Blogs
Blog #1 : Solar Revolution in Pakistan; Challenges & Prospects
The solar energy sector in Pakistan, like any other young industry, is booming; nonetheless, it is accompanied by several complications and hurdles. Despite having enough sunlight, Pakistan is still unable to relish the complete benefit of solar power. According to research, Pakistan receives around 5.3 kWh/m²/day of solar radiation and out of 365 days, around 300 days are considered sunny annually, making it one of the sunniest countries in the region and yet the contribution of solar energy towards the national grid is minimal. The reasons behind this unwretched state vary from financial constraints to a lack of regulations in governmental policies and heavy dependence on imports. This disparity needs to be addressed if Pakistan wants to have an uninterrupted power supply in future. In this piece, key challenges along with the possible way forward will be discussed.
Key challenges:
- The game-changer Net metering policy introduced in 2015 is facing serious irregularities at the hands of NEPRA, which is sending waves of anxiety towards the stakeholders. Blistering price fluctuations in the buyback rates demotivates consumers, especially at the residential level. It is not only reducing the trust among users towards the long-term benefits of solar energy but also discouraging the entry of new consumers. The wave of uncertainty went through the apprehensive consumers when in March 2025 Economic Coordination Committee approved the reduction of payback rates but then had to take back the decision due to stakeholders’ backlash and public outcry.
- The upfront cost of the solar system skyrockets which makes it extremely difficult for the average household and SMEs to even consider the use. Bank financing i.e. green energy financing by notable banks has been initiated but high interest rates, red tape and lack of awareness hinder the uptake of such financing. Although solar pays back its investment in the 4 to 5 years, the huge upfront payment makes it extremely difficult for the middle class in our country. The use of solar energy remains stagnant among upper-class households and vast industrial plants.
The 95% equipment of a solar system including inverters, batteries and solar panels is majorly imported. The custom duties and taxes make it extremely overpriced, and depreciation of PKR adds further stress to the pockets of users. Average middle-class residents cannot even think of using such a hefty amount towards this cause. At the same time, customs delays and late deliveries lower the trust of users in the solar companies and government sector.
- Power distribution companies perceive the net metering policy as their financial loss. They tend to delay or postpone the approval for net metering for weeks and sometimes months, increasing the anxiety of already aggrieved consumers. Simultaneously, the national grid also lacks the capacity to handle the sporadic power input from the solar sector. It makes the adoption even more complex.
- According to the 2024 UNDP report, merely 10% or fewer solar workers have proper or formal training. The lack of quality control leads to dissatisfied customers. The number of unregistered and unauthorized solar companies and installers in the market has increased in recent years making it complex for the consumers. Similarly, substandard panels and cheap batteries and inverters in the market puzzle the average consumer in decision-making. It does not only lead to the early faults in the system but is also ruining the reputation of solar energy in the market. There is no National Certification Framework in this field to date.
Way Forward:
- Net metering policy needs to be consistent, long-term and transparent to ensure the confidence of stakeholders.
- Solar technical certifications and licensing models at the National level should be launched by the government and notable private institutions.
- Micro-financing should be encouraged for the lower income groups i.e. SMEs and residential projects.
- DISCOs should be incentivized so that each stakeholder can work together in the expansion of the solar sector instead of fighting against each other.
- Local production of solar equipment should be incentivized at the governmental level.