Pakistan has emerged as the sixth-largest solar market globally, according to a World Economic Forum (WEF) report, which highlights the country’s rapid adoption of solar energy as a model for other emerging markets. This shift is driven by declining solar panel costs, surging electricity tariffs, and a pressing need to tackle its energy crisis through renewable resources.
The report emphasizes that Pakistan’s energy sector has long struggled with challenges such as circular debt, power theft, and transmission losses, leading to frequent blackouts and skyrocketing electricity costs. However, with abundant sunlight—over nine hours daily in most regions—the country is well-positioned to capitalize on solar energy. The World Bank estimates that just 0.071% of Pakistan’s land area could generate enough solar photovoltaic (PV) power to meet its electricity needs.
Currently, only 5.4% of Pakistan’s installed power generation capacity of 39,772 megawatts comes from renewables such as wind, solar, and biomass, while fossil fuels still account for 63% of the energy mix. Hydropower contributes 25%.
The WEF report attributes Pakistan’s rapid solar adoption to external factors like China’s overproduction of solar panels, which has significantly reduced costs. This has made Pakistan the third-largest importer of Chinese solar exports.
“Industrial, agricultural, and residential sectors have embraced solar power,” the report noted, with imports of Chinese solar modules reaching 13 gigawatts (GW) in the first half of 2024 and forecasts suggesting 22GW by the end of the year.
The inconsistent energy policies of state-owned providers and inefficiencies in production, pricing, and regulation have also played a role in accelerating the shift to solar. The report revealed that grid electricity demand dropped by over 10% in the last fiscal year as rising tariffs pushed consumers toward self-generation through solar power.
To further boost renewable energy adoption, the WEF recommended policies such as offering credit for solar systems in off-grid areas and revising customer categories to encourage widespread usage.
“Pakistan’s journey highlights the critical role of balancing policy innovation with market adaptation to achieve sustainable and equitable energy solutions,” the report concluded, underscoring the country’s potential to inspire similar transitions in other emerging markets.
