Solar energy sector: CCP flags gaps, inefficiencies hindering investment

ISLAMABAD: In a significant policy intervention, the Competition Commission of Pakistan (CCP) has flagged deep-rooted structural inefficiencies, regulatory gaps, and infrastructure constraints that are holding back investment and competition in Pakistan’s solar energy sector despite the country’s vast untapped potential.

In a study titled “Unlocking Green Potential: A Market Competition Study of Solar Energy in Pakistan,” the Commission has revealed that solar energy contributes a mere 2 percent (1,487 GWh) to Pakistan’s total electricity generation of 128,854 GWh in 2024–25, remaining the smallest component in the national energy mix.

The report underscores that outdated grid infrastructure, delays in power market reforms, weak quality enforcement, and limited scale of utility projects are collectively restricting solar’s growth, while also raising concerns over the system’s inability to integrate distributed generation efficiently.

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Calling for urgent and targeted reforms, the CCP has proposed a comprehensive set of measures ranging from grid modernization and smart metering to fast-tracking competitive electricity markets and promoting domestic manufacturing, aimed at unlocking investment, lowering costs, and fostering a more competitive and sustainable energy landscape.

The CCP released the study on Monday proposing targeted reforms to remove entry barriers, enhance market transparency, and accelerate investment in the solar sector.

Despite Pakistan’s significant solar potential, the study reveals that solar energy continues to play a marginal role in the country’s power mix. During 2024–25, Pakistan generated a total of 128,854 GWh of electricity, of which solar accounted for only 2 percent (1,487 GWh), making it the smallest contributor. In contrast, thermal power dominated the mix with 46 percent, followed by hydel at 31 percent and nuclear energy at 17.4 percent, while other renewable such as wind and biomass contributed just 3.5 percent.

Copyright Business Recorder, 2026