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| 7-February-2025 |
The more panels go up on factories, shops and middle-class homes, the less money electricity companies collect for their supply, which is generated from coal, gas, nuclear and hydro power stations.[2]
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| Solar panels on a petrol station in Karachi. Photo: Aqib Yasin |
This has exacerbated the cash crisis in the electricity sector, which is about $9 billion in debt, and weighed down by onerous capacity payments – amounts guaranteed to mostly foreign-owned power station owners, whether or not their output is used.
But the sharpest pain is felt by low-income households who rely on electricity from the grid, and can not afford the up-front investment of hundreds, or thousands, of US dollars for solar panels. Their bills are going up still further.
An aging electricity network, with frightful losses from old and damaged cables and substations, theft, and non-payment of bills – problems Pakistan shares with many countries – makes matters worse.
The International Monetary Fund (IMF) has much to answer for. In recent debt talks with the government, its negotiators suggested that payments to rooftop solar owners, for electricity they supply to the grid, should be cut, and ways found to boost demand for fossil-fuel-generated electricity.
So the capacity payments to power producers, an exploitative scheme the IMF pioneered across the global south, are being prioritised over Pakistani people’s needs for electricity, and humanity’s need rapidly to move away from fossil fuels.
The rapid expansion of decentralised solar hints at a utopian dream: a technology that provides very low-carbon electricity that can be owned and controlled by people, not corporations. But implemented in this way, by the market and to the exclusion of the households that need it most, it appears in some respects like a nightmare.
In this article, I assess the potential, and limitations, of Pakistan’s solar boom. I cover some background about Pakistan’s energy sector in a linked article, “Pakistan solar Q&A”.
The rush for solar
Can rooftop solar play a significant part in electricity systems? Yes. Its extraordinary, unplanned expansion over the last two years in Pakistan settles the argument.
There are no proper records of off-grid solar, but it is very likely that about 5 gigawatts of new panels were installed off-grid last year, along with up to 3 gigawatts at homes and businesses with a grid connection.[3]
(For comparison: 1 GW is about the capacity of each of the UK’s largest offshore wind farms. The total national capacity of Pakistan’s power plants is 41 GW. See also “Pakistan solar Q&A”.)
Pakistan had 158,000 grid-connected solar installations in June last year, more than double the number a year earlier. The aggregate generation capacity of this grid-connected rooftop solar was 2.5 GW – a 90% year-on-year increase, and seven times the level in 2021.[4]
Industry observers expect that the installations will continue – not least because many more gigawatts of panels have been imported: 15 GW last year alone, according to customs data. Such was the oversupply that, in November, PV magazine reported a glut: unsold modules were literally “lying on the road”.[5]
Solar panel imports from China first exploded in 2023, driven by exceptional market factors. First, the cost of panels started falling: by mid 2024 sales prices, at less than 13 euro cents per watt, were half the level of 2022.[6] Second, in 2022, after years of trade deficits, the Central Bank had effectively run out of dollars and imposed an unspoken ban on imports. Traders with their own dollars saw an opportunity to grab the cheap panels and re-sell at a profit.
“There was a massive 100% margin in the trading business: everyone jumped in and started ordering lots of panels”, Hussain Khan of Wateen Energy Solutions said in a press interview. “Companies that have exports of rice, for example, would bring their dollars back from abroad.”[7]
The panels prices crashed just as electricity tariffs were leaping up. By 2023-24, the base tariff (a national average worked out by the electricity regulator) was 45.06 rupees per kilowatt hour (kWh), 80% up since 2022 and more than three times the level of 2018.[8]
The price increases had three types of causes:
🔴 The spike in international fossil fuel prices that followed the Russian invasion of Ukraine in early 2022;
🔴 The devaluation of the rupee during Pakistan’s successive debt crises; and
🔴 A web of connected problems in Pakistan’s electricity sector, listed by the electricity regulator as: increased capacity payments to power station owners for capacity that was not needed and not used; “circular debt” mounting between distribution, transmission and generation companies; high electricity losses in networks, which are about double the international average; theft, and failure to recover sales income; poor governance and bad service, including constant blackouts; and “reduced electricity use”, including people deserting the grid to use solar.[9] (See also “Pakistan solar Q&A”.)
Money-wise, the capacity payments to power producers, including Chinese-owned coal plants, are the biggest and most politically contentious problem. Last year the chunk of electricity bills that went on capacity payments was more than twice as large as the portion used to pay for electricity supplied.[10] (More on this, too, in “Pakistan solar Q&A”.)
The supply of electricity from the grid in Pakistan, as in many countries outside the rich world, is unreliable: “prolonged” blackouts (12 hours or more) affect “not only the rural areas but numerous major cities”, the regulator states.[11] Soaring prices for that supply, and sinking prices for solar panels, presented a simple choice to those who had the money to make it.
How solar is used
Three distinct groups of people benefit from the solar boom:
1. Businesses, especially manufacturers, that have installed panels and either quit the grid entirely, or sharply reduced their offtake of grid electricity. Press reports highlighted Forward Sports, the world’s largest maker of footballs, who bought panels “in response to pressure to go green from Adidas”.
Ijaz Bacha, speaking for the Kyber Pakhtunkhwa marble industry, said that panels meant the difference between businesses’ survival and bankruptcy: his own firm’s electricity bill had dropped by 40%, after a $90,000 investment in panels. Irteza Ubaid, chief operating officer of Shams Power of Lahore, one of the biggest panels importers, said that “multinational companies including Coca Cola Mondelez and Hyundai are gobbling up the panels he imports from China”.[12]
Some businesses buy and fit panels themselves; others sign power purchase agreements with suppliers that own the panels and sell electricity to the rooftop’s owner.
