Pakistan emerged as the sixth-largest solar energy market globally, demonstrating “rapid adoption” of solar power and providing valuable lessons for other emerging economies, according to a recent World Economic Forum (WEF) report.
The country’s shift toward renewable energy aims to mitigate the impact of rising fuel prices and long-standing challenges in its energy sector, including circular debt, power theft, and transmission losses that have caused blackouts and inflated electricity costs.
With over nine hours of sunlight in most regions, Pakistan possesses ideal conditions for solar power generation. The World Bank notes that utilizing just 0.071% of the country’s land for solar photovoltaic (PV) systems could meet national electricity demand.
However, renewables, including solar, wind, and biomass, currently contribute only 5.4% to Pakistan’s total installed power capacity of 39,772 megawatts. Fossil fuels dominate the energy mix at 63%, followed by hydropower at 25%, according to the National Electric Power Regulatory Authority.
The WEF report attributes Pakistan’s solar energy surge to plummeting solar panel costs and soaring grid electricity tariffs, which have increased by 155% over three years.
“Declining solar panel prices, coupled with skyrocketing grid electricity tariffs, are fueling a rush in renewable energy adoption in Pakistan, with solar power leading the way,” the report stated.
In 2023, Pakistan imported 13 gigawatts (GW) of solar panels and added over 2,200 megawatts (MW) of solar capacity, according to BR Research report.
A significant factor behind this trend is China’s overproduction of solar panels, making Pakistan the third-largest destination for Chinese solar exports. By mid-2024, Pakistan had imported 13 gigawatts (GW) of Chinese solar modules, with projections reaching 22GW by year-end.
Solar adoption has surged across industrial, agricultural, and residential sectors, partly due to the inability of state-owned energy providers to ensure stable supply and the government’s inconsistent energy policies marked by inefficiencies.
“Grid electricity demand dropped by more than 10% in the past fiscal year as inflated tariffs burden consumers,” the report added. This decline has encouraged businesses and individuals to shift toward self-generated solar energy.
The WEF emphasized the need for policies like offering credit for solar projects in off-grid areas and unbundling customer categories to further accelerate renewable energy adoption.
“Pakistan’s journey underscores the importance of balancing policy innovation with market adaptation to drive sustainable and equitable energy solutions,” the report concluded.