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ISLAMABAD, 04 Oct. - (ANA) - Pakistan’s clean energy boom came seemingly out of the blue. In just a few years, the country went from near-zero solar power to the sun providing almost 20% of its electricity. Moreover, solar has done something that decades of subsidized fossil fuels couldn’t: massively expand energy access in rural, off-grid areas.

 

The clincher is, this shift didn’t happen through complicated political processes. It’s been a grassroots movement shaped by a perfect storm of supply and demand — showing that a different pathway to a clean energy future is possible. 

 

Pakistan has witnessed one of the most rapid and unanticipated transitions to clean energy, driven largely by homes and businesses installing rooftop solar panels. In just a few years, the country’s electric grid transformed from negligible solar power to an expected 20% of all its electricity coming from solar by 2026.

 

What began as a modest adoption under a 2015 incentive program transformed into a mass phenomenon a decade later, with households, businesses and farmers rapidly turning to solar. While energy transitions are often imagined as a complicated political process that requires long-term planning, international climate finance or industrial policy, Pakistan proves a different story is possible: A revolution driven by market forces, rather than climate-driven or state-led green policies.

 

 

 

 

Solar adoption in Pakistan resulted from a “perfect storm” of supply and demand.

 

On the demand side, an unprecedented hike in electricity tariffs — up 155% in just three years — rendered grid power unaffordable for many people and businesses. Industrial and residential users faced sharp price increases as subsidies were withdrawn. Simultaneously, Pakistan’s economic crisis, high global fuel prices and mandatory fixed costs to maintain underutilized fossil-fuel plants compounded the spiralling costs.

 

On the supply side, global solar panel prices fell by nearly 50% due to Chinese manufacturing overcapacity, while Pakistan exempted solar photovoltaic (PV) imports from duties and sales taxes until mid-2025. Together, these factors made rooftop solar systems (also known as distributed solar PV) financially attractive.

 

In agriculture, the removal of diesel subsidies further tipped the balance toward solar pumps, while maintaining the grid stability made solar appear more dependable than grid.

 

The combination of these demand- and supply-side disruptions made solar an infrastructure of necessity. It offered cheaper, more reliable and more immediate energy relief compared to the grid. Pre-existing policies which supported this included the favorable net-metering policy — which subsidized customers to sell power into the grid at a price higher than just the fuel saving; legacy subsidy programs for off-grid solar for rural households and agriculture; and policies for development of utility-scale power plants.

 

Between 2019 and 2025, cumulative solar panel imports surpassed Pakistan’s total installed power plant capacity by 2 gigawatts (GW). Yet only a fraction of this was utility-scale (0.7 GW) and connected to the grid suggesting a paradigm shift in the country’s power sector, with rapid growth of small solar PV systems, the actual scale of which is difficult to estimate.

 

 

 

 

Pakistan’s residential sector became an important early adopter as it sought more affordable electricity, particularly by households consuming large amounts of electricity. They faced volume-based prices where the last unit of electricity used is priced at a much higher rate than the first unit in an effort to protect energy access for its poorer residents. As tariffs rose steeply, many high-consumption households installed rooftop systems to reduce demand on the grid. In 2020, 10% of consumers were paying unsubsidized tariffs. By 2024, that number decreased to 1%, while those benefiting from net-metering policies rose from 57% to 89%.

 

Off-grid households, especially in remote provinces like Balochistan and Sindh, where grid access remains below 70%, have increasingly come to rely on stand-alone PV systems, as well. With an estimated capacity between 1 GW and 1.7 GW, stand-alone solar home systems are now the most common off-grid electricity source, enabling households in poor and remote areas to access daytime electricity for their basic needs — a service that was until now unavailable to them.

 

Farmers, too, were among the earliest movers in the agricultural sector’s shift away from using diesel generators and/or an unreliable power grid. Contributing roughly 19% of the country’s GDP and employing about 38% of its workforce, the trajectory of the agricultural sector’s shift to using solar  represents one of the least discussed but most transformative changes.

 

Of the 1.5 million to 2 million nationwide tube wells (which are pumps that provide groundwater to crops), 80% relied on imported diesel units unconnected to the grid. As diesel became expensive with the removal of subsidies, solar pumps became much more cost effective. At the same time, the grid was becoming more unreliable, also motivating a shift to solar. As a result, agricultural electricity demand decreased by 34.3% in 2024.

 

Estimates by experts suggest that half of the tube wells will switch to solar power, adding 5.6 GW to 7.5 GW of distributed PV capacity — equivalent to 1 million U.S. residential rooftop solar systems. This shift has not only restructured energy in rural Pakistan but also reduced dependence on costly imported diesel.

 

Businesses in the industrial sector also embraced renewable systems to hedge against both tariff hikes and frequent electricity supply interruptions. Given that industry was already dependent on expensive backup diesel and gas generators, the removal of subsidies improved the business case for solar adoption in the industrial sector as well. Export-oriented industries, especially textiles, found solar doubly beneficial – lower costs and cleaner electricity for global competitiveness. While solar plus batteries cannot yet ensure full energy independence, it has significantly reduced the strain on the electricity grid, with industrial demand falling from 31,008 GW per hour (GWh) in fiscal year 2023 to 27,830 GWh in fiscal year 2024.

 

AB/ANA/04 October 2025  - - -