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.

Load Previous Comments

Riaz Haq

Doug Lewin
@douglewinenergy
Something remarkable just happened in Pakistan.
In only 8 months, citizens built the equivalent of half the country’s national electric grid, without waiting for government or utilities.

How?
☀️ Cheap solar panels
☀️ TikTok tutorials showing how to install them
☀️ Farmers leading the way, swapping diesel pumps for solar

The results:
✅ Diesel sales dropped 35% in one year
✅ Families slashed costs and gained energy independence
✅ National demand on the grid actually declined because of so much distributed generation

This isn’t just about Pakistan. It’s a glimpse of how fast the world can shift when technology gets cheap enough and people take energy into their own hands.

These are the kinds of numbers that change the world.

🎧 Full Energy Capital Podcast episode with Bill McKibben here: https://tinyurl.com/mwmackr2

https://x.com/douglewinenergy/status/1958271947743301729

Aug 24
Riaz Haq

Pakistan's solar boom started to take off in 2023 when the price of solar panels from China dropped by more than 40%, as China ramped up its exports. Pakistani importers saw the potential to make a profit and bought them up en masse, selling them across the country. The solar transition further sped up in 2024, as the price of Chinese solar panels dropped even more, flooding the market with technology that many Pakistanis couldn't previously afford.

https://www.npr.org/sections/goats-and-soda/2025/08/21/g-s1-82369/s...

Adnan Shams, an electrician in Islamabad, says he has experienced the boom firsthand as more people call on him for solar installation. Earlier this summer, he attended a solar training course at National Skills University Islamabad, where the instructor taught students how to install panels. "[Solar] is beneficial in the long run, which is why the work is increasing," he says.

The proliferation of cheaper and more reliable batteries, used to store solar energy and also imported from China, now looks set to advance solar adoption as customers look for additional ways to reduce their bills and ensure a steady electricity supply.

Solar adoption reveals cracks in Pakistan's power system
But the millions of new solar users — like Zia and his neighbors — are having an impact on the financing of Pakistan's power sector.

That's because of reforms that date back to the 1990s. Pakistan was then struggling to produce enough electricity for its growing population. So the country set up long-term contracts to pay independent companies to produce electricity, regardless of how much is used.

These days, people are using less power from the Pakistani grid to avoid high electricity bills, says Rabia Babar, data manager at Renewables First. "The electricity cost in the country has increased so people are in conservation mode. They use less electricity to save [on] their electricity bills," she says.

As more Pakistanis add solar, demand for electricity from the grid has gone down, even though many still rely on the grid, especially at night.

As a result of this lessening demand and the government's continued obligation to independent power producers, "the same number of payments needs to be made by a lesser number of consumers," says Pakistan's energy minister, Awais Leghari.

He says the government is troubleshooting how to bring more industrial customers onto the grid to offset residential customers who are switching over to solar, while planning targeted subsidies for low-income users. "Our challenge is to get the demand to go up," he says.

Pakistan's capacity to generate electricity has also increased, with some residential and industrial solar producers selling the energy they make back to the grid by using net metering.

The Pakistani government has already taken several steps to regulate the residential solar industry, including lowering the rate it pays for electricity that household solar setups produce.

Aug 24
Riaz Haq

JinkoSolar attends 2nd China-Pakistan B2B investment summit, signing 2.3GW MoU - PV Tech

https://www.pv-tech.org/industry-updates/jinkosolar-attends-2nd-chi...

JinkoSolar, formally invited by the Outbound Investment Committee of the China-Asia Economic Development Association, joined the second China-Pakistan B2B Investment Summit convened by the Embassy of Pakistan. The summit, themed “Green Transformation and Digital Innovation,” brought together cabinet-level officials to frame the policy architecture for the China-Pakistan Economic Corridor (CPEC) 2.0.

Prime Minister Shehbaz Sharif, Planning Minister Ahsan Iqbal and Energy Secretary Aftab Ahmad reaffirmed Pakistan’s pledge of maximum policy facilitation and security coverage for Chinese investors in renewable-energy and digital infrastructure.

On the sidelines of the event, Jinko signed MoUs totalling 2.3GW with leading Pakistani energy groups for its Tiger Neo modules and integrated storage systems, covering module supply, BESS deployment and utility-scale PV plant development. The deals target optimization of Pakistan’s energy mix and its 30 % renewable goal by 2030.

Daniel Liu, Indo-Pacific GM, Bright Wang, Jinko ESS GM for APAC and Shehan, Pakistan Country Head, executed the agreements. Liu commented: “Pakistan anchors our South Asia strategy. After 4.4 GW delivered in 2024 and a 28% market share, we will deploy Tiger Neo 3.0 to cut LCOE and accelerate Pakistan’s green transition.”

on Saturday

PakAlumni Worldwide: The Global Social Network

Solar Power Boom in Pakistan

Riaz Haq

Riaz Haq

Riaz Haq