ISLAMABAD: Pakistan has the potential to generate up to 40 gigawatts of solar power, according to the World Bank — a capacity that could boost the renewable share of the national energy mix to 60% by 2030. Yet, despite this vast potential and global momentum toward clean energy, the country faces a policy dilemma driven largely by its dependence on fossil fuels.
For decades, Pakistan has relied heavily on oil and gas for power generation. However, falling solar technology prices and rapid adoption have begun shifting the energy landscape. The government introduced the net metering (NEM) policy enabling consumers with rooftop solar systems to export surplus electricity to the grid in exchange for billing credits, encouraging widespread solar uptake.
Pakistan also approved the Alternative and Renewable Energy Policy 2019 to accelerate renewable energy investment. Still, implementation challenges persist under the National Electricity Policy 2021.
The government’s reported plan to slash the solar buyback rate from Rs21 per unit to Rs11 has sparked strong backlash — especially given that fossil fuel–based electricity costs nearly Rs60 per unit. With 3,000MW already installed under net metering, many see the proposed reduction as an attempt to protect the revenue streams of independent power producers (IPPs) amid rising solar adoption. Critics argue that regulatory bodies such as Nepra appear more aligned with IPP interests than with consumers.
The surge in solar demand has disrupted the government’s capacity payment model, prompting IPPs to push for longer payback periods — from 18 months to as long as 10 years. This contradicts global trends: the EU has raised its 2030 renewable target to at least 42.5%, with ambitions to hit 45%, while other advanced economies are rapidly expanding clean energy deployment.
Pakistan has committed under SDG-7 and the UNFCCC to ensure sustainable and modern energy access, transition to 60% renewables and achieve 30% electric vehicle penetration by 2030. It has also pledged to phase out coal imports and pursue nature-based climate solutions.
Solar net metering remains a key driver of this transition, enabling households and businesses to generate their own clean energy. Reducing the buyback rate at this stage risks slowing progress, undermining Pakistan’s Paris Agreement commitments and contradicting global best practices. Countries like Australia are now offering free solar electricity during certain hours, while the EU has already surpassed several renewable milestones ahead of schedule.
Experts argue that Pakistan must collaborate with consumers, climate ministries and energy specialists rather than impose unilateral policy changes. Strengthening renewable adoption will not only reduce reliance on costly fossil fuel imports but also align Pakistan with global climate goals.
A holistic review incorporating technical, financial and environmental perspectives is essential to ensure that policy decisions support — rather than hinder — the country’s clean energy future.
Story by DR MUHAMMAD KHURSHID
