SDPI holds dialogue: Regulatory sandbox to reform power sector subsidy regime proposed

ISLAMABAD: Experts proposed a regulatory sandbox to reform the power sector subsidy regime through solar integration in residential solar solutions, featuring rationalized tariff structures and social protection mechanisms. This approach could unlock a more sustainable, equitable, and efficient power sector for the country.

Experts said while speaking at a policy dialogue held here on Wednesday. The dialogue was held on the occasion of the launching of a study titled “Redefining Power Sector Economics: A Regulatory Sandbox for Residential Solar and Industrial Grid Integration” by the Sustainable Development Policy Institute (SDPI).

The initiative aims at reshaping Pakistan’s power sector by introducing a practical framework for integrating rooftop solar energy while rationalizing subsidies to ensure both social protection and industrial competitiveness. Moderating the session, Zainab Babar, Research Associate at the SDPI, said that Pakistan’s power sector is under significant fiscal and operational strain. The current Tariff Differential Subsidy (TDS) mechanism, originally designed to help low-income households, has become a fiscal burden, misallocating resources.

Copyright Business Recorder, 2025