Pakistan is forecast to reach 27 GW of cumulative rooftop solar PV capacity by 2030, driven primarily by residential and C&I adoption
Utility-scale solar capacity is expected to remain flat over the period, with no government-backed large-scale solar projects currently in the pipeline
The transition from net-metering to net-billing is likely to cause a temporary slowdown in rooftop installations, with market activity expected to resume once regulatory clarity improves and consumers adapt to the new framework
At a time when many developing nations are struggling with fuel shortages triggered by the ‘US-Israel War with Iran’, Pakistan has managed the impact effectively thanks to solar PV electricity generation. Much of the credit goes to Pakistani households and businesses that have rapidly adopted rooftop solar since 2023, easing their individual exposure to inflation and rising energy costs. This transition was not sudden or sporadic, but rather the result of a gradual and sustained shift.
Usman Ahmad, CEO of Nizam Energy Pvt. Ltd., said, “Even though the govt has not been able to supply gas to a fleet of 6600MW of RLNG Plants close to load centers, Solar has provided the cushion during sun hours to avoid power cuts, as solar has helped in heavy lifting daytime loads through rooftop solar (net-metering & behind-the-meter hybrid systems). Of course, none of this would have been possible without the consistent 10 year RE Policy which allowed widespread adoption and provided Tax Free imports until 2025, a Lucrative net metering policy (now revised to net-billing) and subsidized financing to promote solar energy.”
Nizam Energy has completed over 5,000 solar projects and delivered more than 500 MWp of solar power in Pakistan since 2012. The company provides engineering, procurement & construction (EPC), independent power producer (IPP), and power purchase agreement (PPA) services for utility-scale and rooftop solar, and also distributes PV panels, inverters, and battery energy storage system (BESS) solutions.
Pakistan was among the early adopters of solar PV in Asia, commissioning its first 100 MW utility-scale project under the government-owned Quaid-e-Azam Solar Park (QASP) in 2015. Although the project was initially conceived with a target capacity of 1 GW, only 400 MW was ultimately installed, with the remaining capacity canceled due to financial constraints, inadequate grid infrastructure, and challenges related to power system integration. In addition, another 300 MW project has been completed under the IPP program.
Building on this early momentum, an additional 2-3 GW of unsolicited solar projects were later announced and awarded to private developers under fixed-tariff arrangements. However, majority of these projects were either canceled or indefinitely shelved after developers failed to achieve financial close or initiate construction within 2 years of signing their PPAs. In several cases, tariffs were renegotiated, but projects still failed to materialize, reflecting broader macroeconomic and fiscal constraints that limited Pakistan’s ability to sustain large-scale utility solar deployment during this period.
The Government of Pakistan began promoting rooftop solar installations following the initial success of QASP and introduced Net-Metering (NM) in 2015. The National Electric Power Regulatory Authority (NEPRA) formally approved NM Regulations on September 1, 2015. Under NM:
Consumers are allowed to generate rooftop PV electricity
Excess electricity can be sold directly to the grid
NEPRA pays PKR 27/unit for exported electricity (until Dec 2025)
However, early adoption remained largely confined to government buildings because PV systems were still too expensive for C&I and residential consumers. On the other hand, grid electricity was relatively affordable at the time. The situation took a turn for the worse when the country was hit by a double whammy of severe flooding and fuel supply constraints because of the Russia-Ukraine War in 2022.
Pakistan relied entirely on natural gas and hydropower until 2022, a year in which flooding, landslides, and fuel supply constraints stemming from the Russia-Ukraine War severely affected both sources of generation.
According to IEA data, natural gas and hydropower together accounted for 55% of Pakistan’s electricity generation mix at then, with solar contributing a mere 1%.
Pakistan faced a severe economic crisis that same year, prompting the government to implement several measures to stabilize the economy. As part of this effort, the International Monetary Fund (IMF) released $1.1 billion under the Extended Fund Facility (EFF) program. The financial support came with stringent conditions, including significant increases in electricity tariffs across both public and private sectors.
To comply with IMF requirements, NEPRA repeatedly raised electricity prices, with particularly sharp increases for the commercial and industrial (C&I) sector and high-consumption residential users. This was designed to help debt-ridden regional discoms out of financial distress and begin generating revenue.
