In barely four years, Pakistan has gone from a country enduring up to eighteen hours of daily loadshedding to one of the world’s fastest-growing solar markets. The numbers are striking.
In 2024 alone, Pakistan imported 17 GW of solar panels, double the volume imported in 2023 and more than any other country on earth that year. By August 2025, cumulative imports from China had crossed 50 GW, equivalent to the country’s entire conventional generation capacity. What drove this transformation? The answer lies in a collision of economics, crisis, and policy, not strategic planning.
The Economics Became Undeniable
The most powerful accelerant was price. Electricity tariffs rose from roughly Rs16 per unit in 2020 to over Rs48 per unit for many residential consumers by mid-2024, an increase of more than 200 percent in four years, driven by currency devaluation, circular debt, and capacity payments to idle thermal power plants. Meanwhile, the price of Chinese solar panels fell to as low as $0.08 per watt by 2025, compared to $0.23 per watt in 2020. For millions of Pakistani households and businesses, the arithmetic was simple: solar offered electricity at a fraction of the grid tariff. Payback periods for rooftop systems collapsed from eight to ten years to three to five years, making solar a compelling investment even without subsidies.
Pakistan imported 17 GW of solar panels in 2024, more than any other country in the world that year.
Policy Removed the Fiscal Barrier
The government’s May 2022 decision to zero-rate general sales tax on solar panels and associated equipment significantly lowered the cost of entry. Prior to the exemption, taxes and duties added an estimated 17 to 25 percent to the cost of a rooftop system. The combined effect of falling hardware prices and the GST removal compressed system costs dramatically. A 10 kW residential system that cost Rs1.2 to 1.5 million in 2021 could be installed for Rs600,000 to 800,000 by 2023.
Net Metering Gave Consumers a Financial Bridge
NEPRA’s net metering regulations, originally introduced in 2015, gave consumers a mechanism to export surplus electricity to the grid at retail rates. By April 2025, cumulative net-metered solar capacity had reached 5.3 GW, served by 466,000 connections across the country, almost entirely in urban areas. These connections represented consumers who had invested in larger systems partly because the buy-back rate made their investment more financially viable. In February 2026, NEPRA replaced net metering with a net billing framework under the Prosumer Regulations 2026, cutting the buy-back rate from Rs22 to 27 per unit to approximately Rs11 per unit, a policy reversal whose consequences are still unfolding.
The Informal Supply Chain Did the Heavy Lifting
Unlike many countries where solar adoption is managed through centralisedprogrammes, Pakistan’s boom was built on a decentralised, largely informal supply chain. Thousands of small traders, local installers, and neighbourhood distributors spread solar access to consumers that formal retail channels could not reach. This democratised adoption at a speed no government programme could have achieved, though it also created a market with significant quality variation, particularly in battery storage components. The boom is real. The challenge now is managing its consequences for the grid, for distribution companies, and for those consumers who remain dependent on grid electricity they cannot afford to escape.
References
TransitionZero and PRIED, ‘Shedding Light on Pakistan’s Distributed Solar Revolution’ (October 2025) https://www.transitionzero.org/shedding-light-on-pakistans-distributed-solar-revolution accessed 10 April 2026
PV Magazine, ‘Pakistan’s Installed PV Capacity Estimated above 27 GW’ (20 January 2026) https://www.pv-magazine.com/2026/01/20/pakistans-installed-pv-capacity-estimated-above-27-gw/ accessed 10 April 2026
Wikipedia, ‘Solar Power in Pakistan’ (updated 2026) https://en.wikipedia.org/wiki/Solar_power_in_Pakistan accessed 10 April 2026
Renewables First, ‘The Great Solar Rush in Pakistan’ (2024) https://uploads.renewablesfirst.org/The_Great_Solar_Rush_in_-Pakistan_38157451a3.pdf accessed 10 April 2026
REN21, ‘GSR 2025 Snapshot: Pakistan’ (2025) <https://ww w.ren21.net/gsr-2025/snapshots/pk/> accessed 10 April 2026
International Growth Centre, ‘Sustainable Pakistan: Addressing Climate-Driven Demands and Fiscal Challenges for Electricity’ (2024) https://www.theigc.org/publications/sustainable-pakistan-energy-crisis accessed 10 April 2026.
Copyright Business Recorder, 2026
Comments