Middle-class Pakistani residents overlooked in the nation's solar energy expansion drive
Sizzling Karachi: Solar Saviors Amid the Heat and the Heat of Bills
KARACHI: Basking under the scorching 40-degree April heat, entrepreneur Saad Saleem cranks up his air-conditioning, unfazed by the surging electricity tariffs. Armed with a hefty $7,500 investment in solar panels, he's part of a solar surge in Pakistan, emphatically shrugging off the rising utility costs.
Two years ago, when the International Monetary Fund was coining deal terms with economically embattled Pakistan, Saleem secured a piece of the solar pie. The economic bailout package demanded hikes in power and gas tariffs to support struggling suppliers in the debt-ridden sector.
Fast forward to today, and the average Pakistani is now forking out a quarter more for electricity, causing a scramble for solar setup.
Last year, solar made up an impressive 14% of Pakistan's power supply, overtaking coal and displacing it as the third-largest energy source. Compared to China, the world's leading solar panel exporter and a pioneer in green technologies, this is nearly double the share. Even Asia's heavyweights fall short: this rate is amongst the highest in the continent according to our research using Ember data.
However, the allure of solar panels leaves many from Pakistan's urban middle class empty-handed. Staring down increasing bills, they are forced to skimp on electrical usage. Most residential solar systems are off-grid, making the excess power unshareable.
This exodus of well-off Pakistanis from the national grid translates into additional pressure for those relying on costly traditional power sources. Consequently, stranded electricity providers have escalated their rates further to cover operational costs.
Observant critics finger China-backed energy sector deals for financial stress in Pakistan. Billions of dollars worth of power generation contracts, many involving coal-fired plants, form the basis of this concern, with Pakistan frequently later on repayment debts and engaging in negotiations for debt extensions.
The phenomenon isn't unique to Pakistan; countries such as South Africa experience similar widening energy gaps as the affluent embrace solar. Yet, observers keep a watchful eye on Pakistan, captivated by the swift transition to sun-based energy.
"The situation underscores the need for policy and regulation that aligns with technological progress and evolving economics," says Haneea Isaad, an Islamabad-based energy finance expert at the Institute for Energy Economics and Financial Analysis.
In a candid conversation with our site, Pakistan's power minister Awais Leghari concedes the energy crisis but cites substantial tariff reductions since June 2024, following IMF approval. He also highlights substantial solar uptake in rural Pakistan, where many hitherto unconnected to the grid are now harnessing solar power.
"Pakistan has leapt into a solar revolution," asserts Leghari. "Our energy mix will get cleaner day by day, a feat we are incredibly proud of."
The IMF remains mum on the issue.
Solar's Rise and Its Effects:
Highlights of the solar boom:1. Central to the solar boom is policy support in the form of tax exemptions and net metering, allowing users to sell excess power back to the grid, resulting in over 302,000 net-metering connections generating 4,400 MW of clean electricity[1][4]2. Economic necessity, as burgeoning costs from thermal power contracts and unstable grid infrastructure compel households and businesses to shift to solar panels3. Low-cost Chinese solar panels, accounting for 22 GW imports in 2024, make solar installations accessible across industries and households
Impacts on electrical distribution:1. Decentralization: Rooftop solar installations (e.g., residential solar setup of 10kW) reduces reliance on the grid, shrinking bills and boosting energy security for homeowners2. Revenue shifts: Utilities face dwindling revenues as consumers generate their own power, potentially destabilizing existing tariff structures3. Climate resilience: Solar reduces dependence on imported fossil fuels, reducing emissions and promoting sustainability4. Employment and growth: The sector sparks jobs and enables industries to persevere amid power shortages
- Entrepreneur Saad Saleem, unafraid of rising electricity tariffs, operates under the scorching heat with solar-powered air conditioning, a testament to Pakistan's solar surge.
- In 2020, when the IMF imposed power and gas tariff hikes on Pakistan, Saad Saleem seized the opportunity to invest in solar panels.
- The surge in solar adoption has resulted in a quarter more electricity cost for the average Pakistani, inciting a rush for solar setups.
- In 2021, solar contributed an impressive 14% to Pakistan's power supply, surpassing coal and becoming the third-largest energy source.
- Compared to China, Pakistan's solar energy pie is nearly double the share, positioning it as one of the continent's leading solar markets.
- Despite the attraction of solar panels, many urban middle-class Pakistanis find themselves unable to afford the switch, prompting energy conservation.
- The exodus of affluent Pakistanis from the national grid exerts additional pressure on traditional power suppliers, pushing tariffs even higher.
- Energy experts advocate for policy and regulation that evolve with technological advancements and economic shifts to ensure a sustainable transition to renewable energy, such as solar.
