connected solar PV coverage in the capital region. The scheme will be progressively expanded to cover other parts of the Sultanate with the ultimate goal to connect between 10 – 30 per cent of all residential buildings across the country.

With payback assured within four years in most cases, the advantages offered by solar PV systems make sound financial sense, say experts. They credit subsidy reform and higher tariffs for the burgeoning interest among customers mulling solar PV to manage their power bills.

To ensure that the Sahim initiative is financially viable and operationally sustainable, APSR has come up with a mechanism that would allow private developers to design, install, operate and maintain the solar PV systems against a long-term agreement reached with the local distribution company.

Homeowners covered by the scheme will be required to pay a modest payment upfront, which is calculated on the basis of their expected savings. Any surplus output from the solar systems will be injected back into the grid, with the resulting benefit shared in some fashion between the developer/investor and the homeowner.

omanobserver

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