Solar panels now glimmer across Pakistan, from the urban rooftops in Lahore to neighbourhood homes in Karachi. This momentum is remarkable: Affording citizens, weary of rising bills and endless outages to invest in their own energy independence, leading to a fragmented grid.
As of 2025, solar energy accounts for over a quarter of national electricity generation, a meteoric rise driven by plunging panel prices and surging tariffs on the grid. If the country stops here, it risks creating a fractured energy system - one where the wealthy exit the grid, the poor are left behind, and the national network itself teeters on financial collapse. The question before us is not whether Pakistan will embrace solar - it already has. The question is whether the country will craft an energy policy that is stable, fair, and enduring.
The backbone of this challenge lies in how we value solar power exported to the grid. Pakistan’s net-metering system was the catalyst of this rooftop surge, compensating households at retail rates for every unit exported. This policy, once an accelerator, is becoming a distortion. Non-solar consumers — often lower-income — are left paying higher tariffs as grid costs shift onto them, an imbalance that amounted to nearly PKR 200 billion in FY2023-24. Internationally, regulators have acknowledged this risk and pivoted.
Poland, California (one of US states), Italy, and Mexico have all introduced net-billing models, compensating exports at wholesale or avoided-cost rates rather than retail prices. Pakistan must follow suit. A transparent, time-bound transition — over two to three years — would maintain consumer confidence while ensuring that subsidies do not convert into permanent inequities.
The technical strains of rapid rooftop adoption are already visible: reverse power flows, voltage instability, and distribution companies struggling to manage two-way currents. Without intervention, what empowers households risks destabilising the grid. The solution is not to halt rooftop solar, but to re-engineer its relationship with the network. Here, global best practice points to smart inverters.
Germany, for example, requires them as standard, ensuring that distributed generation communicates with and stabilises the grid (Fraunhofer ISE). Australia has adopted similar mandates, turning rooftop systems into allies rather than adversaries (Australian Energy Market Operator). Pakistan should not lag behind. Smart inverters are the digital diplomats of the energy world — able to regulate voltage, provide reactive power, and cooperate with grid operators rather than overwhelm them.
The second lever is storage. Without batteries, solar is a feast followed by famine — abundant at midday, scarce at dusk. Grid operators worldwide know this as the “duck curve”: steep troughs in midday demand followed by steep peaks in the evening. Left unchecked, the duck’s neck threatens to snap grid reliability. The obvious fix is to flatten it with batteries, which capture excess solar generation when it is plentiful and release it when demand surges. Incentives are critical. In the United States, in states such as California and New York, they offer rebates or low-interest loans for residential batteries. In Germany, commercial and industrial facilities receive tax credits for storage installations.
Pakistan should adopt a mix of these instruments — rebates for households, concessional finance for businesses — to accelerate uptake. In this sense, batteries are a form of energy time travel, shifting electrons from when they are abundant to when they are most needed.
Pricing reform is the third pillar. Today’s tariff structure is like a taxi meter stuck on one rate, whether it is rush hour or a silent 2 a.m. It ignores the reality that electricity costs more at certain times and less at others. Time-of-day pricing models, already tested in South Korea, Japan, and parts of Europe, fix this by aligning tariffs with system costs (IEA — Time-of-Use Tariffs). Cheaper rates during midday solar surpluses and higher rates during evening peaks encourage consumers to adjust behaviour, run appliances, or charge batteries when electricity is plentiful, and conserve when it is expensive. Price, in this sense, becomes the most honest teacher, nudging consumption patterns into alignment with the realities of supply.
Equity must anchor all reforms, for policy without equity lacks legitimacy. Lifeline tariffs, targeted subsidies, and progressive charges for solar adopters are key correctives. For industry, differentiated tariffs ensure that those who benefit most from self-generation also share fairly in the grid’s fixed costs. Like a public road, all must contribute to upkeep—but the heavy lorry carries more responsibility than the bicycle. Fairness here is structural justice, not charity.
Over the next one to three years, it could be useful to steadily adjust export rates, broaden the reach of digital metering, and introduce equity measures to ensure inclusivity. In the immediate term, regulators may wish to outline a transition pathway to net-billing, pilot time-of-day tariffs, and encourage the adoption of smart inverter standards.
This is not policy in isolation, it is energy choreography. Each step must be deliberate, synchronised, and carefully communicated to avoid both consumer backlash and grid instability. Just as in a well-rehearsed performance, timing matters as much as the sequence itself. Sudden or poorly explained shifts risk eroding public trust, while fragmented execution could strain an already fragile power system.
Effective energy choreography therefore requires regulators, utilities, and consumers to move in harmony, where technical reforms, pricing adjustments, and public awareness campaigns are introduced in tandem, reinforcing rather than undermining one another.
Copyright Business Recorder, 2025
The writer is a well-known columnist