New Delhi: Even as its economy charts a shaky path, handheld by the IMF, Pakistan is seeing a solar revolution that is being sponsored by cheap Chinese equipment imports. And this growth in green energy is majorly driven by consumers who were forced to look for an alternative source after electricity tariffs in the country continued to climb. This largely unorganised growth of solar energy is also becoming a headache for the government, which is feeling the pinch clearing bills of conventional power producers despite their declining demand.
Pakistan is now the world’s leading solar importer. The transformation is so sweeping that solar panels are now part of wedding dowries. In 2024 alone, Pakistan imported 17 gigawatts of solar panels, more than double the previous year. Chinese manufacturers like JinkoSolar, Trina Solar, and Longi dominate Pakistan’s solar panel supply, accounting for more than 95 per cent of imports.
“There was already an underlying acceptability. People were used to finding creative solutions — in agriculture, in rural areas, in cities — to deal with load shedding. Even in less affluent regions like KP, South Punjab, and interior Sindh, adoption is strong due to unreliable grids. In some dowries, families now include a 3kW solar system — a sign of how mainstream and accessible solar has become,” Waqas Moosa, chairman of the Pakistan Solar Association and CEO of Hadron Solar, told ThePrint.
Pakistan’s solar growth
In the first four months of 2025, solar farms supplied 25.3 per cent of the country’s grid electricity, placing Pakistan among just 17 countries worldwide to have achieved a monthly solar share of 25 per cent or more.
This exclusive club is mostly made up of wealthier European nations, with only Pakistan representing the ‘Global South’. Despite its lower GDP per capita, Pakistan has rapidly expanded solar use, driven by a fivefold increase in imports of Chinese solar modules since 2022.
A series of tailwinds also pushed the growth. According to Moosa, net metering regulations introduced around 2015 made solar more attractive to the urban middle class, giving them a way to recover investment by selling excess power to the grid.
Net metering lets users with solar panels earn bill credits for excess power they send to the grid, so they only pay for the net electricity they consume.
Pakistan currently purchases solar-generated electricity from domestic, commercial, and industrial producers at a rate of PKR 27 per kilowatt-hour. Installation costs are typically recovered in 2–5 years.
Around the same time, the State Bank of Pakistan introduced a subsidised financing scheme, offering low-interest loans for solar panels at just 6 per cent, compared to prevailing commercial rates of 13-14 per cent. That suddenly made solar affordable for a much wider segment of the population.
Electricity tariffs, meanwhile, continued to climb. Because many of Pakistan’s long-term energy contracts with private producers are denominated in US dollars, the devaluation of the Pakistani rupee in 2022 pushed tariffs sharply higher. Households faced rising bills just as imported solar equipment became more expensive.
In 2023 and 2024, came the final catalyst: a crash in global panel prices, driven by an excess of Chinese supply. That crash dramatically lowered the cost of going solar in Pakistan, even with the rupee still under pressure.
“Everything just aligned,” Moosa said.
“The demand was there. Financing was there. Net metering was there. And when panel prices collapsed, growth just mushroomed. That’s really the story. A few trends were already building but around 2023 and 2024, everything came together. Boom. The whole industry just moved up a notch,” he added.
A grassroots-led game-changer
What makes Pakistan’s solar growth unique, experts say, is that it wasn’t led by the government or massive utility projects, but by retail consumers — household, agricultural, or industrial level, seeking alternatives to unreliable and expensive grid power.
“Over 90 per cent of our installations are at the household, agricultural, or industrial level,” Moosa noted. “This is a bottom-up revolution. It’s a shift like what we saw with telecom, from landlines to mobile.”
Pakistan’s solar shift has been driven by both necessity and opportunity. Chronic power outages and a faltering national grid have long plagued the country. Power tariffs have soared more than 150 per cent since 2021.
Today, around 30 per cent of solar panels serve agriculture, mostly powering tube wells. Another 25–30 per cent is installed in urban areas with net metering, 30 per cent supports industrial use, while the remainder consists of small, off-grid setups in rural homes and businesses, according to Moosa.
The solar boom is also creating new job opportunities and demand for skilled workers.
“While local manufacturing is still limited, and most panels and parts come from China, there is potential for Pakistan to build its own industry — if it can compete on cost. For now, Chinese imports remain the fastest and cheapest way to meet demand,” Haneea Isaad, an energy analyst at the US-based Institute for Energy Economics and Financial Analysis, told ThePrint.
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Reforms and then restrictions
The very success of Pakistan’s grassroots solar revolution is now giving rise to new challenges, particularly for the country’s debt-ridden grid and state-owned utilities.
“The rapid and unregulated growth of solar energy in Pakistan is starting to affect the national power grid. As more people turn to solar, demand for electricity from large, centralised power plants is falling. But the government is still locked into expensive contracts with these fossil fuel plants, which require fixed “capacity payments” whether or not the power is used. This cost gets passed on to regular grid users, making electricity more expensive for them,” Isaad added.
Despite 35 GW of installed capacity nationally, solar only contributes an estimated 10–15 per cent to the national grid. When off-grid systems are included, solar could be covering up to 25 per cent of Pakistan’s electricity needs.
However, the shift has hit the national grid hard. Power sales fell 2.8 per cent year-on-year in June amid an $8 billion sector debt. The government, unprepared for the rapid transition, now faces financial strain from fixed-price contracts and gas subsidies. In response, it has imposed a 10 per cent tax on imported solar and proposed reducing payments for surplus solar energy.
Pakistan’s government is preparing to slash net-metering buyback tariffs for solar power from PKR 27 to PKR 10 per kWh — over a 60 per cent cut — to align with national base tariffs and global norms, according to local reports.
The move, part of a revised solar policy expected within a month, could save the cash-strapped government PKR 4.3 trillion ($15.1 billion) over the next decade. Current buyback rates for large-scale solar plants are already much lower, at PKR 9–11 per kWh.
The new policy comes as Prime Minister Shehbaz Sharif’s administration pushes economic reforms under an IMF-supported plan, which includes shifting to cheaper renewables to reduce oil imports and ease energy sector debt.
Still, demand has proven resilient. Battery imports hit $95 million in just three months, as users invest in storage to go off-grid and avoid feeding power into the system. “Even at 15 per cent loan rates and without subsidies, people are still buying (batteries),” Moosa said. “The momentum is self-sustaining now.”
While the grassroots solar boom has transformed Pakistan’s energy landscape, it has outpaced policy and infrastructure. There’s still no comprehensive roadmap for managing this decentralised growth.
The end of the SBP financing scheme, rising taxes, and lack of local manufacturing pose real risks. But the broader lesson, analysts say, is that when incentives, necessity, and affordability align, transformation can come from the ground up.
“It’s clear that solar has transformed access to energy. In many rural areas that were never connected to the grid, small home solar systems now provide affordable electricity. This shift has made Pakistan’s energy system more consumer-focused and independent,” said Isaad.
(Edited by Aamaan Alam Khan)