Pakistan has quickly become one of the largest markets for solar energy, joining major solar consumers within just two to three years. In the first half of the current fiscal year, Pakistan imported 13 gigawatts of solar panels, making it the third-largest importer of Chinese solar panels globally, according to the World Economic Forum. This surge in imports has significantly boosted the country’s renewable energy sector, with solar panels now accounting for over 30% of Pakistan’s total energy production, which reached 46 gigawatts in 2023.
The rise in solar energy adoption is driven by domestic consumers and businesses looking to reduce high electricity bills. Additionally, the past decade has seen a 90% drop in solar panel prices, accelerating the country’s shift to solar power. The government’s role has been crucial, eliminating a 17% sales tax and implementing a net metering policy, which has further expedited the solarization process.
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The rising cost of electricity, partly due to unfavorable agreements with Independent Power Producers (IPPs), has intensified the need for alternative energy sources. Between 2019 and 2023, Pakistan made capacity payments totaling 6 trillion rupees ($21.5 billion) to IPPs. The shift to solar energy has alleviated some of the economic pressures caused by reliance on imported coal, while also contributing to environmental sustainability. This transition has strengthened energy security, created jobs, attracted foreign investment, and supported environmental goals.
