Solar Power Boom in Pakistan

[Riaz Haq]

Falling solar panel prices and soaring rates for grid electricity are driving a renewable power boom in Pakistan. A second factor spurring the growth in clean energy installations is the requirement of major western apparel brands for garments and textile manufacturers to switch to clean energy. As a result, the solar panel imports in the country jumped from 2,800 MW in 2022 to 5,000 MW in 2023, in spite of stringent import controls imposed by the government. Solar imports are on track to reach 12,000 MW in 2024, according to solar installers. The total current installed generation capacity in Pakistan is around 40,000 MW. Grid electricity demand in Pakistan plunged in 2023 by nearly a sixth and a decline in 2024 would mark the first time in 16 years that annual electricity use has fallen consecutively, data from energy think tank Ember showed, according to Reuters.

Pakistan Solar Panel Imports. Source: PV Magazine

Omar Malik, the CEO of Shams Power, a major solar system contractor in Pakistan, was recently quoted by PV Magazine as saying: “In 2022, 2.8 GW of solar panels were imported into Pakistan. In 2023, about 5 GW, despite the import controls, and this year the prediction is for up to 12 GW”. 

Aamir Hussain, chairman Pakistan Alternative Energy Association, told Arab News that solar panels of around 1,800 MW were purchased and installed last year, which was expected to jump to 3,000 MW this year due to the lower prices of the panels and increased customer demand.

 “Pakistan will be spending over $3.5 billion [this year] on solar panel imports only as this doesn’t include import of batteries, inverters and other auxiliary items,” Hussain said. “Pakistan needs to follow consistent policies regarding renewable energy to meet its national and international obligations for the greenhouse gas emissions.”

Pakistan's Monthly Solar Imports in millions of US$. Source: Bloomberg

Japanese publication Nikkei Asia recently reported seeing residential building rooftops covered with solar panels in Islamabad. It also reported proliferation of rooftop solar in small towns and villages across the country. In particular, the Nikkei story mentioned the remote village of Kardigap with a population of 5,000, in Balochistan province, where solar panels are becoming more common on the rooftops of houses. 

Responding to western apparel brands' demand for sustainability, a number of large Pakistani textile manufacturers are switching to clean energy, particularly solar. Tayyab Group of Industries (TGOIs), a major textile manufacturer, has recently signed an MOU to install a 20 MW solar system for its needs. Gul Ahmed Textile Mills Limited announced recently that it will install a 17.1 MW roof-top solar power plant to meet its energy needs.

While rapid uptake of solar is good news for the planet, it does create a major fiscal issue for the Pakistani government struggling to pay for power produced by the independent power producers (IPPs). The IPPs, many of them Chinese, secured a guaranteed return on investment indexed to the U.S. dollar, plus payment for fixed capacity charges -- covering their debt servicing and other fixed costs -- regardless of whether the power plants are operational, according to Nikkei Asia. As the demand for the grid power from the IPPs declines with rising solar, the taxpayers are still on the hook for the unused installed capacity charges running into billions of dollars. Higher power tariffs and taxes will only make the situation worse. 

Capping Net Metering power and reducing payments for supplying excess power to the grid are not going to solve the problem either. It will only encourage more consumers to switch to rooftop solar and use less electricity from the grid. Self consumption of the rooftop solar power saves significant energy costs for the consumer. 

It seems the only way forward for the Pakistan government is to renegotiate the terms with the IPPs to significantly reduce grid power costs to address the growing cost gap between rooftop solar and the grid power. 

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[Riaz Haq]

Pakistan to cut power prices in a sign economy stabilising

https://www.reuters.com/world/asia-pacific/pakistan-cut-power-tarif...

ISLAMABAD, April 3 (Reuters) - Pakistan will cut power prices for domestic and industrial users, Prime Minister Shehbaz Sharif said on Thursday, in a sign of the economy's recovery from the brink of default.
The International Monetary Fund stepped in to stabilise the Asian country's finances with a standby arrangement in 2023 and then a $7 billion bailout last year.

