Pakistan’s solar rush unlocked $17-19bn in private investment in 8 years: study

Pakistan’s solar rush has unlocked $17-19 billion in private investment between FY17 and FY25, driven by household savings, rooftop systems, and the expansion of EPC (Engineering, Procurement, and Construction) and installation services, according to a study released on Friday.

In FY25 alone, solar mobilised $5-6 billion, emerging as one of the Pakistan’s strongest channels of private capital, the study ‘The Many Dividends of Solar Rush in Pakistan’, launched by think tank Renewable First said.

“This surge in activity has generated 300,000 direct and 200,000 indirect jobs, strengthening service industries, supply chains, and rural electrification efforts,” the study stated.

It highlighted that the mass-scale adoption of solar photovoltaic (PV) was not only reducing fossil dependence and easing grid strain but also mobilising private capital, creating jobs, and cutting emissions at scale.

Pakistan’s solar surge lifts it into rarefied 25% club

As Pakistan grapples with mounting climate risks, including the recent devastating monsoon floods, distributed solar continues to deliver one of the country’s strongest mitigation outcomes.

“In FY25, solar PV avoided an estimated 35 million MtCO₂-eq, pushing cumulative avoided emissions since FY17 to over 83 million MtCO₂-eq.”

At the current trajectory, Pakistan could avoid 50 million MtCO₂-eq annually by FY30, avoiding more emissions than the total currently produced by the country’s entire power sector, according to the study.

Pakistan’s rapid solar uptake has positioned it as the second-largest global importer of Chinese solar panels in FY25, bringing in 17.9GW, with cumulative imports surpassing 50GW, as per the stats given by the study.

Households, farms, and industries are increasingly shifting to solar as “it makes financial sense because of rising grid tariffs and expensive imported fuels”.

“Amid Pakistan’s worsening economic and employment challenges, the country’s solar rush is delivering clear cross-sectoral dividends, from declining thermal reliance to new economic activity and the creation of much-needed jobs,” noted Muhammad Sheraz, Energy Analyst at Renewables First.

“These outcomes are not only transforming the energy sector but also laying the foundation for substantial economic growth.”

With the deployment of an estimated 32GW of solar PV, the report found that Pakistan could potentially generate 42TWh of distributed electricity annually, equivalent to 38% of current grid sales.

This rapid growth in behind-the-meter generation is eroding the role of conventional power plants.

Imported coal has seen the sharpest decline, the study mentioned, with utilisation falling from 78% to just 11% between FY22 and FY24.

“RLNG plants have dropped from 51% to 31%, while local coal has eased from 81% to 70%. With RLNG cargoes for FY26–27 already cancelled and coal imports continuing to fall, these trends suggest a deep and structural shift in Pakistan’s fossil energy demand, driven not by policy mandates, but by the momentum of consumer-led solar adoption.”

BR RESEARCH: Solar imports slow, momentum will hold

The study suggested to align Pakistan’s power sector policies with the fast-growing reality of distributed energy resources. This included modernising grid and resource planning, undertaking tariff and market reforms suited to declining grid consumption, clarifying policies for distributed generation, storage, and flexible resources, and updating regulatory frameworks to enable a decentralised, consumer-driven energy future.

“Policies and planning frameworks must now keep pace with this shift to ensure the system is prepared for a rapidly changing energy landscape,” Sheraz noted.