According to the “Global Electricity Review 2025”, a report released by British energy think tank Ember, Pakistan imported 17 gigawatts (GW) worth of solar panels in 2024, more than double its imports in 2023, making it one of the world’s fastest-growing solar energy markets. Pakistan imported $377 million worth of solar panels throughout 2023. In the 17 months since, imports soared to $3.1 billion, including $1.1 billion in the first five months of 2025 alone; a few months later, this now amounts to $1.5 billion. It has now become the third-largest importer of solar panels globally with 25 GW of solar panels.
It is known that 32,000 MW of solar power was imported in the last five years, and 6,271 MW was used in net metering. This information was shared by the FBR in one of the Senate Standing Committee Meetings on Finance and Revenue. It was stated that 13,000 MW of solar panels were not installed anywhere at that time, adding that 6,506 MW was used in non-net metering, and 5,521 MW of solar panels were used off-grid. Off-grid solar installations are estimated at 13,000 MW, based on satellite imagery.
Earlier this year, a Senate panel revealed that over Rs 110 billion in fraud and money laundering occurred through solar imports by 80 companies, some of which were found to be fake. The FBR uncovered over-invoicing and suspicious transactions, with Rs 69 billion flagged for over-invoicing. Consequently, the FBR filed FIRs against 13 companies involved in fraudulent activities. Additionally, Rs 18 billion was illegally transferred abroad.
Lahore is reported to dominate the net-metering landscape, accounting for more than 25% of all connections nationwide. According to NEPRA’s State of Industry Report, the total number of net-metering consumers in the CPPA-G system was over 56,000 as of 30 June 2023, which increased by over 33% in comparison to the preceding year, with the highest number of domestic consumers in LESCO’s territory, calculated to be over 17,000.
The State of Industry Report 2024 shows the number of net-metering customers in various DISCO territories as well as their net import-export (kWh). However, a discrepancy in the net-off figure of FESCO shows an erroneous mistake and hence an oversight by the regulator, as it should have been 196,363,446 instead of 67,132,835.
Urban and rural net metering divide – two distinct paths
According to the March 2023 Census, it was ascertained that 8% of households rely on solar as their primary source of energy, rising to 11% in rural areas. In rural Balochistan and Sindh, the shift is even more dramatic, with 34% and 22% of households, respectively, using solar. Punjab and urban Pakistan trail behind. Pakistan’s energy transition is unfolding along two distinct paths: a rural, off-grid expansion driven by necessity, and an urban, grid-connected solar boom driven by policy silence. What links both trends is a stark lack of strategic planning.
The Census found that national grid access had dropped to 84% of households, compared to 88% in 2017. While urban access remained largely steady, declining slightly from 97% to 95%, the change in rural areas was significant, with grid connectivity falling from 82% to 77%.
Non-adherence to grid/distribution codes
Substandard and non-standardised panels and equipment pouring into the market are a red signal for grid stability simultaneously. Often, these questionable solar panels, along with those installed beyond approved capacity, become a cause for voltage fluctuations and grid issues. This implies strict adherence to Grid/Distribution codes, ensuring system stability at the common point of coupling is the responsibility of the solar generator.
The world has evolved with regard to equitable best practices, while we are still arguing about buyback rates
Solar waste – solar panels may not be as green as their associated energy
Solar panel waste poses significant environmental challenges due to the toxic materials, such as lead and cadmium, found in panels. When improperly disposed of, these substances can leach into the soil and groundwater, causing pollution and health risks. Additionally, as solar energy adoption grows, so does the volume of waste, with global projections for developed countries indicating that by 2035, discarded panels will outweigh new installations, leading to massive landfill accumulation. Pakistan, given its status as the third-largest solar panel importer, will not be left behind.
While solar panels typically last 25 to 30 years, their efficiency degrades by about 0.5% to 1% per year, meaning after 30 years, they may still function at 80–90% of their original capacity. With more panels reaching the end of their lifespan, managing their waste and establishing effective recycling systems will become a growing challenge for the power sector and the country at large.
With the growing adoption of solar panels in Pakistan, it is essential to develop an effective solar panel recycling system. Pakistan’s rapid growth in solar energy adoption makes it a future hotspot for solar waste, and proactive measures should be taken now to manage it responsibly.
Global best practices and recommendations
The world has evolved with regard to equitable best practices, while we are still arguing about buyback rates. California has shifted from net metering to a net billing regime under NEM 3.0, where excess solar energy is paid at a much lower avoided-cost rate rather than the retail price. This has reduced export compensation by about 75%, pushing consumers to use more of their solar power directly. Other countries, such as Australia and Vietnam, are also adopting Time-of-Use (TOU) tariffs to better manage solar generation.
Similarly, the U.S. and Germany allow solar prosumers to earn from ancillary service markets by supporting grid operations. The Distributed Divide study recommends differentiated Feed-In Tariffs (FiTs) to improve integration, for example, lower daytime FiTs (~PKR 12/kWh) and higher nighttime FiTs (~PKR 25/kWh). Distribution companies must add the element of grid O&M and capacity, which grid customers also pay for.
It also stresses updating the Distribution Code to handle growing Distributed Energy Resources (DERs), enable smooth bi-directional power flow, and introduce controls for oversupply and curtailment to maintain grid stability as solar penetration increases.
Solar battery storage systems need to be encouraged to help prosumers store excess solar energy for later use, reducing dependence on grid power during non-sunny hours. This would reduce grid stress, especially in the evenings when solar generation drops but demand is high. At the same time, the regulator must enforce stricter adherence to grid/distribution codes to ensure that only certified, standardised solar panels and systems are installed.
There is also a dire need to install grid-based solar energy projects to make power affordable and sustainable. KE’s solar projects in the pipeline aim to serve this purpose and are planned to be installed in Sindh and Balochistan; a quick policy decision will help facilitate the next steps. Meanwhile, the Letter of Intent has been issued for its hybrid project in Dhabeji.
The Distribution Code needs to be updated to handle the integration of Distributed Energy Resources (DERs). This includes ensuring that solar energy generation is effectively integrated into the grid with bi-directional flow and implementing curtailment strategies to prevent oversupply and maintain grid stability as solar penetration increases.
With the economy already stabilised in this regime, the power sector too needs correction, something which the Power Division is already charting out and has achieved substantially. Now is the time to accept the revision in buyback rates, as it has been proposed since the start of the year. On the contrary, the current system is leading to significant financial strain on grid customers, particularly those who are not able to afford solar.