Solar Power Boom in Pakistan

Jul 10, 2024

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

Arif Habib Limited
@ArifHabibLtd
- Net metering's share in total generation rose by 112 bps YoY in Oct’25, reflecting increased solar adoption and lower grid dependence.
- Overall power generation down 3.7% YoY in Oct’25. NEPRA expects power demand to grow by 2.8% YoY in FY25.
- On MoM basis, net metering units increased by 43.3%.- Net metering's share in total generation rose by 112 bps YoY in Oct’25, reflecting increased solar adoption and lower grid dependence.
- Overall power generation down 3.7% YoY in Oct’25. NEPRA expects power demand to grow by 2.8% YoY in FY25.
- On MoM basis, net metering units increased by 43.3%.

https://x.com/ArifHabibLtd/status/1999074511019471347?s=20

Dec 11, 2025
Riaz Haq

Pakistan plans large battery storage to ‘stabilise grid’ - Business -

https://www.dawn.com/news/1959871

Move aims to manage renewable intermittency, reduce frequency fluctuations, minister says
• Clean energy share rises to 46pc, surpassing 2025 capacity target

ISLAMABAD: The government is working on large, utility-scale Battery Energy Storage Systems (BESS) to ensure stability of the national grid, which is currently facing challenges such as frequency fluctuations caused by the induction of intermittent renewable energy sources faster than planned targets.

“The government … is pursuing the development of large-scale battery energy storage systems through private-sector investments to address the intermittency of variable renewable energy, optimise grid demand management, and enhance overall system stability,” Power Minister Sardar Awais Leghari told the National Assembly in a written statement on Friday.

In response to a series of questions from various MNAs, the minister also confirmed that the government was gradually moving away from Liquefied Natural Gas (LNG) as part of its policy to reduce reliance on imported fuels amid higher capacity contracts, increasing induction of indigenous renewables, and stagnant demand.

Clean energy share

The minister said the clean energy share in the country had reached 46 per cent by September 2025 against the government’s 40pc capacity target for 2025.

He added that the government had set ambitious targets under its various power policies to increase the share of on-grid renewable energy capacity to 40pc by 2025 and 60pc by 2030.

Currently, 60 private-sector renewable energy projects with a cumulative capacity of 4,753MW are operational, including 680MW of solar, 1,937MW of run-of-river hydropower, 1,845MW of wind, and 291MW of bagasse cogeneration.

Alongside 9,619MW of public-sector hydropower and 100MW of solar in K-Electric’s system, renewables account for more than 37pc of the generation mix.

“Net-metering-based solar photovoltaic [PV] has further added 6,390MW as of September 2025, raising the clean energy share to approximately 46pc, thereby surpassing the government’s 40pc renewable energy capacity target for 2025,” the minister said.

In parallel, the minister said the government had finalised an initial quantum of 800MW for the Competitive Trading Bilateral Contract Market framework to provide market access to renewable energy producers and enable large consumers to enter into direct supply contracts with producers of their choice, subject to a wheeling charge of about Rs13 per unit.

Mr Leghari emphasised that the availability of reliable, efficient, eco-friendly, and affordable electricity was crucial for sustainable economic growth. “Therefore, the government is prioritising the effective use of renewable and indigenous energy sources through its national policies aimed at diversifying the energy mix by promoting clean and renewable sources such as wind, solar, hydropower, and bagasse,” he added.

LNG reliance

Discussing LNG diversion, the minister reported that dependence on imported fuel plants had comparatively reduced in recent years, and priority was being given to the utilisation of local energy resources, including Thar coal, solar, wind, bagasse, and hydropower, to minimise reliance on imported fuels.

He conceded that dependence on imported LNG had comparatively decreased in recent years. “This policy shift is primarily aimed at promoting indigenous and renewable energy resources and ensuring least-cost dispatch in the overall generation mix,” he added.

He continued that the government was actively promoting the adoption of solar energy technology at the consumer level across residential, commercial, and industrial sectors.
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Dec 13, 2025
Riaz Haq

Pakistan unveils new net metering rules for rooftop PV – pv magazine International

Pakistan’s National Electric Power Regulatory Authority (NEPRA) has initiated a public consultation on proposed revisions to solar net-metering regulations. A key change under consideration is a reduction in the tariff for surplus solar power, which could be cut by half from PKR 26 ($0.093) per kWh to PKR 13 per kWh.

https://www.pv-magazine.com/2025/12/18/pakistan-unveils-new-net-met...

Pakistan’s NEPRA has launched a public consultation on new rules it intends to apply to PV systems up to 1 MW operating under the country's net metering regime.

The Prosumer Regulations 2025 are intended to replace the Net Metering Regulations issued in 2015.

Under the new rules, the sale of surplus power to the grid will be made through a new net billing arrangement, with PV system owners being credited based on a nationally determined average energy purchase price rather than full one-to-one net credits.

Furthermore, surplus power will be purchased by the utility at Pakistan’s national average energy purchase price, which will likely be lower than current incentive rates. According to local media outlet Daily Times, the tariff may drop from around PKR 26 ($0.093) per kWh to PKR 13 per kWh.

Moreover, the standard net metering agreement term should be reduced from 7 years to 5 years, with extensions being possible by mutual consent of prosumers and utilities. The existing agreements under the 2015 regulations will continue until their terms expire. Afterward, new terms under the 2025 rules would apply.

The proposed changes, if implemented, will mean the country will transition from a pure net-metering mechanism toward a net billing approach, which NEPRA says will balance renewable adoption with utility sustainability and grid reliability.

Distributed solar under net metering, on the other hand, has seen a vertiginous development in Pakistan over the past two years.

The country installed 1.2 GW of net-metering capacity across the first six months of 2025, according to figures from the Islamabad-based think tank Renewables First.

Cumulative net-metering capacity increased from 4.9 GW at the end of last year to 6.1 GW by the end of June. The growth rate is slower than that recorded during the second half of 2024, when 2.5 GW of net-metering capacity was added.

Rabia Babar, manager data for energy and climate at Renewables First, told pv magazine that while H1 2025 saw a surge in net-metering applications, the pace of issuance slowed. “As of June, over 4,000 new net metering connections were pending with various utilities, with regulatory bottlenecks contributing to a growing backlog,” Babar explained.

Dec 18, 2025

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Solar Power Boom in Pakistan

Riaz Haq

Riaz Haq

Riaz Haq