In contrast, the sharp rise in electricity tariffs acted as a key catalyst for the rapid expansion of rooftop solar PV. Residential and C&I consumers increasingly viewed solar as a cost-competitive alternative to grid electricity. This consumer-led shift was reinforced by supportive government policies and favorable market dynamics that included:
Declining solar module prices
Duty-free PV imports
Availability of net-metering
Given these support factors, residential rooftop PV owners began to become prosumers, selling excess electricity to the grid under NM provisions. PV system owners can now offset their electricity bills and earn extra credit for exported energy. This, in turn, reduced the total PV system payback period to 2-3 years under NM (see Fig. 6), which was terminated at the end of last year, as mentioned above.
With the government’s proposed shift from net metering to a net billing mechanism, the overall payback period will increase by 2-3 years. However, on the positive side, it is highly likely to drive uptake of behind-the-meter energy storage systems.
Pakistan’s C&I sector accounts for nearly 45% of the country’s total electricity consumption, with the textile industry emerging as the dominant energy consumer. According to Pakistan’s Board of Investment, textiles account for 46% of total manufacturing output, employ around 40% of the industrial labor force, while contributing nearly 60% of the nation’s export earnings. Given its high energy intensity and exposure to rising electricity tariffs and load-shedding, the textile sector has been particularly vulnerable to instability in the power sector.
In response, many textile mills have deployed rooftop solar PV systems to reduce their dependence on grid electricity. According to the All Pakistan Textile Mills Association (APTMA), about 60 of 300 textile mills have installed captive ground-mounted and rooftop solar systems, with capacities ranging from 1-10 MW. These mills are now generating solar electricity at PKR 18/kWh, compared with PKR 40/kWh for grid electricity.
This transition has not only mitigated operational risks associated with tariff volatility and supply disruptions but has also lowered effective energy costs, freeing up working capital and improving cost competitiveness across export-oriented manufacturing operations.
Sulaiman ur Rehman, Co-Founder of Energy Accelerate and a Chief Commercial Officer at Fauji Power Vertical, said, “Much of Pakistan’s C&I sector continues to rely on older 300‑watt solar panels, which are significantly less efficient by today’s standards. There is an opportunity to upgrade with higher‑efficiency modules which could substantially improve total energy output without requiring additional rooftop space. At the same time, industries should begin evaluating battery energy storage systems (BESS) to reduce dependence on the grid and build long‑term energy resilience.”
Energy Accelerate provides consulting services in PV plant design, audits, PPA bids, asset sales, and project acquisitions. The company has executed designs for over 1 GW so far, and around the same capacity of PV plant audits.
Off-grid segments in Pakistan have increasingly adopted standalone solar home systems to meet their basic daytime electricity needs, primarily in areas with limited or unreliable grid access. To address challenges of electrification in remote regions, the government, under the regulatory oversight of NEPRA, is also promoting solar-based mini-grid systems. These mini-grids, integrated with battery energy storage, are designed to deliver more reliable and continuous power for household lighting and small appliances. This, in turn, reduces dependence on diesel generators while improving energy access and resilience. According to the 2023 Population Census by Gallup Pakistan, rural areas in Balochistan, Sindh, and Khyber Pakhtunkhwa reported the highest access to solar energy at 31.4%, 20.7%, and 13.2%, respectively.
Pakistan’s agricultural sector has increasingly transitioned toward solar energy, driven primarily by rising fuel costs for irrigation. Traditionally, farmers relied on diesel-powered generators to operate water pumps across farmlands. However, this model became economically unviable with a sharp rise in diesel prices.
This steep escalation significantly increased irrigation costs, prompting a structural shift toward solar water pumps as a lower-cost, price-stable alternative. As a result, solar-powered irrigation systems have seen widespread adoption, particularly across key agricultural provinces such as Punjab, Sindh, and Balochistan, where farming operations are highly sensitive to energy input costs. According to 2025 industry estimates, around 650,000 solar-powered tube wells are in use, out of roughly 1.35 million tube wells in Pakistan. However, many of these systems are not operating at full capacity. Their usage is often seasonal, and they remain partly dependent on diesel for backup and night-time operation, since battery storage is still too expensive for most of the agriculture sector.
