SOLAR SURGE RESHAPES PAKISTAN’S POWER SECTOR: REPORT
KARACHI: The Pakistan Electricity Review (PER) 2025 was launched on Saturday, offering a detailed analysis of the country’s power sector during fiscal year 2024 (FY24), highlighting trends, decisions, and disruptions that defined a pivotal year.
Renewables First presented the review, focusing on falling demand, rising capacity payments, and an overstretched, inefficient grid.
Despite structural challenges such as outdated planning and mounting circular debt, 2024 was notable for the rapid rise of rooftop solar. A record 16 GW of solar PV imports from China enabled households and industries to install thousands of systems, seeking cost relief and more reliable power.
As of March 2025, 4.9 GW of net-metered solar capacity had been installed, excluding behind-the-meter setups. This quiet revolution is driven not by government policy but by consumers taking control of their energy.
Rabia Babar, Manager Data – Energy and Climate at Renewables First, remarked, “Consumers are telling us something loud and clear: the system is not working for them, so they are building their own.”
However, increased solar adoption is straining the national grid. Transmission bottlenecks, especially from southern generation zones to northern demand centres, have forced reliance on expensive RLNG plants, pushing energy purchase costs to Rs1.3 trillion, with RLNG alone accounting for Rs568 billion — over 50% of the total.
Capacity payments — fixed payments to keep power plants operational regardless of electricity consumption — continue to rise, increasing by 29% in FY23 and 46% in FY24, reaching Rs1.9 trillion. The primary driver is underutilised generation capacity, particularly from newly commissioned coal and RLNG plants. Learn more at Renewables First insights.
Experts emphasized that while bottom-up consumer adoption is promising, it must be complemented with robust top-down planning. Dr Dinita from Ember Asia highlighted Pakistan’s unmatched pace of solar PV adoption compared to regional peers like Thailand and Vietnam.
Ernst Kuneman from Agora Energiewende noted that strategically deployed distributed energy resources (DERs) can defer costly grid investments, reduce peak demand, and ease congestion.
The review underscores that Pakistan’s electricity sector remains under pressure, but change is underway. Households and industries are shifting energy behaviours, exposing cracks in the old system. FY24 may not have fixed the sector, but it made clear that transformation is already happening. Additional insights can be found at Renewables First coverage.