Arshad Mahmood Awan

Pakistan’s energy sector is undergoing a significant shift, with solar power emerging as a pivotal solution to the country’s growing energy challenges. This transition offers a unique opportunity to enhance energy security, reduce reliance on fossil fuels, and build a more sustainable and resilient energy infrastructure. However, despite the promising potential of solar energy, Pakistan continues to face significant hurdles. The country remains heavily dependent on imported solar technology, leading to high costs and vulnerabilities in its supply chain. To address these issues, the development of local solar manufacturing capabilities has become a top priority. This article delves into Pakistan’s readiness for solar indigenization, the opportunities it presents, and the challenges that must be overcome for a successful transition to a self-reliant solar sector.

Pakistan is blessed with abundant sunlight, averaging over 9.5 hours of daily sunshine across most parts of the country. This makes it naturally well-suited for solar energy production. In line with this potential, the government’s Alternative and Renewable Energy Policy of 2019 aims to increase renewable energy’s share of the national energy mix to 20% by 2025 and 30% by 2030. The policy also emphasizes the need for local manufacturing of solar components to reduce the country’s reliance on imports.

Despite these ambitious goals, Pakistan remains heavily dependent on imported solar technology. In 2024 alone, the country imported 22 gigawatts (GW) of solar panels, positioning itself as one of the fastest-growing solar markets in the Asia-Pacific region. However, the high cost of solar components and the lack of sufficient local production capacity have made the widespread adoption of solar energy financially challenging for businesses and households alike. The inability to locally assemble solar panels adds another layer of complexity, making it difficult to meet the rapidly growing demand for solar energy.

The shift toward localizing the solar industry in Pakistan presents a range of benefits, including job creation, cost reduction, and enhanced energy security. Establishing a domestic solar manufacturing sector would not only generate employment opportunities in production, installation, and maintenance but also reduce Pakistan’s dependency on costly foreign imports. By manufacturing solar components locally, the cost of solar energy could become more affordable for both residential and commercial consumers, ultimately accelerating the widespread adoption of solar technologies across the country.

Moreover, a local solar manufacturing industry would help strengthen Pakistan’s energy resilience. With a robust supply chain in place, the country would be less vulnerable to global disruptions that have the potential to impact solar component imports. Additionally, developing local manufacturing capabilities could lead to increased innovation and technical expertise within the country, fostering a more self-sufficient energy sector in the long term.

Recognizing the importance of indigenizing solar production, global solar technology leader LONGi Pakistan has actively advocated for the development of local solar manufacturing capabilities. At the “Great Solar Rush” event in Pakistan, Ali Majid, General Manager of LONGi Pakistan, emphasized the need for local production, stating, “Pakistan is witnessing a solar revolution, but to make it truly sustainable, we need to build local capabilities. At LONGi, we are committed to bringing global expertise and innovation to support Pakistan’s clean energy goals.” This statement underscores the growing consensus among industry leaders that localizing solar production is a critical step toward achieving long-term energy security.

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Challenges to Overcome in Achieving Solar Indigenization

While the potential benefits of localizing solar manufacturing are clear, there are several significant challenges that must be addressed to ensure the success of this transition.

National Grid Limitations

One of the major obstacles facing the widespread adoption of solar energy in Pakistan is the national grid’s inability to efficiently integrate the increasing influx of solar power. The current grid infrastructure is outdated and poorly equipped to handle the decentralized nature of solar energy, which can lead to power imbalances and instability. Furthermore, the introduction of net metering, which was meant to incentivize solar adoption by allowing consumers to sell excess energy back to the grid, has created financial difficulties for power distribution companies. Many of these companies are already burdened with circular debt, making it challenging to support the growth of renewable energy sources without significant financial restructuring.

Financial and Regulatory Hurdles

The lack of strong incentives for local solar manufacturing presents another hurdle. While the government has reduced import duties on certain solar components, there is still a lack of policies that promote large-scale domestic manufacturing. Small and medium-sized solar enterprises also face difficulties accessing financing, limiting their ability to scale up operations. This creates an environment where only large international players, like LONGi, can thrive, but the broader industry remains stunted.

Dependence on Imported Raw Materials

Another key issue is Pakistan’s reliance on imported raw materials to manufacture solar panels. The country lacks the necessary raw material production infrastructure, such as polysilicon, which is vital for manufacturing photovoltaic (PV) cells. As a result, local manufacturers must rely on imports, which increases costs and slows the development of a self-sufficient solar industry.

Energy Storage Challenges

As more consumers generate their own electricity through solar panels, the need for energy storage solutions becomes increasingly critical. Energy storage systems, such as batteries, allow businesses and homeowners to store excess solar power and use it during periods of low sunlight. Although the falling prices of lithium-ion batteries and locally assembled inverters have made solar energy more viable, challenges remain. High upfront costs deter many potential adopters, while battery lifespan limitations raise concerns about long-term sustainability. Moreover, the recycling and disposal of batteries remain an unresolved issue, which could exacerbate environmental concerns as adoption grows.Lack of a Domestic Solar Panel Manufacturing Industry

Despite the rapid growth of solar adoption, Pakistan still lacks a fully developed domestic photovoltaic (PV) panel manufacturing industry. The country’s reliance on Chinese imports to meet demand is a key vulnerability, especially considering the global supply chain disruptions and fluctuating prices of solar components. Without a local manufacturing base, Pakistan remains at the mercy of external factors that affect the cost and availability of solar technology.

Moving Forward: Strategies for Solar Indigenization

To ensure the long-term success of solar energy in Pakistan, the country must prioritize solar indigenization through strategic investments, policy reforms, and public-private partnerships. Some key steps include:

1. Encouraging Local Manufacturing: The government should introduce tax incentives, subsidies, and other supportive measures to encourage the development of local solar component manufacturing. This will reduce reliance on imports, create jobs, and foster economic growth.
2. Grid Modernization: To accommodate decentralized solar power, the national grid must be upgraded with smart grid technologies that can efficiently manage the flow of solar energy and reduce transmission losses.
3. Expanding Energy Storage Capabilities: Pakistan should invest in local battery manufacturing and recycling facilities to support the growing demand for energy storage solutions. Government subsidies and tax incentives for energy storage technologies could help accelerate adoption and reduce reliance on imports.
4. Regulatory and Financial Reforms: The government should provide clearer incentives for local solar manufacturers and address the financing difficulties faced by small and medium-sized enterprises. Additionally, reforms in the net metering system could help balance the growth of solar energy with the financial stability of the power sector.

Pakistan stands on the precipice of a solar revolution. By reducing its reliance on imported solar components and investing in local manufacturing capabilities, the country can enhance its energy security, drive economic growth, and contribute to a cleaner, more sustainable future. However, realizing this potential requires overcoming several challenges, including grid integration, financial constraints, and the development of a domestic solar panel industry. With the right policies, investments, and collaboration between the public and private sectors, Pakistan can build a self-reliant solar industry that drives its clean energy future. The question remains: can Pakistan balance affordability, quality, and rapid adoption to create a sustainable solar sector, or will it continue to depend on imports for its renewable energy future?