Study highlights that the country has emerged as one of the leading solar markets within five years
ISLAMABAD:
Electricity prices in Pakistan have risen by 155% over the past three years, with capacity payments and the depreciation of the rupee identified as major drivers, according to a new assessment that underscores the increasing pressure on household finances across the country.
In several areas, electricity bills have overtaken rents, which reflects the intensity of the crisis and forces consumers to look for alternatives. According to a report, expensive grid electricity has forced an increasing number of consumers to switch to solar panels.
The Competition Commission of Pakistan (CCP), in a detailed study of the solar energy sector titled ‘Competitive Assessment of the Solar Energy Market in Pakistan’, has pointed to structural inefficiencies and barriers that limit competition and investment.
The study highlights that the country has emerged as one of the leading solar markets within five years, with installed capacity of 35 gigawatts and imports exceeding 50 gigawatts. Yet it points out that millions of consumers still lack access to electricity.
The commission has recommended urgent upgrades to the transmission network, introduction of smart metering systems and grid automation, alongside a broader transition to renewable energy, noting that Pakistan’s solar energy potential far exceeds its current requirements.
The study observes that most solar energy consumption in the country remains undocumented, while the proliferation of substandard equipment harms both consumers and market integrity. It also warns that Pakistan, which is among the countries most vulnerable to climate change, faces increasing economic losses that could reach up to 6% of GDP by 2050.
Under the existing framework, only limited electricity is produced through net metering that is connected to the grid. However, the report notes that the use of solar cells tends to increase with income level, a trend that is further accelerated by falling prices of solar panels and batteries, making off-grid solutions increasingly attractive.
Highlighting systemic weaknesses, the CCP has identified transmission infrastructure failures, policy ambiguities and product quality concerns as key challenges.
