KARACHI: Amid the forty-degree heat that paralysed the coastal city of Karachi in April, Saad Saleem blasted his air-conditioning with near-abandon.
Electricity tariffs have surged, but the affluent entrepreneur has been unbothered since he spent US$7,500 installing solar panels on his bungalow’s roof as part of a solar boom in Pakistan.
Saleem bought his modules two years ago, as the International Monetary Fund and economically beleaguered Pakistan were hammering out a preliminary bailout program. Under the deal, Pakistan sharply raised power and gas tariffs to support struggling suppliers in the heavily-indebted sector.
Pakistanis now pay more than a quarter more on average for electricity, setting off a scramble to install solar modules.
Solar made up over 14 per cent of Pakistan’s power supply last year, up from 4 per cent in 2021 and displacing coal as the third-largest energy source, according to UL energy think-tank Ember. That is nearly double the share in China, the world’s top supplier of solar panels and a global leader in green technologies, and one of the highest rates in Asia, according to Reuters’ analysis of Ember data.
But the explosion in solar uptake has left out many in Pakistan’s struggling urban middle class, who have been forced to cut back on electricity in face of soaring bills, according to interviews with more than two dozen people, including energy officials, consumers and power-sector analysts. Most of the nation’s solar panels aren’t connected to sell excess capacity to the grid, so the benefits of cheap and reliable power aren’t widely shared.
The flight of affluent Pakistanis with solar access from the national grid has dealt a further blow to those relying on pricey conventional sources of power. Electricity companies that lost their most lucrative clients have been forced to additionally hike prices on their shrinking pool of customers to cover operating costs, according to Arzachel, a Karachi-based energy consultancy.
Some observers also blame financial stress in the energy sector on deals Pakistan made with China for Beijing to finance billions of dollars worth of power-generation contracts, many of which involve coal-fired plants. Pakistan is behind on many of the payments and has been in talks with China about extending the time it has to repay the debt.
Countries like South Africa also face widening energy gaps after affluent residents adopted solar power. But analysts are watching Pakistan particularly closely due to the pace at which the nation of 250 million has taken to sun-based energy.
“This could serve as a cautionary tale as to how regulation and policy needs to keep up with technological change and rapidly evolving economics,” said Haneea Isaad, an Islamabad-based energy finance specialist at the Institute for Energy Economics and Financial Analysis.
In an interview with Reuters, Pakistan power minister Awais Leghari acknowledged the energy gap but noted that tariffs have come down significantly since June 2024, when the IMF approved reductions.
He also pointed to heavy uptake of solar by rural Pakistanis, many of whom previously had limited access to the grid. Many non-urban Pakistanis have installed small solar setups to meet their power needs, which are typically far lower than those of their city-dwelling counterparts.
“Pakistan has actually gone through a solar revolution,” he said. “The grid is going to get cleaner by the day, and this is something that we’ve achieved as a nation that we are proud of.”
The IMF did not return requests for comment.
https://www.channelnewsasia.com/sustainability/pakistans-solar-revolution-leaves-its-middle-class-behind-5096111
