Return on Investment (ROI) Analysis of OFF-Grid Solar Photovoltaic System in Residential Sector of Pakistan

Pakistan being a developing country is observing a rapid rise in electricity demand and currently the big cities such as Karachi, Quetta, Rawalpindi and Lahore are most severely affected by the recent power crises. Therefore, at this time it is important to explore and investigates the alternate and renewable power sources in the country. This study investigates the significance in terms of economic feasibility of off-grid solar photovoltaic systems in the residential sector of Pakistan. Study area comprises the rural and urban residential sector of all four provinces of Pakistan. The return on investment and project payback periods are calculated using the NEPRA defined electricity tariff inclusive of tax so that a concrete conclusion of investing in off-grid solar could be drawn. Results of this study show that most selected areas in Pakistan have sufficient solar radiation potential for electricity generation. Study finds that solar electricity in Pakistan is one of the cost effective and environmental and social friendly forms of electricity. Payback periods of photovoltaic system in Sindh, Baluchistan, Punjab and KPK have been calculated 3.98, 2.33, 3.99 & 6.78 years, respectively. Results of this study may be useful for collective as well as individual consumers while calculating the economic viability of an off grid solar system. Keywords: Photovoltaic System, Solar potential, Electricity, Off-Grid Solar System, Return on investment, economic feasibility, Pakistan.