It depends on how you look at it. Edward De Bono, the celebrated motivational writer and speaker, had once remarked, “Sometimes the situation is only a problem because it is looked at in a certain way. Looked at in another way, the course of action may be so obvious that the problem no longer exists.” Pakistan’s dash for distributed solar is such a case and needs to be re-examined by the Power Division and NEPRA.
There are circles (mostly in the government) who had a rude awakening lately to the serious threat that the phenomenal growth of distributed solar in Pakistan poses to the power grid, particularly in recovering the huge capital investments already made. They are trying to resist the solar tide by removing whatever incentives the government had provided to promote renewables. Revising the “Net-metering Regulations 2015” and increasing fixed charge levies on consumers paying it already, and expanding it to small commercial and residential consumers are two examples of these efforts.
It is a boon for some savvy entrepreneurs who are always looking for juicy business deals. They found electricity consumers reeling under relentless tariff hikes, seeking some relief. It was a godsend opportunity for them to make quick and hefty profits. Exploiting the country’s incentives for renewables, declining prices of Chinese PV panels, and no proper quality control checks, they fell head over heels in importing Chinese panels and allied components, raising it from a meagre 2,000 MW in 2020 to a mighty 50,000 MW by 2025, making Pakistan the third largest importer of Chinese PV panels globally.
Living up to our history, the government kept a blind eye to the strides distributed solar was making until it reached alarming levels. Some in the government still seem in a “denial mode”, downplaying this trend as a luxury of the rich and are hoping to check it using lame excuses and painting consumers on net-metering as greedy profiteers.
In the presence of clauses 5 and 6 of NEPRA Net-metering Regulation 2015, one wonders who the nation should blame for the alleged adverse impacts of net-metered connections: the consumers on net-metering, DISCOs, Power Division, or NEPRA?
(5) In case the initial review reveals that the proposed facility is not technically feasible, the Distribution Company shall return the application and communicate the reasons to the applicant within three working days after the completion of the initial review.
(6) If the Distribution Company is satisfied that the applicant qualifies as a distributed generator, then the Distribution Company and the applicant shall enter into an agreement within ten working days and the Distribution Company shall send a copy of the agreement to the Authority within seven working days of the signing of the agreement.
“Bane or boon” may be two extremes of looking at Pakistan’s dash for distributed solar, but it is certainly a case of “missed opportunities” as further discussed below.
DISCOs also need to treat distributed solar not as foes but as friends to their efforts to serve consumers with reliable and affordable electricity
Different sources place different estimates on the quantum of distributed solar uptake in Pakistan that range between 33 and 50 GW. A recent joint study by Policy Research Institute for Equitable Development (PRIED) and Transition Zero, combining field surveys with high-resolution satellite imagery, estimated the total distributed solar capacity in Pakistan to have reached 33,000 MW. Only 6,000 MW (18%) of this capacity is on net-metering. Behind-the-meter installations (tied but not interactive with the grid) make up 57% of this capacity, and off-grid the rest 25%.
Another recent study by Renewables First (RF) revealed that the phenomenal growth of distributed and behind-the-meter photovoltaic installations was not even reflected in the reporting system of the country. RF estimates that these facilities can generate 19,000 GWh (almost 13% of the total sales and 19% of the gross generation in Pakistan last year). By June 2025, Pakistan had already spent USD 7.4 billion on photovoltaic panel imports from China.
Exact figures may differ slightly, but studies from around the world corroborate that a kilowatt-hour saved or supplied at the consumer site avoids two to three kilowatt-hours equivalent of primary energy need upstream. It is arguably a case of “missed opportunities” because distributed solar held great potential in serving Pakistan’s energy needs. It is perhaps the only technology that can contribute directly to the country’s three strategic goals in the power sector: affordability, security, and sustainability, laid down in the “National Electricity Policy (NEP) 2021”.
Distributed solar can provide numerous benefits to the grid, economy, and the country. These include displacing generation from fossil fuels, reducing the country’s dependence on fuel imports, avoiding the need for new transmission and distribution (T&D) capacity, reducing losses in the grid, providing alternative sources for grid support, reducing pollution, easing transmission constraints, enhancing security, industrial development, job creation, and many more.
Several factors have prevented Pakistan from making structural changes that had become inevitable for dealing with new market challenges. These include: (a) leadership’s failure to look beyond its success in the next general elections and preferring quick and politically expedient solutions; (b) failure to follow a structured and institutional process for policy formulation; (c) failure in keeping its plethora of rules and regulations in step with new market realities; and (d) institutional inertia and bureaucratic mindsets in executing in true spirit whatever good advice came to them from the government.
We may have missed these opportunities, but fortunately, we have not lost them completely. We can still recoup many of these, provided we are ready to take some bold steps. All we need is to provide distributed solar and similar technologies a fair deal and an objective framework for proving their viability against conventional technologies. A few must-do actions are listed in the ensuing paragraphs.
The government needs to set a concrete and time-bound roadmap for achieving the strategic goals already set in the NEP (2021). It must treat energy supply and delivery as a business and let go of its tight control. It should also avoid any meddling in the functioning of the energy sector.
The government should institutionalise the energy policy-making process and make it objective, fair, and consultative. Energy policy formulation should be integrated not just within the energy sector but with other sectors of the economy as well. The government should also set a clear hierarchy among different policies and ensure their consistency and stability.
NEPRA needs to provide an enabling framework to encourage the deployment of distributed solar and other similar technologies in the distribution systems. The existing framework in which the viability of new supply options is evaluated at the generation busbar is skewed towards conventional technologies. This should move to either the consumer site or the nearest substation.
NEPRA’s existing tariff determination approach must also change. Its focus on determining the cost of supply exclusively does not motivate DISCOs to improve efficiency and performance. It should be replaced with a new framework that takes into account not just the cost of any new option but its benefits also. The benefits of distributed technologies start accruing in the medium to long term, which must be considered by adjusting the assessment time horizon sufficiently long to provide a level playing field to them.
DISCOs also need to treat distributed solar not as foes but as friends to their efforts to serve consumers with reliable and affordable electricity. They need to not just encourage but aggressively seek contributions from distributed solar and similar technologies.
Without a facilitative regulatory framework and business environment, distributed solar will still get “connected” with the grid but will not be “integrated” optimally, depriving the grid, electricity consumers, and the country of the full range of their benefits.