Pakistan finds itself at a critical juncture, grappling with a mounting debt crisis, soaring energy costs, and persistent power outages. It is now more important than ever for the country to take decisive action and embrace renewable energy sources, particularly solar power. With its abundant sunlight and favorable geographical location, Pakistan possesses immense potential to harness solar energy and address its pressing energy shortage.
Pakistan’s geographical advantage translates into an average of 1 kilowatt (kW) of solar energy per square meter of landmass, available for approximately 6-7 hours each day. This amounts to an astonishing number of sunshine hours ranging from 3000 to 3300 annually. Based on these figures, the National Renewable Energy Laboratory (NREL) estimates that Pakistan has the capacity to generate a staggering 5.5 trillion kW of solar energy annually, which is more than five times the country’s current electricity consumption.
However, there are several obstacles to overcome in order to fully tap into this solar energy potential. Presently, the solar market in Pakistan is still in its early stages, leading to high costs that make solar panels financially out of reach for the general public. To address this issue, the government can play a crucial role by offering subsidized solar panels and implementing easy installment plans. By making solar energy more affordable and accessible, the barriers to widespread adoption can be significantly reduced.
The impact of such measures would be far-reaching. Currently, the cost of a reliable solar panel system, excluding battery backup, typically ranges from PKR 280,000 to 330,000 for a 1 kW capacity system. For larger systems, like 2 kW and 3 kW, costs can vary from approximately PKR 530,000 to 800,000. It is important to note that the inclusion of battery backup can increase the overall cost by almost PKR 70,000 per kW for the aforementioned solar panel systems. These price levels restrict the affordability of solar panel systems to the upper and upper-middle class segments of the population.
To encourage broader adoption among the general public, the government can take the initial step of offering subsidized solar panels or implementing accessible installment plans. This would not only increase the number of households, businesses, and farmers using clean and renewable energy sources, but also reduce the dependence on traditional fossil fuel-based electricity generation. Consequently, this would lead to a lower carbon footprint and have a positive impact on the environment.
Moreover, making affordable solar panels widely available would help alleviate Pakistan’s persistent energy shortage. Despite a high electricity access rate of 99%, the country still faces significant challenges in providing sufficient and reliable electricity to its population. Urban areas experience 8-10 hours of power outages daily, while rural areas endure approximately 18-22 hours. The root cause of this problem lies in the heavy reliance on crude oil for electricity generation, leaving the economy vulnerable to sudden changes in oil prices. This burden has not only hindered GDP growth in recent years but has also significantly increased the cost of electricity. As a result, Pakistan’s energy gap stands between 5-8 million kW, with an anticipated growth rate of 6-8% annually. By promoting the use of solar energy, the overall demand on the national grid would decrease, alleviating strain on the existing energy infrastructure. This, in turn, would result in a more stable and reliable electricity supply, reducing the frequency of power outages and load shedding that currently afflict the nation.
Furthermore, embracing solar energy adoption in Pakistan would foster the development of the local solar industry. Incentives and support for manufacturing, installation, and maintenance of solar panels would create employment opportunities and drive economic growth within the renewable energy sector.
Pakistan can look to its neighboring countries, such as India and China, for valuable insights into transitioning to solar energy. Both nations, which were heavily reliant on fossil fuels for energy generation, have made remarkable progress in adopting solar power. As of 2022, China has accumulated a cumulative solar capacity of 393 million kW, while India has reached 63 million kW, thanks to the provision of subsidized solar panels to the public.
Several private and government initiatives are already underway in Pakistan to enhance access to affordable solar panels. The successful deployment of four solar energy projects by the Alternative Energy Development Board (AEDB) in February 2021 is a notable example. These projects collectively have a capacity of 250,000 kW and generate 494 million kWh of electricity annually. Additionally, the government has proposed exempting solar equipment and raw materials from taxes and duties to facilitate the establishment of solar industries.
The Sindh Solar Project, funded by The World Bank and inaugurated in February 2023, aims to provide subsidized panels to around 200,000 houses in both rural and urban areas of 10 districts in the province. A subsidy of $160 per house in rural areas and $110 in urban areas is to be provided. The project extends further to the deployment of Solar Home Systems (SHS) in areas with limited or no access to electricity.
Moreover, the State Bank of Pakistan has introduced a Solar Financing scheme, offering flexible monthly installments at a nominal mark-up rate of 6% per annum. This scheme enables a larger segment of the population to embrace solar energy solutions, thus accelerating the transition towards clean and sustainable energy sources in Pakistan.
The examination of these initiatives reveals the immense potential that lies ahead. With increased accessibility through subsidies and installment packages, solar panels are paving the way for wider adoption of solar energy solutions in Pakistan. By embracing and maximizing the benefits of subsidized solar panels, the country is on a path towards a more prosperous and environmentally friendly future. As Pakistan advances towards a sustainable energy landscape, each step taken brings us closer to a brighter tomorrow.
The writer is a Project Consultant at World Bank.