Farmers operating tube wells that access deeper-lying water resources may also benefit from the solar boom. The federal government, and provincial government of Balochistan, agreed last year to fund the substitution of solar power for fossil-fuelled power for 28,000 tube wells. The water resources ministry has opposed the scheme, because the wells will permanently deplete the water table, a problem that has bedevilled south Asian agriculture for decades.[13]
2. People who have had no grid connection, and are getting access to electricity more rapidly as a result of the glut of panels. The government’s claims that almost the whole Pakistani population has access to the grid is widely questioned. The electricity regulator said that in 2023, more than one quarter of Pakistan’s population – including in large swathes of Balochistan, Khyber Pakhtunkhwa and Sindh – had no access. Many more have unreliable access, punctuated by constant blackouts.[14]
Government policy is to provide off-grid electricity with solar-powered micro- and mini-grids. In 2019, the World Bank offered $100 million to finance off-grid solar in Sindh; while implementation has been painfully slow, the provincial government appears to be on course to electrify 200,000 homes, as well as building solar parks. The provincial government of Punjab province, in which more than half of Pakistan’s population lives, also announced a scheme that would provide free panels to the energy-poorest households.[15]
3. Better-off households, mostly in urban areas, who comprise the vast majority of those with grid-connected solar and sell any surplus to distribution companies. Under Pakistan’s net-metering scheme, the price of these households’ exports to the grid is deducted from their electricity bills. In the financial year 2023-24, such customers exported 1309 gigawatt hours (GWh) to the grid – 70% more than the previous year – while importing 1860 GWh.[16]
In Lahore, better-off households are heaving with panels, but poor neighbourhoods have none. The stark contrast between Model Town and Shadhara-2, better-off and poorer areas respectively, is shown in the photos. Many low-income households in the city have no access to free roof space on which to mount panels, the Lok Sujag web site reported.[17]
The way that electricity is paid for in Pakistan means that the installation of panels – whose owners can then meet some or all of their own electricity needs for free – deprives the network of revenues, and exacerbates inequalities.
The loss of large business customers, especially, is driving electricity distribution companies into debt, which has a knock-on effect on the state’s finances.
It doesn’t have to be this way. The problems lie not with rooftop solar – a first-class technology that potentially can provide electricity more equitably and reduce fossil fuel use – but with the way electricity is treated economically.
On one hand, in Pakistan – as in many countries – electricity is sold as a commodity, rather than provided as a service. Distribution companies depend heavily on every rupee they can recover from households. On the other hand, fossil-fuelled power station owners have insanely favourable (and completely anti-“market”) contracts, that guarantee capacity payments even when they don’t produce electricity.
The more middle-class customers and businesses opt for solar, the less they pay for fossil-fuelled electricity, and the greater the burden of the industry’s fixed costs including the capacity charges … which in turn increase, as the throughput of fossil-fuel-produced electricity falls.
The Institute for Energy Economics and Financial Analysis (IEEFA) reckons that net-metering exports to the grid could easily triple to 3700 GWh/year, which would trigger capacity payment increases that add another 0.5 r/kWh to people’s bills – not much on its own, but an addition to an already crippling burden.[18]
IMF officials have endorsed proposals to bump up the revenues of distribution companies – which the IMF wants Pakistan to privatise – by slashing payments to net-metering customers for their solar electricity. They hope that this, combined with abolition of schemes to distribute free panels to low-income households, would slow down the shift to solar. Reportedly, most electricity company managers agree.
To make the net metering deal less attractive, the government may cut the rate paid for solar electricity from 21 r/kWh to 7.5-11 r/kWh, and/or scrap net metering (under which the household uses its own electricity, and only pays for any extra supplied from the grid) in favour of gross metering (under which the solar electricity is owned by the distribution company, who pay the household at a lower rate for exports, and sell all the household’s needs to it at the higher retail rate).
It is typical of the IMF, which has long sought to impose the dogmas of liberalisation and privatisation on governments outside the rich world, that its officials should approve these plans to stifle the solar boom (which, ironically, has been driven forward by market forces), in a risky attempt to fatten up distribution companies for privatisation.[19]
Whether the proposals will be implemented is unclear. Politicians are fearful of anger over high electricity bills, and well aware of solar electricity’s popularity.
What is certain is that the international financial institutions are as two-faced as the whole process of international talks on climate policy. World Bank staff are working to fund solar farms in Pakistan that fit with its investment conditions[20] … while their IMF colleagues encourage Pakistani companies to price rooftop solar installations out of the market artificially, for the sake of debts arising from past, dogma-driven deals with fossil-fuelled power stations’ owners.
The roots of Pakistan’s electricity problems
For the first decade of Pakistan’s statehood (from 1947), electricity was supplied locally by privately owned companies. The state-owned Water and Power Development Authority (WAPDA) oversaw the creation of a national network and the construction of three giant dams. Until the 1990s, hydro supplied two-thirds or more of Pakistan’s electricity. In 1972 the local suppliers were nationalised and brought under WAPDA’s wing.[21]
Pakistan’s military, which ruled directly in the 1960s, and again between 1977 and 1988, was an important ally for the USA and other western powers. They provided it with funds for civilian infrastructure, including hydro, fossil-fuelled, and nuclear power stations. But from the 1990s it was forms of economic imperialism, more than political or military ties, that shaped the electricity network’s expansion.
The international financial institutions (mainly the IMF and World Bank) imposed their formulas for electricity reform – privatisation and market liberalisation – on Pakistan, along with India and other countries across the global south.
