Solar power, increasingly coupled with batteries, is a key element of the energy transition for countries including Pakistan.

Image: Unsplash/Markus Spiske

For years, and especially during the 2022-23 energy crisis, Pakistan has struggled with chronic power shortages and soaring electricity costs as heavy reliance on imported coal and gas leaves it exposed to global price shocks. In response, residential, commercial and industrial consumers are increasingly turning to decentralized energy solutions, most notably rooftop solar combined with battery energy storage systems.

In 2024, Pakistan imported 17 gigawatts (GW) of solar photovoltaic (PV). The country also imported an estimated 1.25 gigawatt-hours (GWh) of lithium-ion battery packs in 2024. These are substantial additions to an energy system with approximately 40 GW of total installed capacity. If this trend continues, total battery imports could reach 8.75 GWh by 2030. This would be enough to meet over a quarter of peak demand, while solar could cover most daytime electricity needs.

This surge in solar and batteries is driving down energy costs and improving reliability for individual users in Pakistan. By reducing dependence on imported fuels like LNG, it is easing pressure on Pakistan’s balance of payments and strengthening the country’s energy sovereignty.

This revolution is redefining energy access and the country’s future from the ground up. And while it is also creating new challenges for the grid and overall system resilience, Pakistan's handling of this shift offers valuable lessons for other emerging economies navigating their own energy transitions.

Grid versus off-grid energy divide

The rapid, uncoordinated growth of distributed energy and a lack of system-level planning and integration is raising critical questions for Pakistan's national grid.

One of the biggest challenges is ensuring fairness in how costs are shared. Many households and small businesses, especially those in flats or small dwellings, cannot install rooftop solar or afford batteries. As other users reduce their reliance on the grid using these methods, the utility’s fixed costs for maintaining generation and transmission are spread across a shrinking pool of customers.

At the same time, legacy gas and coal plants continue to be remunerated even when underutilized due to "take-or-pay" agreements that impose penalties if a minimum amount of power is not purchased. Pakistan’s National Electric Power Regulatory Authority (NEPRA) reports that capacity payments to power plants exceeded PKR2 trillion (Pakistani rupee) or $7 billion in 2024. These costs must be recovered through higher tariffs on fewer ratepayers regardless of actual usage.

Without regulatory reform such as redesigning tariffs or planning for flexible grid infrastructure, Pakistan could see a widening energy divide. On one side, a growing class of energy “prosumers” would enjoy more reliable, low-cost power off-grid, while those still tied to the grid would be left paying ever-higher costs for a legacy system.

Affordable energy for all Grid versus off-grid energy divide

Blended finance, which uses public or philanthropic funds to help unlock private investment, could play a key role here. Low-interest credit lines for rooftop solar and batteries, as well as guarantees to de-risk lending, could make solar-plus-battery energy solutions more accessible.

Pakistan will also need to expand utility scale solar to complement rooftop and distributed systems. While this may reduce the use of existing thermal plants even further, such projects are essential to meet growing demand and drive the transition.

Ultimately, financing must go beyond what works for early adopters. Creating mechanisms that make clean, reliable power accessible to all will ensure Pakistan’s rapid shift to solar and storage strengthens the entire power system.

Lessons for other emerging economies

The factors driving Pakistan’s solar and battery boom are not unique to the country. Many other developing economies face the same pressures of high power prices, unreliable electricity and gaps in energy access. They can also benefit from the rapid drop in the cost of solar panels and, more recently, batteries.

Pakistan’s experience is an important case study for other emerging economies. Five key recommendations include:

• Make the energy transition inclusive

• Integrate distributed energy into the system

Encourage sharing, trading and coordinated use of power from small, decentralized installations so surplus energy is not wasted and the whole grid benefits. Incentivize battery charging and discharge when it makes sense for the system.

• Include legacy assets

• Incorporate the mobility sector

• Plan ahead for scale

For many emerging markets, the question is no longer if the energy transition will happen, but how to manage it. With the right planning and smarter financing instruments, countries can turn a rocky, uneven shift to clean power into a coordinated pathway towards affordable, reliable and low-carbon energy for all.

Source：World Economic Forum  How Pakistan’s energy revolution can power affordable, reliable electricity for all

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