World Economic Forum says Pakistan now world’s sixth-largest solar market

ISLAMABAD: Pakistan is now the sixth-largest solar market in the world and its “rapid adoption” of solar energy provides valuable lessons for emerging markets, a World Economic Forum report said this week as Islamabad tries to dodge rising fuel prices through renewable energy resources. 
Pakistan’s energy sector has long struggled with financial strain due to circular debt, power theft and transmission losses, leading to blackouts and high electricity costs. 
Experts say Pakistan has ideal climatic conditions for solar power generation, with over nine hours of sunlight in most parts of the country. According to the World Bank, utilizing just 0.071 percent of the country’s area for solar photovoltaic (solar PV) power generation would meet Pakistan’s electricity demand.
According to the National Electric Power Regulatory Authority, currently, only 5.4 percent of Pakistan’s installed power generation capacity of 39,772 megawatts comes from renewables like wind, solar and biomass, while fossil fuels still make up 63 percent of the fuel mix, followed by hydropower at 25 percent.
“The country is now the world’s sixth-largest solar market,” WEF said in its report published on Monday. “Declining solar panel prices, coupled with skyrocketing grid electricity tariffs that have increased by 155 percent over three years, are fueling a rush in renewable energy adoption in Pakistan, with solar power leading the way.”
The report highlighted that Pakistan’s move to adopt solar energy was driven by external factors such as China’s overproduction of solar panels, which had lowered the costs for Pakistan, making the country the third-largest destination for Chinese solar exports.
“Industrial, agricultural and residential sectors have embraced solar, with imported Chinese modules totaling 13 gigawatts (GW) in the first half of the year, and forecasts reaching 22GW by year-end,” the report said.
The WEF said the inability of state-owned energy providers to provide a stable supply and the government’s inconsistent energy policy characterized by ” inefficiencies in production, pricing and regulations” has deepened Pakistan’s energy crisis, aiding in the usage of solar energy.
“Grid electricity demand dropped by more than 10 percent in the past fiscal year as inflated tariffs burden consumers with covering inefficiencies,” the report added. “This trend has sparked a wave of solar adoption among industrial, commercial and private users who can afford self-generation.”
Supportive policies like offering credit for solar in off-grid areas and unbundling customer categories can also boost renewable energy adoption, it said. 
“Pakistan’s journey underscores the importance of balancing policy innovation with market adaptation to drive sustainable and equitable energy solutions,” the WEF report concluded.