Pakistan’s rooftop PV capacity is forecast to grow at an approximate compound annual growth rate (CAGR) of 43% between 2022 and 2030, reflecting strong but gradually moderating growth as the market matures. The future of PV installations in the country will be entirely dependent on consumer sentiment, mainly driven by residential and C&I segments.
Residential PV installations will continue to dominate the market, accounting for 70% of new capacity additions, followed by the C&I segment and off-grid markets, including the agricultural sector. However, residential installations are likely to experience a temporary slowdown of 2 to 3 months due to NEPRA’s decision to transition from net metering to a net billing (NB) framework, which was announced on February 9, 2026. Under the NB mechanism, residential consumers will receive only PKR 11 per unit for excess electricity exported to the grid, compared to PKR 25 per unit under NM. This sharp reduction is expected to extend payback periods for rooftop PV system owners by 3 to 5 years. That said, once regulatory clarity improves, residential installations are expected to regain momentum.
Meanwhile, off-grid solar installations are projected to continue at a steady pace, supported by the government’s rural solar electrification programs. In the agricultural sector, adoption is expected to remain strong as farmers increasingly deploy solar-powered water pumps to lower operating costs and reduce exposure to volatile fuel prices.
Pakistan has seen the demand for battery storage accelerate in recent years, primarily as a market response to persistent grid instability and sharply rising electricity tariffs. Frequent outages, voltage fluctuations, and punitive peak-hour pricing have pushed both households and commercial users to adopt storage solutions as a cost-mitigation and reliability tool rather than a discretionary add-on.
Nizam Energy CEO Ahmed said, “Pakistan is at an inflection point where widespread adoption of Storage is just starting at the residential level, and consumers are choosing energy storage inverters and Lithium batteries, the flywheel seems to have been kickstarted because of the war in the middle east with customers choosing Storage as a preventive reaction in case of power cuts increase. For middle income people in Pakistan who had net metering, 16KWh Batteries are becoming the go to battery coupled with Hybrid Inverters.”
As per Pakistan’s import data, the country imported $214 million worth of Lithium-Ion batteries in between January 2025 to February 2026. Imports rose sharply through H1 2025, climbing from about $3 million in January to a peak of $27 million in June, indicating rapid adoption and stocking. This was followed by a mid‑year correction from July to October as earlier imports were getting installed. Imports rebounded strongly at year‑end, reaching about $23 million in December, before stabilizing at elevated levels around $16–18 million in early 2026.
Overall, the data shows strong but volatile growth, suggesting lithium‑ion batteries have moved into the mainstream in Pakistan, with demand increasingly tied to steady deployment rather than one‑off spikes. In most cases, batteries are deployed in conjunction with rooftop solar systems, enabling consumers to store surplus daytime generation instead of exporting it at low compensation rates or curtailing it altogether. Stored energy is then utilized during evening and nighttime peak hours, when grid electricity is both more expensive and less reliable. This behind-the-meter flexibility not only improves the economics of rooftop solar systems but also lowers peak-load dependence on the grid, helping moderate localized overloading and distribution-level stress.
While Pakistan possesses a mature base of technical expertise, project development experience, and a well-established private sector across the solar value chain, the key structural bottleneck remains the absence of long-term, future-proof energy planning. Over the past 5 years, policy focus has largely been reactive and short-term, with limited progress in new utility-scale solar capacity and insufficient coordination between generation planning, grid development, and regulatory approvals.
To unlock sustained growth, the government needs to articulate a clear 10-15-year roadmap that integrates generation targets with grid expansion, evacuation infrastructure, and streamlined approval mechanisms. Mandating solar-plus-storage readiness for new commercial, industrial, and residential constructions would not only future-proof demand growth but also reduce pressure on an already overstretched grid.
Crucially, before announcing additional large-scale solar tenders, priority must be given to upgrading transmission and distribution infrastructure, strengthening evacuation capacity, and modernizing grid operations. Demonstrating execution capability in these areas is essential for restoring investor confidence and attracting international developers and financiers back into Pakistan’s utility-scale segment.
In parallel, for regions with limited or no grid access, the accelerated deployment of solar-powered microgrids integrated with battery storage should form a central pillar of the national electrification strategy. Such systems can deliver reliable power at lower long-term cost, reduce reliance on diesel generation, and extend electricity access in a fiscally sustainable manner.