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Lower power prices will be a relief to Pakistanis after several increases in the past couple of years.

Pakistan's $350 billion economy has been struggling since inflation rose to record high of 38.50% in May 2023, with growth turning negative, reserves shrinking to barely a couple of weeks of controlled imports, and interest rates jumping to 22%.
"We have successfully brought the inflation down to single digit," Sharif said, adding that the nearly 10-percentage-point reduction in the country's main interest rate in the last year would help businesses grow.

The tariff will be cut by an average 7.41 rupees ($0.0264) per kilowatt-hour to 34.47 rupees for domestic users, and by an average 7.59 rupees per kilowatt-hour to 40.60 rupees for industrial users, Sharif said.

[Riaz Haq]

How Pakistan quietly became world’s biggest solar importer | The Independent

Stuti Mishra

https://www.independent.co.uk/climate-change/news/pakistan-solar-en...

There was no sweeping law, no global investment blitz, no prime minister announcing a green revolution. And yet, by the end of 2024, Pakistanimported more solar panels than almost any other nation in the world.

The South Asian country, facing economic challenges and high energypoverty, is witnessing one of the most unexpected clean energy success stories of the decade.

Pakistan has joined the ranks of the world’s leading solar markets, importing 17 gigawatts of solar panels last year alone, according to the Global Electricity Review 2025 by Ember, an energy think tank in the UK.

This surge represents a doubling of the previous year’s imports, and makes Pakistan one of the top global buyers of solar panels.

The scale of Pakistan’s imports is particularly striking because it is not driven by a national programme or utility-scale rollout.

Instead, the majority of the demand appears to come from rooftop solar installations by households, small businesses and commercial users looking to secure cheaper and more reliable electricity in the face of frequent power outages and rising energy costs.

According to Ember’s report, rooftop solar installations in homes and businesses in the country has soared as a “means of accessing lower-cost power”.

Pakistan’s experts echo this analysis.

Muhammad Mustafa Amjad, programme director at Renewables First, tells The Independent that the solar boom is best understood as a “survival response” by people and businesses that were “increasingly being priced out of the grid due to inefficient planning and unreliable supply”.

“It marks a structural shift,” he adds, “in how energy is perceived in Pakistan.”

Pakistan’s solar panel imports in fiscal year 2024 alone, Mr Amjad says, amount to roughly half of the national peak power demand.

“Rooftop solar is fast becoming the preferred energy provider,” he adds. “And the role of the grid has to massively adapt in order to remain relevant in a fast-transitioning energy economy.”

Ubaid Ullah, an energy expert in Karachi, argues that the energy transition is driven by people taking matters into their own hands.

“If you look at satellite images of any Pakistani city,” he tells The Independent, “all the roofs appear blue, covered in solar panels.”

In a region often plagued by grid instability, solar panels have emerged as a practical alternative to unreliable public supply. The sharp increase in imports in 2024 follows years of worsening power cuts, fluctuating tariffs, and high costs associated with diesel generators and imported fuels. Rather than waiting for national reforms, many Pakistanis began adopting solar technologies directly – often installing panels and inverters without much reliance on subsidies or centralised planning.

This makes Pakistan’s solar growth somewhat unusual in the global landscape.

In many countries, solar adoption has been closely tied to climate policy or international financing. Pakistan’s solar boom, in contrast, appears to be a response to market logic and local necessity, not climate diplomacy.

The Ember report notes that Pakistan's growth is happening largely “outside formal energy planning frameworks”.

Industry experts say there is minimal direct government intervention in Pakistan’s solar journey. In fact, the infrastructure is struggling to keep up.

While regulators have approved net metering policies and eased import restrictions in recent years, there have been no major public spending programmes or large-scale solar auctions to match the pace of adoption seen at the household or commercial level.

Despite importing record volumes of solar panels, Pakistan’s official grid-connected solar capacity remains far lower, indicating that much of the new solar is operating off-grid or behind the meter, where it escapes inclusion in national electricity statistics.