Pakistan becomes a leading ‘Solar Market’ amid high electricity costs
Amid escalating electricity costs, Pakistan has emerged as a significant player in the global solar market, becoming one of the largest importers of solar panels. The World Economic Forum reports that the country imported 13 gigawatts of solar panels in the first half of the current fiscal year, making it the third-largest importer of Chinese solar panels.
Solar energy now contributes over 30% of Pakistan’s total power production capacity, which reached 46 gigawatts in 2023. This rapid growth has been fueled by soaring electricity prices and a significant drop in solar panel costs, which have fallen by 90% over the past decade.
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Government initiatives have also played a crucial role in accelerating solar adoption. The removal of a 17% sales tax on solar equipment and the introduction of net metering have made solar energy more accessible to households and businesses across the country.
Experts point to unfavorable agreements with Independent Power Producers (IPPs) as a key driver of high electricity costs. These agreements have cost Pakistan approximately PKR 6 trillion ($21.5 billion) in capacity payments between 2019 and 2024, prompting many to turn to solar energy as a cost-effective alternative.
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