In 1994, with industry demanding more electricity than the system could provide, and most households still without electricity, Pakistan offered lucrative deals to foreign investors – mainly big western-owned electricity corporations – to build power stations, most of which relied on imported fuel oil or gas.
These “independent power producers” (IPPs) were offered guaranteed returns of up to 25%, paid in US dollars (leaving the currency risk with the state), and other tax exemptions and benefits. Pakistan soon found these contracts too punitive – and by 1998, after public scandals and legal cases, most were compulsorily renegotiated.[22]
Economic bullying by the World Bank and the multinational electricity corporations was not confined to Pakistan. India and other countries pushed back against the IPP contracts, which allowed private capital to profit handsomely from electricity generation, without having to worry about the manifold social and economic challenges associated with electrification, or chronic underinvestment in electricity transmission and distribution.[23]
Energy researchers reckon that, in the early 2000s, the network’s problems not only remained unaddressed, but were exacerbated by consumption-led economic growth policies. By the 2010s, electricity shortages had again become a national scandal.[24] Electricity use rose, but remained way behind the level of rich countries, as the graph shows.
In 2013, Nawaz Sharif was elected prime minister. Fixing the electricity network was a key election promise. He turned to China for help, and in the succeeding years Beijing provided billions of dollars’ worth of loans and investment for new power stations and other infrastructure. The China-Pakistan Economic Corridor, launched triumphantly in 2015 during a visit by Chinese president Xi Jinping, envisaged a range of infrastructure projects. More than half of the funds invested went into power stations.[25]
Two problems arose. First, the power purchase agreements (PPAs) signed between Pakistan’s state-owned electricity companies and Chinese power station owners were just as exploitative as those signed with western companies two decades previously. The returns were guaranteed, in dollars.
Second, some of the new power stations were to be fuelled by gas, but most worked on coal, which until then had played a negligible part in Pakistan’s electricity system. Coal’s share of the electricity generation mix rose from 1% in 2015 to 19% in 2019. And while the government claimed they could be fuelled from Pakistan’s own Thar coal resources, these were not developed in time – and still have not been. So coal was imported.
Pakistan was lumbered with more costly import contracts. The atmosphere was burdened with new emissions from coal burning, at a time when they needed to be cut.
“The Chinese capacity expansion may have helped overcome power generation shortfalls, but the more chronic problems of a creaking transmission network, poor bill-recovery track record, and emissions have remained”, wrote Khurram Husain of Dialogue Earth, in one of many critiques.[26]
In 2022, Pakistan was hit by a series of shocks: ecological – summer floods that devastated one-third of the country and destroyed 2 million homes; economic – a falling exchange rate, galloping inflation, and a debt crisis that led to near-default in 2023 before an emergency IMF loan; political – the resignation of Imran Khan as prime minister, which sparked a constitutional crisis and his arrest in 2023; and social – widespread protests by farmers and others.
Electricity prices rose sharply, as the cost of imported fuels jumped after the Russian invasion of Ukraine. The rupee continued to slide. When Chinese-owned power plants’ customers failed to pay, electricity was switched off; a government decision to encourage six-day working was reversed as blackouts became more frequent; and construction of one new plant, at Gwadar, was halted.[27]
Demands that the contracts with Chinese companies be renegotiated became louder, reminiscent of the reaction to punitive contracts with western companies in the 1990s.
Into this crisis – mounting blackouts, a dysfunctional network, soaring electricity prices for households and businesses, billions of dollars’ worth of debts for the state, and no obvious solutions – came the sudden rush of cheap Chinese-made solar panels.
The rapid expansion of decentralised solar – which from a decarbonisation point of view seems miraculous – appears, upside down and back to front, in a form that excludes the poorest households. Things could so easily be different.
Energy policy
Pakistan’s energy policy dilemmas are not separate from its deep-going economic and political crises. For the government, still not safe from bankruptcy, renegotiating the onerous capacity contracts may be the priority. Energy minister Awais Leghari said in August last year that they are being reviewed, but this month the issue remains unresolved.[28] Disputes about energy policy rage against a background of repression against the Pakistan Tehreek-e-Insaf party, whose leader Imran Khan has just been sentenced to 14 years in jail.[29]
Beyond the immediate financial crisis, there are two big clouds on the electricity sector’s political horizon: IMF-supported privatisation dogma, and a retreat from big, clearly realisable renewables expansion targets.
That privatisation dogma lies behind a government decision to sell off Pakistan’s electricity distribution companies, starting with the three most profitable (in Faisalabad, Islamabad and Gujranwala) and following up with debt-laden firms elsewhere.[30] A related measure is the shift from the current wholesale arrangements, with a single buyer of electricity, to a traded wholesale electricity market.[31]
Electricity workers’ trade unions, energy researchers and economists have warned that mismanagement, corruption and structural problems in what is essentially a service sector will not be solved by privatisation – an earlier phase of which produced the exploitative IPP contracts and is itself partly to blame for the electricity sector’s dire financial plight.
Electricity workers have staged demonstrations and strikes against the proposed sell-off. Abdul Latif Nizamani, president of the All Pakistan Hydro Electric Workers Union said at a rally in June last year that investment in transmission and distribution capacity are the priorities.
