Pakistan’s solar boom is helping it save billions during the ongoing energy crisis

Pakistan gets almost all its oil and gas from the Middle East, where U.S. and Israeli bombing of Iran have caused crude prices to blow past $150 a barrel and tankers can’t get through the Strait of Hormuz. But it has one edge in the crisis: a rapid, recent shift to solar power.

The country’s solar boom started in the wake of the Ukraine war, when Pakistan couldn’t afford to buy liquefied natural gas and that led to power outages. “It also led to soaring electricity bills,” says Rabia Babar, an energy market analyst at the Pakistan-based nonprofit Renewables First.

Some power bills were as much as 30-40% of people’s income, sometimes more than they were spending on rent. At the same time, the price of solar panels had steeply fallen, with an oversupply from Chinese manufacturers that was easily accessible in Pakistan. And so people started buying and installing solar—often to avoid using grid power.

“You could go to your local bodega, buy a solar panel and charge controller and a battery, and install it yourself,” says Jigar Shah, an energy entrepreneur and investor who previously led the Loans Program Office at the U.S. Department of Energy. “It was so cheap that people were able to do it with discretionary funds, $50 that they had.”

A grassroots DIY movement quickly grew. Self-taught solar entrepreneurs learned about installation and repair on YouTube and in local WhatsApp groups. As people installed solar on their roofs, their neighbors followed. Businesses added solar and batteries on factory buildings. Farmers started using solar pumps, rather than diesel, for irrigation. Cheap solar panels also helped bring power to rural homes that had always been off the grid. Last year, the country was the second-largest importer of Chinese solar panels in the world. Ten percent of the grid shifted to solar in just a few years, driven largely by these small installations.

“When you think about the sheer volume and the population of Pakistan, it certainly is the largest deployment of solar and battery storage to solve energy poverty in the world,” Shah says.

Over the last nine years, the country has imported a massive 51 gigawatts of solar power. (For comparison, that’s more than the entire capacity of power plants on the country’s electric grid.) That’s helped Pakistan avoid spending more than $12 billion on fossil fuel imports, according to a report from Renewables First. This year, as crude prices have surged, the country could save another $6.3 billion. (Pakistan still relies almost entirely on fossil fuels for transportation, as EV adoption in the country is at an earlier stage. )

The transition hasn’t gone perfectly. Because solar grew organically without top-down planning, utilities suddenly lost so much business that they’ve faced financial challenges keeping older infrastructure afloat. The lesson for other developing countries, Shah says, is that utilities should help customers install cheap solar so that the whole system can be coordinated.

But the current crisis is likely to speed up the solar transition. “Consumers who are running on diesel in Pakistan—but not just Pakistan, but Kenya, Tanzania, etcetera—their price of diesel just doubled,” says Shah. “If you’re the guy in Pakistan who still hasn’t switched to solar, you’re probably switching to solar this year.”

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