Pakistan’s solar boom and the challenge for the grid ^{CEFR B2}

Since 2023 Pakistan has faced repeated, severe heatwaves that have put intense pressure on the national electricity grid. Rising tariffs and frequent outages have prompted households and small businesses to adopt rooftop and small-scale solar as a more reliable option, while the arrival of cheap Chinese equipment has accelerated that shift.

In the 2024 fiscal year Pakistan imported 16 gigawatts of solar panels from China, more than triple the 4.9 GW imported the year before. By mid-2025 cumulative imports reached roughly 36 GW, a volume that now represents about three-quarters of Pakistan’s installed power-generation capacity and makes distributed solar one of the fastest-growing sources in the country.

China’s long-standing role via the China–Pakistan Economic Corridor has produced a dual legacy: Chinese coal projects helped address short-term shortages but increased carbon dependence and pollution, while Chinese solar exports have enabled a fast rooftop rollout. Of 21 CPEC energy projects, eight are coal-fired, and officials have started to brand new plans as "Green CPEC."

The solar expansion raises policy and financial challenges. Pakistan lacks domestic panel manufacturing, increasing import dependence and exposure to currency depreciation. A 10 percent tax on panels in 2024 aimed to protect grid revenue but did not curb demand. Officials report a large jump in net-metering output, yet many solar households still rely on the grid for evening and cloudy-month power, so revenue impacts remain uncertain.

A second wave of Chinese lithium batteries is arriving: exports to Pakistan in the first half of 2025 were about 68 percent higher than shipments during all of 2024. Batteries let families store night power, but poorer households often cannot afford systems without targeted financing. Pakistan also has no national standards for battery installation, storage or fire safety, and no clear policy for e-waste or for integrating many small systems into the grid. China faces a strategic choice between continuing high-volume equipment exports and project financing or supporting measures such as restructuring legacy coal contracts, backing local manufacturing, designing regionally integrated grids and expanding concessional climate finance to reduce fiscal pressure and dependency.