There are 80,000 unfilled vacancies in the distribution sector, and the union says that companies’ failure to implement the government-approved minimum wage has exacerbated staff shortages. Nizamani has also pointed to the failure of electricity distribution privatisation in India and Bangladesh to achieve the efficiency improvement it was supposed to. The government has responded to the protests with several attempts – all unsuccessful, so far – to ban the union, triggering international protests.[32]
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| Electricity workers demonstrating against privatisation, Hyderabad, 2023 |
A review of the privatisation plan by the Policy Research Institute for Equitable Development warned:
If the government goes ahead with privatisation of management, without addressing the overall structural issues in the [distribution companies], which currently facilitate rent seeking behaviours instead of theft control, the effort might go in vain.[33]
While the dispute over privatisation rages, a second, longer-term policy discussion has begun over investment priorities in electricity generation. A plan set out last year by the state-controlled National Transmission and Dispatch Company (NTDC) has been denounced by researchers, environmentalists and civil society groups for slashing renewables expansion targets, and for proposing to commit billions of dollars to unnecessary nuclear, coal and large hydro projects.
In the NTDC’s most recent Indicative Generation Capacity Expansion Plan (IGCEP-2024-34), the share of variable renewable energy (VRE, mainly solar and wind) in the electricity supply mix projected for 2034 has been reduced to 12.9%, from 30% in the previous version of the plan published in 2023.
A review by civil society groups said that two high-cost projects, the Diamer dam and Chashma nuclear plant, should be shelved to save up to $12 billion. Given the expansion of grid-connected solar, no capacity additions beyond those already committed would be needed until at least 2027, they pointed out. Furthermore, transmission upgrades between the Karachi generation company K-Electric and the national grid could help resolve capacity issues.[34]
The Pakistan Renewable Energy Coalition pointed in a briefing to numerous flaws in the IGCEP modelling, and said its proposals “contradict the least-cost principle” on which it is supposedly based. Battery storage systems, distributed generation and hybrid renewable energy had been entirely overlooked, and the potential of net metering underestimated. Overreliance on hydropower, including projects in the extreme north and south of Pakistan that would require substantial new transmission lines to connect with demand centres, is a danger, the coalition argued.[35]
Conclusions
The rapid, market-drive solar expansion raises questions that matter to the labour movement and social movements internationally. I live a long way from Pakistan and can not offer comment on political issues, but here I highlight some of these broader questions.
🔴 Solar is expanding at an unprecedented pace in Pakistan, “unplanned and uncoordinated”, “despite the state, not because of it”, as the researcher Asha Amirali has commented.[36] Raw market dynamics, not policy decisions, have driven the process. This may appear to prove “free market” ideologues’ point, that the the market can drive the “energy transition” away from fossil fuels. Actually it does no such thing. It shows that, left to its own devices, the market turns rooftop solar into a privilege for businesses and better-off households, and potentially pushes large swathes of the population into even more desperate energy poverty. It shows that, because of how capitalism works, rooftop solar is added to other fuels, not substituting them: Pakistan’s plans to expand coal, large hydro and nuclear are moving ahead. An effective transition away from fossil fuels – not just in Pakistan but internationally – requires efficient, low-throughput provision of electricity and other energy carriers, not as commodities but as a public service. It requires transformation of the way that the economy uses fuels, prioritising human need against corporate profit.[37]
🔴 China plays, and will continue to play, a big part in both obstructing, and pushing forward, the move away from fossil fuels. In Pakistan, the western companies’ rapacious IPP contracts of the 1980s were superceded in the 2010s by equally rapacious contracts with Chinese companies. These not only exacerbated Pakistan’s debt crisis, but also produced a new dependence on imported coal – at a time when climate scientists were screaming at politicians that coal use globally needs to fall, and when China, having overtaken the US as the world’s largest coal consumer, pushed its coal boom to even more alarming heights. China is also installing wind and solar capacity far faster than any other nation, although much of this adds to, rather than replaces, coal-fired power.[38] And it is China’s giant solar panel industry that produced the modules that have flooded into Pakistan.
🔴 We are catching a glimpse of the technological potential of rooftop solar. In Pakistan, where it is grid-connected, integration has caused minimal problems, that appear to be overshadowed by the headaches of long-term under-investment in electricity transmission and distribution. The solar rush is a reminder of the importance of considering not “energy” as an undifferentiated commodity, but people’s needs for different types of energy services, and the extent to which rooftop solar with grid back-up can meet these. The potential for reducing energy throughput, by a combination of rooftop solar, other small-scale generation, and computerised network management, is far from being realised. These technologies, along with e.g. zero-emissions building techniques and heat pumps, deserve our attention.
🔴 The course of the transition away from fossil fuels will depend to a large extent on who owns and controls electricity. Every struggle in defence of public ownership, such as the trade unionists’ fight in Pakistan, matters. The technological transition – which is bringing small-scale and decentralised technologies to the fore in electricity, as it has already done in computing and communications – produces new challenges. In the case of rooftop solar, the market in many countries is dominated by corporates that own panels, rather than selling them, and either lease them out or sell the electricity. In Pakistan, ownership of panels by electricity consumers produces a different dynamic. Economically, middle class panel owners are in a position analogous to the hundreds of millions of farming households who still produce most of the world’s food: their panels are tools with which they produce their own electricity, while selling the surplus to the market. We can champion multiple cooperative and municipal forms of ownership of small-scale electricity technologies, while also siding with these small producers against capital.
