Masood Khalid Khan
Pakistan’s solar power sector is expanding at a remarkable pace, but experts are warning that this growth is creating new economic and technical challenges that the country is not yet prepared to handle. While rooftop and small scale solar systems have helped many households and businesses reduce electricity bills, the wider impact on the national grid, industry, and social equity is becoming increasingly complex.
A Chinese energy expert, Prof Dr Yixian Sun from the University of Bath in the United Kingdom, has cautioned that the rapid rise of decentralized solar power in Pakistan is placing extra pressure on the electricity system. He warned that as more affluent consumers shift to solar, the fixed costs of the power sector are increasingly pushed onto those who cannot afford solar installations. This, he said, risks deepening inequality in energy access and raising tariffs for lower income consumers who remain dependent on the grid.
Prof Sun made these remarks at the launch of a policy report titled “From Solar Boom to Green Industrialization: Policy Pathways to Localizing Solar Value Chains in Pakistan.” The report was released by the Sustainable Development Policy Institute in collaboration with the University of Bath. He noted that Pakistan has spent more than ten billion dollars on importing solar equipment, yet has failed to capture meaningful industrial or economic benefits from this spending. In his view, the country has become a consumer of solar technology rather than a producer.
He contrasted Pakistan’s experience with global trends, particularly in China and Southeast Asia. Over the past three years, Chinese firms have invested more than two hundred billion dollars in solar manufacturing facilities outside China, especially in countries like Vietnam, Malaysia, and Thailand. Pakistan, despite its large domestic market and low labour costs, has attracted almost none of this investment. Prof Sun argued that with the right policies and political commitment, Pakistan could become a competitive hub for clean energy manufacturing rather than remaining dependent on imports.
Dr Khalid Waleed, a research fellow and energy economy expert at SDPI, said the findings of the report are closely aligned with Pakistan’s broader economic reform goals. He pointed out that Pakistan has imported between two and three billion dollars worth of solar panels, equivalent to around twenty two to thirty gigawatts of capacity. At the same time, the country has taken on about nine billion dollars in Chinese financing for large coal based power plants. This contrast, he said, highlights the lack of coherent long term planning in the energy sector.
Dr Waleed emphasized that localizing the solar value chain does not mean starting from scratch. Instead, it requires smart value addition, targeted incentives, and partnerships with countries that already have advanced manufacturing ecosystems. He also stressed the importance of planning for the recycling of solar panels, which will become a major issue in the coming years. Joint ventures with Chinese firms, he suggested, could help Pakistan develop recycling capacity while also creating new jobs and skills.
Dr Hina Aslam, a visiting fellow at SDPI, described the report as timely and necessary. She noted that most discussions around solar energy in Pakistan focus on generation and tariffs, while the economic and industrial dimensions are largely ignored. She explained that global clean energy supply chains are currently being diversified as countries seek to reduce dependence on single sources. Pakistan, she argued, can take advantage of this shift to train its youth, build domestic industries, and reduce reliance on imported technologies through inclusive and forward looking policies.
The report also presented a detailed set of policy recommendations aimed at turning Pakistan’s solar boom into a foundation for green industrialization. Faisal Sharif, a doctoral candidate at the University of Bath, introduced what he called a “5S Roadmap” for solar photovoltaic manufacturing. This framework proposes developing a clear national strategy, setting up a dedicated solar industrialization task force, adopting a stable ten year policy framework, creating domestic demand through customized solutions, and targeting export oriented market niches over time.
Sharif stressed that policy stability is essential for attracting serious investors. He called for rationalizing tariffs, harmonizing sales taxes, and using blended finance tools to reduce risk for manufacturers. He also highlighted the need for local content requirements, strong standards and certification systems, and the establishment of solar manufacturing clusters within Special Economic Zones under the second phase of the China Pakistan Economic Corridor.
Engineer Ubaid Ur Rehman Zia, head of the energy unit at SDPI, pointed out that Pakistan has seen an unprecedented surge in solar installations, largely driven by residential and commercial net metering. According to him, the country has already imported solar equipment equivalent to nearly fifty gigawatts, far more than the officially installed grid connected capacity. While this solarisation has reduced electricity costs for many users, it has failed to generate significant local industrial development or skilled human resources.
Zia warned that without a clear industrial strategy, Pakistan risks repeating past mistakes where large scale imports solve short term problems but create long term dependencies. He argued that energy transition should be used as an opportunity to build domestic capability, not just as a way to reduce bills.
Aftab Khan from the Ministry of Industries and Production raised concerns about Pakistan’s current technological readiness. He stressed the need to clearly identify priority areas for localization based on market demand, efficiency, and industrial feasibility. Without such clarity, he warned, efforts to indigenize solar manufacturing could remain fragmented and ineffective.
Dr Hassan Daud Butt, senior advisor to China Energy Engineering Group, echoed concerns about weak long term planning. He said uncontrolled solar imports are beginning to affect grid stability and called for a clear roadmap for Green Special Economic Zones under a reformed CPEC framework. According to him, Pakistan must move beyond reactive policies and adopt a structured approach if it wants to turn its solar boom into sustainable economic growth.
Together, the experts agreed on one central point. Solar energy offers Pakistan a historic opportunity, but only if it is backed by industrial policy, planning, and institutional reform. Without these, the solar boom may reduce bills for some today, while creating higher costs, deeper inequalities, and missed economic opportunities tomorrow.
