Between 2021 and 2024, electricity grid tariffs in Pakistan rose 155 percent. By 2024, the country had become the world's largest importer of Chinese solar panels. The two numbers aren't coincidental. Rooftop solar gave households a practical exit from an increasingly unaffordable grid, and the economics shifted fast enough that some lower-income families dipped into savings to make the switch alongside wealthier households. Those who converted early have seen significant results: one factory owner described his monthly electricity bill dropping from around 100,000 rupees to nearly zero. LNG is a meaningful share of Pakistan's generation mix, and the ongoing US-Iran conflict has added further pressure to a grid that was already strained before the war began.
The benefits are concentrated among people who own the buildings they occupy. Apartment residents have no viable path to rooftop solar, and nearly 90 percent of villages in Balochistan -- Pakistan's most sun-rich province -- have no connection to the main electricity grid at all. Some communities there have operated private solar systems for years, powering school computer labs and university facilities, without state support. The government's response to the solar surge has been restrictive: it introduced taxes on imported solar panels, taxed battery imports from China, and cut the solar buyback rate -- the payment households receive for selling surplus power back to the grid -- by 60 percent. Officials say the policy protects grid consumers from cost-shifting; critics say it protects utility revenue.
The buyback rate cut hits existing solar owners directly. Households that sized their systems partly around that income stream now receive significantly less for the same generation. Battery import taxes compound the problem: storage is the component that makes solar useful during planned outages, which are one of the primary drivers of adoption in the first place. Economists cited in the report expect that once the full energy cost increases from the conflict pass through to electricity rates, a new wave of people will seek solar access. The gap between those who can afford the upfront installation cost and those who cannot is expected to widen, with policy doing little to subsidize access for lower-income households who need it most.
Bottom line: Pakistan's solar story is two stories running in parallel. One is a private market responding faster than anyone planned. The other is about what happens when that market isn't accessible to everyone equally, and the government responds by taxing the thing people are running toward rather than meeting them there.