Pakistan solar Q&A (a linked article)
Download this, and a linked article, as a PDF here
[1] I gathered information for this article remotely, and have not visited Pakistan. I thank Asha Amirali, Faraz Hayat and others who have discussed the issues with me. Thanks also to David Camfield. Mistakes made, and opinions expressed, are mine
[2] A note about terminology. Although I refer to “power stations”, I avoid using the word “power” to refer to electricity. I think that is confusing. Power is the rate at which energy is used or transferred; that might or might not be in the form of electricity
[3] Official data reported in: “Solar boom hits DISCO revenues”, Express Tribune, 10 November 2024. The figure aligns with customs records of panel imports, and the grid-connected figure aligns with the electricity regulator’s reports
[4] NEPRA, State of the Industry Report 2024, page 23. The figures are for net-metered installations, the overwhelming majority of which are rooftop
[5] “Chinese module exports drop in September led by Europe”, Infolink; “Surprise solar boom in Pakistan helps millions, but harms grid and power companies”, Business Standard, 22 November, 2024; “Dealing with Pakistan’s solar glut”, PV magazine, 4 November 2024; Solar Power Europe, Global Market Outlook for Solar Power 2024-2028, page 142
[6] Solar Power Europe, Global Market Outlook, page 144; “Chinese solar panel boom threatens Pakistan’s debt-ridden grid”, Financial Times, 18 September 2024
[7] “Dealing with Pakistan’s solar glut”, PV magazine, 4 November 2024
[8] The base tariff was 13.35 r/kWh in May 2018, 24.82 r/kWh from October 2022 and 45.06 for the financial year ending 30 June 2024. NEPRA, State of the Industry Report 2023, page 21, and State of the Industry Report 2024, page 14
[9] NEPRA, State of the Industry Report 2023, page vii
[10] NEPRA, State of the Industry Report 2024, page 14
[11] NEPRA, State of the Industry Report 2023, pages 2 and 18
[12] “The unintended consequences of Pakistan’s solar energy boom”, Oilprice.com, 11 November 2024; “Chinese solar panel boom threatens Pakistan’s debt-ridden grid”, Financial Times, 18 September 2024; Shams Power web site
[13] “Accord signed to ‘solarise’ tube wells in Balochistan”, Dawn, 9 July 2024; “Ministry opposes solarisation of Balochistan tubewells”, Business Recorder, 1 October 2024. For a valuable historical perspective, see: Navroz Dubash, Tubewell Capitalism: groundwater development and agrarian change in Gujarat (Oxford University Press, 2002)
[14] NEPRA, State of the Industry Report 2023, page 11. The World Bank statistical service assesses electricity access at 95% (see its data site here), but a detailed report by a World Bank economist, published in 2019, said that estimates based on census data and utility connections information suggest that access was 74%. A survey conducted by the World Bank’s finance arm in 2014 assessed access at 65%. (See: Fan Zhang, In the Dark: how much do power sector distortions cost south Asia? (World Bank, 2019), page 7.)
[15] “Pakistan, World Bank sign $100 million agreement”, The News, 9 January 2019; ; Solar Energy in Pakistan: a growing market, Infolink Consulting, 5 November 2024. (See also “Pakistan solar Q&A”.)
[16] NEPRA, State of the Industry Report 2024, pages 23, 85 and 87. Households account for 134,000 of the 158,000 net metering connections, and 56% of the net-metered electricity exports to the grid. Almost all the rest is from industry
[17] “Walled City of Lahore – hurdles to solar panels installation and solutions”, Lok Sujag, 13 July 2024
[18] Haneea Isaad and S.F.A. Shah, The Future of Net-Metered Solar Power in Pakistan (IEEFA, August 2024), pages 27-28
[19] “Government to shift from net to gross metering for solar panels”, Profit, 19 May 2024; “IMF told about likely solar policy changes”, The News, 22 May 2024; “Solarisation, falling power demand worry IMF”, Express Tribune, 12 November 2024; “IMF raises concerns on Pakistan again”, Asian News International, 13 November 2024; “Pakistan’s rooftop solar boom shines spotlight on power crisis”, Nikkei Asia Insight 9 July 2024; “Gov’t mulls slashing rooftop solar buyback tariff”, Pakistan Today, 21 November 2024; “Misplaced concerns”, Dawn, 28 December 2024
[20] The World Bank’s new Country Partnership Framework envisages supporting 10 GW of new renewables capacity, although its focus is as much on developing mining for export as on providing electricity that Pakistani people need. See World Bank, Country Partnership for the Islamic Republic of Pakistan FY26-FY35, page 16, and Balochistan Renewable Energy Development Study (World Bank, 2024)
[21] Ijlal Naqvi, Access to Power: electricity and the infrastructural state in Pakistan (Oxford University Press, 2022), pages 22-23
[22] “Pakistan’s rooftop solar boom shines spotlight on power crisis”, Nikkei Asia Insight 9 July 2024; Naila Saleh, “Pakistan’s energy transformation pathway and environmental sustainability”, in M. Asif (ed.), Energy and Environmental outlook for South Asia (Routledge, 2020), pp. 175-193; Haneea Isaad, Optimising Pakistan’s economy by renegotations PPAs (IEEFA, Dec 2024), pp. 8-9; J. Fraser, Lessons from the IPP Experience in Pakistan (World Bank, 2005)
[23] See e.g. S. Pirani, Burning Up: A Global History of Fossil Fuel Consumption (Pluto Press, 2018), pages 143-147, and K. Gratwick and A. Eberhard, “Demise of the standard model for power sector reform and the emergence of hybrid power markets”, Energy Policy 36:10 (2008)
[24] A Vicious Crisis Cycle: the energy-economy nexus in Pakistan (PRIED, July 2024); Tim Sahay and Kate Mackenzie, “Debt and power in Pakistan”, The Polycrisis 23 February 2023
