Turning solar boom into a shared resource

Imagine a small mud house in Sindh’s Tharparkar. Imagine now a mother switching on a single light after sunset, prodding children for the umpteenth time to finish homework promptly, since the battery storing the power won’t last through the night.

Some 1,432 kilometres away, towards the northeast of Tharparkar, is Islamabad, where families have a very different experience of power - both real and electric! Many households in the capital have their rooftops lined with solar panels. On hot sunny afternoons, they likely produce more electricity than a family needs. This surplus electricity goes unused, even when another family living just a few metres away may be struggling to pay its electricity bill since it cannot afford solar panels of its own.

These two situations are at the heart of a just and equitable energy transition in Pakistan, especially in relation to the solar boom experienced in recent years. Some households have too little electricity; others produce more than needed. The question, then, is what to do with the surplus electricity? Given the energy poverty prevailing in the country, it would make sense to channel and share all that surplus with those who need it.

In 2024, Policy Research Institute for Equitable Development (PRIED) estimated Pakistan’s rooftop solar capacity at around 33 gigawatts (GW), while recent estimates from Renewables First put distributed solar capacity at around 38GW, with approximately 8GW officially registered under net metering. This means that more than 78% of the country’s rooftop solar capacity is outside the net-metering system. People simply installed solar panels and started using them because electricity from the grid became prohibitively expensive.

In 2015, one unit of grid electricity cost around Rs9. By 2024, it had increased to more than Rs42 per unit. As electricity prices kept rising, solar became a cheaper option for many households. In simple terms, people did not switch to solar because it was extremely cheap. They switched because they needed something that cost less than grid electricity.

Solarisation’s urban context

This self-financed solar boom is now creating new challenges for DISCOs (power distribution companies) and for people who cannot afford solar. During sunny hours, many homes generate more electricity than they need, and this surplus is pushed onto a grid that was not designed for power to flow in both directions. The wires and protection equipment built to carry electricity from the power station to the home are now being asked to carry it back again. Then, as soon as the sun sets, these same solar homes switch back to the grid, and demand rises sharply. DISCOs still have to meet their fixed costs even when they sell less electricity. As a result, the cost burden often falls on households that cannot afford to install solar.

Cities need a different solution because they face a different problem. In a place like Islamabad, most homes are already connected to the grid. The challenge is not access; it is coordination. What cities need is a way to bring thousands of small, scattered rooftop systems and batteries together so that, instead of behaving like thousands of unpredictable little power sources, they can act collectively like one large, well-managed power plant. This is known as a virtual power plant, or VPP.

This is already working elsewhere and at real scale. In the UK, a company called Octopus Energy runs a platform called Kraken that manages more than 2 gigawatts of flexible power from over 500,000 connected devices, including at least 1 gigawatt drawn from electric cars alone. Through a tariff called Intelligent Octopus Go, the system charges batteries and electric cars when the grid tariff is low and the network has surplus generation, at a price of about £0.08 per unit. This brings the cost of driving an electric car down to roughly £0.02 a mile.

The same rooftop solar and batteries that are putting pressure on Pakistan’s grid are treated in the UK as a resource that the grid can pay to use. Technology is not the problem. What is missing is a system that can see these scattered sources of power, coordinate them and reward households for making them available.

The rural context

In Pakistan’s poorer and more remote villages, the problem looks different. Here, families often own only a small solar panel and a small battery, enough to run a fan and a light or two. On any given day, one household’s panel may be producing a little more electricity than it needs, while the neighbour’s battery has already run dry.

If these small systems could be connected to one another, the spare power from one home could travel next door instead of being wasted or pushed back onto the grid. This is called a swarm grid. It grows from the ground up, house by house, rather than being built from the top down like a conventional power station. In the desert villages of Tharparkar, where our own field survey was carried out, some neighbours are already sharing electricity informally, and about half the households said they would be willing to formally join such a network, especially if it could also become a small source of income.

This idea has already been put to the test elsewhere to reduce energy poverty. In Bangladesh, a company called SOLshare provides electricity to more than 80,000 people through 120 peer-to-peer microgrids. Smart meters automatically send extra solar electricity from one building to another when it is needed, while people can pay for the electricity using mobile money. The system has since grown into a larger energy-sharing network that includes peer-to-peer electricity trading, electric rickshaw battery leasing and rooftop solar for small businesses such as tuck shops. By using extra solar power instead of wasting it, the system has helped reduce local emissions by up to 30%. It has also increased the income of participating households, small businesses and electric rickshaw drivers by up to 25%.

A VPP and a swarm grid also make better financial sense for everyone than the current arrangement in Pakistan. Under the country’s net-billing rules today, a solar household that sends its surplus back to the grid earns only about Rs11 to 13 a unit, while a household without solar can pay as much as Rs40 to 55 a unit once it crosses into the higher tariff slabs. A swarm grid sits between these two extremes. A solar household could sell its spare electricity directly to a neighbour for close to Rs20 a unit, nearly double what the grid pays, while the neighbour would still pay less than half of what the grid would otherwise charge. Both sides benefit, without any institution having to subsidise the difference.

Even the distribution companies, so often blamed for Pakistan’s power troubles, stand to gain from both approaches. A VPP and a swarm grid would allow surplus solar to be used locally first, before it is pushed back onto a network that was never built to carry power in two directions. This would ease the pressure that currently trips protection equipment and damages transformers. A virtual power plant would also give utilities a way to smooth out the sharp rise and fall in demand that solar has created, in much the same way Octopus does in the UK, rather than leaving them to be caught off guard every evening.

Handled properly, rooftop solar does not have to be a threat to the distribution companies. It can become a resource they can actually use.

This will not happen by itself. Pakistan needs clear rules from the energy regulator, NEPRA, that allow people to legally share or sell their extra electricity to their neighbours. At the same time, distribution companies need to see rooftop solar as part of the solution rather than as a problem.

The technology is already available. People are already interested in using solar energy. Pakistani households have taken the most important first step by installing solar panels on rooftops across the country. The next step is to connect these systems in a simple and well-managed way, allowing a family in Tharparkar to use some of its neighbour’s extra battery power when needed, while a house in Islamabad could share its extra afternoon solar energy instead of letting it go to waste.

This is the kind of future Pakistan can build by making better use of the solar energy it already has: not a system in which those who can afford solar retreat from the grid while everyone else is left to bear its rising costs, but one in which the electricity being generated across the country can be shared, coordinated and put to use.

The article does not necessarily reflect the opinion of Business Recorder or its owners.