As you leave the city of Lahore and head beyond River Ravi, you see makeshift settlements of gypsies on both sides of the road. These settlements visible from a distance are spread over vast tracts of land but not powered by the grid. There are no electricity transmission lines in the vicinity but this does not mean the settlers are without electricity to power their electrical appliances. Their homes run entirely on solar power.

The sight of solar panels hoisted on the tops of tents and supported by stands is common. These solar panels, that receive sunlight and convert it into electricity with the help of inverters, are connected to household appliances including fans, LED lights and sockets to charge mobile phones. The whole system with 150 watt to 200 watt capacity is available for Rs12,000 to Rs16,000 and can power one fan, one or two LEDs and mobile charger. There is no need to add a battery if somebody wants to benefit from solar power during the day. But the ones who want their nights to be cooler as well can add a normal motorcycle battery to store energy for use when there is no sun. This would add slightly to the cost of the system.

This shows how popular the use of solar energy is becoming in a scenario where the electricity provided by the grid is getting expensive by the day and even unavailable for long hours. Though solar power systems for commercial purposes or for sale to the electricity distribution companies have been there for long, their use by households is a comparatively new thing. The selling pitch in this context is mostly the claim that the customers will be able to recover the cost within a couple of years. It is also claimed that the equipment has a long-life and its maintenance is quite easy.

However, the situation on ground is that the potential consumers are generally wary of such claims and depend primarily on testimonies of existing users in order to take a decision. Mostly, the walk-in customers who visit places like Hall Road in Lahore and Saddar in Karachi to buy solar power systems are duped by the low cost factor and end up buying low-quality stuff. And, "once a low-quality equipment malfunctions the seller or the agent asserts it was not maintained properly," says Muhammad Ramzan, proprietor of Prime Corporation, a solar power service provider.

Ramzan cautions buyers, "They must deal with credible companies that may charge comparatively higher but do not compromise on quality." He says in order to capitalise on its potential, many people have jumped into this business without having knowledge about the technology. "Beside most consumers are first-time buyers. It is easy to sell anything to them."

He calls for registration of all the sellers of this equipment, their standardisation and ratings. Once this is done, he says, "a large number of sellers of sub-standard equipment will disappear from the market".

Over the years, the solar technology has advanced and the per unit cost of solar panels has come down due to the economies of scale.

Muhammad Zahid Hussain, a sales agent, got a 1.5kW solar power system installed in his house. It cost him around Rs150,000 and it powers 5 fans, 12 LED lights, 1 LED TV, 1 PC and 1 fridge. He uses energy saving equipment so the collective load powered by the system is optimal. Hussain talked to many satisfied customers before deciding on which system to buy and from whom. "I purchased from a company that provides long-term guarantee and after sales service." He periodically washes the solar panels installed on the rooftop of his house.

The price of solar systems depends on power requirement of the consumer and the choice of battery selected for backup. Good batteries come with two-year guarantee and solar panels with 20 to 25 years guarantee. A standard large-sized system with 5kW costs around Rs450,000 and powers 8 fans, 12 LED lights, 1 LED TV, 1 PC, 1 or 2 fridges and 1 AC. The package may include backup batteries as well.

Azaz Malik, CEO Energy Matrix, a leading solar power service provider company in Lahore, believes the basic needs of any household can be met with systems ranging in capacity from 500 watts to 2000 watts. "Anything above this is luxury." So those who want to run ACs have to pay more.

He says one major advantage of solar energy is that it saves people excess units that might change the slab charged by electricity distribution companies. "People can use limited load on solar power systems and the remaining on the grid. The solar power systems have made UPS redundant".

The efficiency and expected savings from a solar-powered system is the number of days with sunlight and the number of hours solar panels are exposed to sunlight. For Lahore, the number of days with availability of sunlight is usually 320 and the average hours of exposure to sunlight is between 5.5 and 6 hours a day. The total number of hours when the solar panels will be producing power are calculated by multiplying the number of days with the average number of hours.

The sale of solar power systems has slowed down since the drastic appreciation in the value of dollar against rupee. "As the solar panels are imported, the price has soared," says Malik. The people are wary, he says, but "it is hoped they will go for it because of the benefits involved".

Commercial banks are offering financing opportunities to households at 6 percent markup to buy solar power systems but unfortunately this has not helped boost the sector much. The reason Malik points out is that the banks are reluctant to extend this facility to people who do not have the experience of availing bank financing facilities in the past. Unlike in the case of automobile financing, the banks cannot take possession of solar power systems in case of default because this equipment does not have value in the secondhand market. For this reason large funds handed over to the banks by the central bank remain unutilised.

Malik adds, "The financing facility is available only for high-power systems costing around Rs1.25 million and above which deprives a huge number of prospective customers from availing this facility." There is an urgent need to make this financing policy inclusive and extended to smaller consumers, he adds.

The alleged indifference on part of the government towards adoption of renewable energy has been termed a major impediment in this context. Ahmed Rafay Alam, an environmentalist with interest in urban planning, says Pakistan has failed to tap the potential of renewables because our energy sector is beholden to powerful vested interests. "If you move from fossil fuel to renewable, for example, what will you do with all the refineries importing and producing furnace oil for the energy sector? What about the consultants and contractors financed by the oil and gas sectors? Do you see them changing their (lucrative) business and doing something else?"

Alam points out that net metering is an incentive that can attract people towards solar energy. "Consumers can sell excess units to the electricity distribution companies or get these adjusted against the units consumed from the grid," he says.

Net metering is good, he says, if it results in a tangible benefit to the person who has decided to adopt it. "I have no idea why people have not taken advantage of solar home solutions coupled with net metering. Educational institutions should also think about this. They can sell all the electricity produced during the daylight hours after school timings. The households can produce excess units during the time when residents are away or all the appliances running on solar power are not drawing power."