[25] R.R. Bhandary and K.S. Gallagher, “What drives Pakistan’s coal-fired power plant construction boom? Understanding the CPEC’s energy portfolio”, World Development Perspectives 25 (2022), 100396; A Vicious Crisis Cycle: the energy-economy nexus in Pakistan (PRIED, July 2024); Optimising the China-Pakistan Economic Corridor. Reform agenda for CPEC 2.0 (PRIED/SDPI, 2024)
[26] Khurram Husain, “Analysis: Pakistan pays heavy price for excess power generation capacity”, Dialogue Earth, 10 March 2021
[27] “Pakistan blackouts choke economy as China power plants go unpaid”, Nikkei Asia, 15 June 2022
[28] “Gov’t is reviewing IPP’s coal sourcing, debt reprofiling with China”, Dawn, 24 August 2024; “China in Pakistan’s Power Sector: The Hidden Costs Behind Pakistan’s Energy Overcapacity”, The Diplomat, 18 January 2025
[29] “Pakistan ex-PM Imran Khan sentenced”, The Guardian, 17 January 2025
[30] Minail Khalid, “The impact of IMF programs on Pakistan”, Paradigm Shift, 11 July 2024; “Energy sector plans get IMF’s thumbs down”, Express Tribune, 13 February 2024; “World Bank recommends 10 Discos ownership transfer”, Profit magazine, 19 November 2024
[31] “Firm being set up to open power market”, Express Tribune, 20 October 2024; “Dealing with Pakistan’s solar panel glut”, PV magazine, 4 November 2024
[32] “Workers’ union stages rallies against plans for Wapda privatisation”, Dawn, 6 June 2024; “Wapda CBA says IPPs have destroyed national economy”, Dawn, 9 December 2024; “Denial of electricity workers’ trade union rights in Pakistan”, Public Services International, 21 January 2023; author’s interview with A. Nizamani
[33] Ahmed et al, Reform or Bust: Strategic approaches to address the rickety electricity distribution system (PRIED, 2024)
[34] Powering Pakistan’s Future: pathways to optimise affordable and sustainable electricity generation (PRIED and Renewables First, 2024)
[35] Neglected Potential: how the latest IGCEP fails renewable energy future in Sindh and Balochistan (Pakistan Renewable Energy Coalition, 2024); N. Jamal, “The downside of new energy generation plan”, Dawn, 26 June 2024; “Moot in Hyderabad demands environment-friendly, cheaper electricity for people”, Dawn, 23 July 2024
[36] A. Amirali, “Solar disruptions”, Dawn, 10 December 2024
[37] These are obviously sweeping statements. I have written at length about these subjects in: S. Pirani, Burning Up: a global history of fossil fuel consumption (Pluto Press, 2018); How energy was commodified and how it could be decommodified (2021); Wind, water, solar and socialism (2023); and elsewhere
[38] On discussions among socialists in the US and UK about China’s role, see S. Pirani, “China’s CO2 emissions are Soaring”, People & Nature, April 2021, and “China and Climate Change: an Exchange”, Monthly Review, April 2021
The rapid, market-drive solar expansion raises questions that matter to the labour movement and social movements internationally. I live a long way from Pakistan and can not offer comment on political issues, but here I highlight some of these broader questions.
🔴 Solar is expanding at an unprecedented pace in Pakistan, “unplanned and uncoordinated”, “despite the state, not because of it”, as the researcher Asha Amirali has commented.[36] Raw market dynamics, not policy decisions, have driven the process. This may appear to prove “free market” ideologues’ point, that the the market can drive the “energy transition” away from fossil fuels. Actually it does no such thing. It shows that, left to its own devices, the market turns rooftop solar into a privilege for businesses and better-off households, and potentially pushes large swathes of the population into even more desperate energy poverty. It shows that, because of how capitalism works, rooftop solar is added to other fuels, not substituting them: Pakistan’s plans to expand coal, large hydro and nuclear are moving ahead. An effective transition away from fossil fuels – not just in Pakistan but internationally – requires efficient, low-throughput provision of electricity and other energy carriers, not as commodities but as a public service. It requires transformation of the way that the economy uses fuels, prioritising human need against corporate profit.[37]
🔴 China plays, and will continue to play, a big part in both obstructing, and pushing forward, the move away from fossil fuels. In Pakistan, the western companies’ rapacious IPP contracts of the 1980s were superceded in the 2010s by equally rapacious contracts with Chinese companies. These not only exacerbated Pakistan’s debt crisis, but also produced a new dependence on imported coal – at a time when climate scientists were screaming at politicians that coal use globally needs to fall, and when China, having overtaken the US as the world’s largest coal consumer, pushed its coal boom to even more alarming heights. China is also installing wind and solar capacity far faster than any other nation, although much of this adds to, rather than replaces, coal-fired power.[38] And it is China’s giant solar panel industry that produced the modules that have flooded into Pakistan.
🔴 We are catching a glimpse of the technological potential of rooftop solar. In Pakistan, where it is grid-connected, integration has caused minimal problems, that appear to be overshadowed by the headaches of long-term under-investment in electricity transmission and distribution. The solar rush is a reminder of the importance of considering not “energy” as an undifferentiated commodity, but people’s needs for different types of energy services, and the extent to which rooftop solar with grid back-up can meet these. The potential for reducing energy throughput, by a combination of rooftop solar, other small-scale generation, and computerised network management, is far from being realised. These technologies, along with e.g. zero-emissions building techniques and heat pumps, deserve our attention.
