Residential solar PV systems to cut electricity bills by 40%

Owners of residential premises in the Sultanate looking to participate in ‘Sahim II’ — a landmark initiative by the Authority for Electricity Regulation (AER) to support the wide-scale deployment of grid-connected solar photovoltaic (PV) systems atop homes — can anticipate savings amounting to around 40 per cent of their annual electricity bills.
The projected savings are part of an array of financial, economic and environmental benefits expected to accrue to the sector and the wider national economy, according to an official representing the sector regulator.
Mohammed al Harthi, Project Coordinator — AER, said the Authority’s analysis indicates that Sahim II has the potential to deliver, among other things, natural gas savings ranging between 2-6 billion standard cubic metres (sm3) over 25 years. This translates to gas savings (Net Present Value) averaging RO 300 million over a 25-year timeframe.
“It will also contribute to a reduction in system peak demand during summer months and lower system demand overall in hours of solar availability. Any reduction in peak system demand would translate to lower investments in networks and production capacity,” Al Harthi stated in a presentation on the Sahim II initiative at the Oman Sustainability Energy and Technology Summit held in Muscat recently.
In addition to slashing the electricity bills of retail customers by up to 40 per cent annually, the Sahim II programme will also contribute to huge reductions in CO2 emissions averaging 6 million tonnes over 25 years, said the official.
“The Authority firmly believes an initiative on this scale would deliver positive net benefits to residential customers, the electricity sector and the national economy as a whole,” said the Project Coordinator.
More than 200,000 residential buildings, representing around 30 per cent of residential premises in the Sultanate, are expected to be part of the Sahim II initiative. Participants will have small (3-5 kilowatt-peak) grid-connected PV systems installed on the rooftops of their premises during the phased rollout of the programme.
Significantly, participating customers will be required to make a one-off contribution to be part of the initiative. “This is a one-time payment calculated by the Authority estimating expected four-year bill saving,” said Al Harthi.
“Customer contribution payments go towards the Authority’s differed costs for Sahim.”
Developers selected to deploy rooftop PV systems will recover their costs through the sale of Demand Reduction Services (electricity produced and consumed by the customer) to Licensed Suppliers. Licensed Suppliers are obligated to procure Demand Reduction Services through licence modification. Customers will benefit through the free use of electricity generated via PV (beyond Year 4), in turn reducing their reliance on the grid during hours of peak demand, he explained.
Detailing the timeline for the tendering and procurement of the programme, he said a Request for Proposals (RfP) for the first batch of rooftop installations is expected to be issued in the first quarter of 2020. Actual installation of the rooftop PV systems will commence before the end of the year, he added.