🔴 The course of the transition away from fossil fuels will depend to a large extent on who owns and controls electricity. Every struggle in defence of public ownership, such as the trade unionists’ fight in Pakistan, matters. The technological transition – which is bringing small-scale and decentralised technologies to the fore in electricity, as it has already done in computing and communications – produces new challenges. In the case of rooftop solar, the market in many countries is dominated by corporates that own panels, rather than selling them, and either lease them out or sell the electricity. In Pakistan, ownership of panels by electricity consumers produces a different dynamic. Economically, middle class panel owners are in a position analogous to the hundreds of millions of farming households who still produce most of the world’s food: their panels are tools with which they produce their own electricity, while selling the surplus to the market. We can champion multiple cooperative and municipal forms of ownership of small-scale electricity technologies, while also siding with these small producers against capital.
Pakistan solar Q&A (a linked article)
Download this, and a linked article, as a PDF here
[1] I gathered information for this article remotely, and have not visited Pakistan. I thank Asha Amirali, Faraz Hayat and others who have discussed the issues with me. Thanks also to David Camfield. Mistakes made, and opinions expressed, are mine
[2] A note about terminology. Although I refer to “power stations”, I avoid using the word “power” to refer to electricity. I think that is confusing. Power is the rate at which energy is used or transferred; that might or might not be in the form of electricity
[3] Official data reported in: “Solar boom hits DISCO revenues”, Express Tribune, 10 November 2024. The figure aligns with customs records of panel imports, and the grid-connected figure aligns with the electricity regulator’s reports
[4] NEPRA, State of the Industry Report 2024, page 23. The figures are for net-metered installations, the overwhelming majority of which are rooftop
[5] “Chinese module exports drop in September led by Europe”, Infolink; “Surprise solar boom in Pakistan helps millions, but harms grid and power companies”, Business Standard, 22 November, 2024; “Dealing with Pakistan’s solar glut”, PV magazine, 4 November 2024; Solar Power Europe, Global Market Outlook for Solar Power 2024-2028, page 142
[6] Solar Power Europe, Global Market Outlook, page 144; “Chinese solar panel boom threatens Pakistan’s debt-ridden grid”, Financial Times, 18 September 2024
[7] “Dealing with Pakistan’s solar glut”, PV magazine, 4 November 2024
[8] The base tariff was 13.35 r/kWh in May 2018, 24.82 r/kWh from October 2022 and 45.06 for the financial year ending 30 June 2024. NEPRA, State of the Industry Report 2023, page 21, and State of the Industry Report 2024, page 14
[9] NEPRA, State of the Industry Report 2023, page vii
[10] NEPRA, State of the Industry Report 2024, page 14
[11] NEPRA, State of the Industry Report 2023, pages 2 and 18
[12] “The unintended consequences of Pakistan’s solar energy boom”, Oilprice.com, 11 November 2024; “Chinese solar panel boom threatens Pakistan’s debt-ridden grid”, Financial Times, 18 September 2024; Shams Power web site
[13] “Accord signed to ‘solarise’ tube wells in Balochistan”, Dawn, 9 July 2024; “Ministry opposes solarisation of Balochistan tubewells”, Business Recorder, 1 October 2024. For a valuable historical perspective, see: Navroz Dubash, Tubewell Capitalism: groundwater development and agrarian change in Gujarat (Oxford University Press, 2002)
[14] NEPRA, State of the Industry Report 2023, page 11. The World Bank statistical service assesses electricity access at 95% (see its data site here), but a detailed report by a World Bank economist, published in 2019, said that estimates based on census data and utility connections information suggest that access was 74%. A survey conducted by the World Bank’s finance arm in 2014 assessed access at 65%. (See: Fan Zhang, In the Dark: how much do power sector distortions cost south Asia? (World Bank, 2019), page 7.)
[15] “Pakistan, World Bank sign $100 million agreement”, The News, 9 January 2019; ; Solar Energy in Pakistan: a growing market, Infolink Consulting, 5 November 2024. (See also “Pakistan solar Q&A”.)
[16] NEPRA, State of the Industry Report 2024, pages 23, 85 and 87. Households account for 134,000 of the 158,000 net metering connections, and 56% of the net-metered electricity exports to the grid. Almost all the rest is from industry
[17] “Walled City of Lahore – hurdles to solar panels installation and solutions”, Lok Sujag, 13 July 2024
[18] Haneea Isaad and S.F.A. Shah, The Future of Net-Metered Solar Power in Pakistan (IEEFA, August 2024), pages 27-28
[19] “Government to shift from net to gross metering for solar panels”, Profit, 19 May 2024; “IMF told about likely solar policy changes”, The News, 22 May 2024; “Solarisation, falling power demand worry IMF”, Express Tribune, 12 November 2024; “IMF raises concerns on Pakistan again”, Asian News International, 13 November 2024; “Pakistan’s rooftop solar boom shines spotlight on power crisis”, Nikkei Asia Insight 9 July 2024; “Gov’t mulls slashing rooftop solar buyback tariff”, Pakistan Today, 21 November 2024; “Misplaced concerns”, Dawn, 28 December 2024
[20] The World Bank’s new Country Partnership Framework envisages supporting 10 GW of new renewables capacity, although its focus is as much on developing mining for export as on providing electricity that Pakistani people need. See World Bank, Country Partnership for the Islamic Republic of Pakistan FY26-FY35, page 16, and Balochistan Renewable Energy Development Study (World Bank, 2024)
[21] Ijlal Naqvi, Access to Power: electricity and the infrastructural state in Pakistan (Oxford University Press, 2022), pages 22-23
[22] “Pakistan’s rooftop solar boom shines spotlight on power crisis”, Nikkei Asia Insight 9 July 2024; Naila Saleh, “Pakistan’s energy transformation pathway and environmental sustainability”, in M. Asif (ed.), Energy and Environmental outlook for South Asia (Routledge, 2020), pp. 175-193; Haneea Isaad, Optimising Pakistan’s economy by renegotations PPAs (IEEFA, Dec 2024), pp. 8-9; J. Fraser, Lessons from the IPP Experience in Pakistan (World Bank, 2005)
[23] See e.g. S. Pirani, Burning Up: A Global History of Fossil Fuel Consumption (Pluto Press, 2018), pages 143-147, and K. Gratwick and A. Eberhard, “Demise of the standard model for power sector reform and the emergence of hybrid power markets”, Energy Policy 36:10 (2008)
[24] A Vicious Crisis Cycle: the energy-economy nexus in Pakistan (PRIED, July 2024); Tim Sahay and Kate Mackenzie, “Debt and power in Pakistan”, The Polycrisis 23 February 2023
[25] R.R. Bhandary and K.S. Gallagher, “What drives Pakistan’s coal-fired power plant construction boom? Understanding the CPEC’s energy portfolio”, World Development Perspectives 25 (2022), 100396; A Vicious Crisis Cycle: the energy-economy nexus in Pakistan (PRIED, July 2024); Optimising the China-Pakistan Economic Corridor. Reform agenda for CPEC 2.0 (PRIED/SDPI, 2024)
[26] Khurram Husain, “Analysis: Pakistan pays heavy price for excess power generation capacity”, Dialogue Earth, 10 March 2021
[27] “Pakistan blackouts choke economy as China power plants go unpaid”, Nikkei Asia, 15 June 2022
[28] “Gov’t is reviewing IPP’s coal sourcing, debt reprofiling with China”, Dawn, 24 August 2024; “China in Pakistan’s Power Sector: The Hidden Costs Behind Pakistan’s Energy Overcapacity”, The Diplomat, 18 January 2025
[29] “Pakistan ex-PM Imran Khan sentenced”, The Guardian, 17 January 2025
[30] Minail Khalid, “The impact of IMF programs on Pakistan”, Paradigm Shift, 11 July 2024; “Energy sector plans get IMF’s thumbs down”, Express Tribune, 13 February 2024; “World Bank recommends 10 Discos ownership transfer”, Profit magazine, 19 November 2024
[31] “Firm being set up to open power market”, Express Tribune, 20 October 2024; “Dealing with Pakistan’s solar panel glut”, PV magazine, 4 November 2024
[32] “Workers’ union stages rallies against plans for Wapda privatisation”, Dawn, 6 June 2024; “Wapda CBA says IPPs have destroyed national economy”, Dawn, 9 December 2024; “Denial of electricity workers’ trade union rights in Pakistan”, Public Services International, 21 January 2023; author’s interview with A. Nizamani
[33] Ahmed et al, Reform or Bust: Strategic approaches to address the rickety electricity distribution system (PRIED, 2024)
[34] Powering Pakistan’s Future: pathways to optimise affordable and sustainable electricity generation (PRIED and Renewables First, 2024)
[35] Neglected Potential: how the latest IGCEP fails renewable energy future in Sindh and Balochistan (Pakistan Renewable Energy Coalition, 2024); N. Jamal, “The downside of new energy generation plan”, Dawn, 26 June 2024; “Moot in Hyderabad demands environment-friendly, cheaper electricity for people”, Dawn, 23 July 2024
[36] A. Amirali, “Solar disruptions”, Dawn, 10 December 2024
[37] These are obviously sweeping statements. I have written at length about these subjects in: S. Pirani, Burning Up: a global history of fossil fuel consumption (Pluto Press, 2018); How energy was commodified and how it could be decommodified (2021); Wind, water, solar and socialism (2023); and elsewhere
[38] On discussions among socialists in the US and UK about China’s role, see S. Pirani, “China’s CO2 emissions are Soaring”, People & Nature, April 2021, and “China and Climate Change: an Exchange”, Monthly Review, April 2021
Footnote; Never a good idea to build a nuclear power plant over a known geological fault line as per the Chashma Nuclear Power Complex! I'd be very interested in seeing their safety routines there given the chronic lack of funding! Solar panels are the least of their worries..
ReplyDeleteyou would think.
DeleteI know you favour nuclear power but given climate change is there not a danger that fault lines could evolve in places hitherto unimaginable?
By Geological fault line I'm referring to Earthquake prone zones, think Fukushima. Climate changes would take aeons to affect the land to such a degree as to cause Earthquakes, perhaps landslips though, although these could be mitigated with planning. I can see a catastrophe happening there. Just a daft place to build one.
DeleteI suppose that would make sense.
DeleteAnthony, I am not fcuking about, I am very serious (I will throw into the mix I left school with no exams to my name and i have never looked back)...
ReplyDeleteWhat is the climate change debate all about----I know climate change isn't man made but 100% natural...
I guess the real question is to you....What is your take on climate change.....
Frankie - knowledge can be obtained outside school. Education is a name we give to the more formal organisation of learning.
DeleteI have no formal scientific training but have confidence in the scientific consensus given the status of science as the most advanced system of human knowledge that humankind has come up with.
I have confidence in the climate science consensus in the way I have it in the consensus on the age or shape of the earth despite claims from others that it is flat and only 6000 years old. Same with biological evolution. With an estimated 97 % of climate scientists in agreement on the man made nature of the problem I go with that.
But people should be free to believe that the earth is both flat and young or that humans appeared magically one day. I don't believe in cancel culture. Free inquiry is what we seek to abide by on this blog.