Amir Saeed

Pakistan leads South Asia in solar energy growth, driven by a significant surge in net-metering installations, but faces challenges in balancing rapid expansion with grid stability and regulatory compliance.

Talking to WealthPK, Ubaidullah Khan, an energy expert at Renewables First, a think tank for energy and environment, said that the power sector of Pakistan has seen a dramatic shift in renewable energy adoption, particularly in solar energy, both from government initiatives and consumer-driven installations. “Over the past two decades, utility-scale solar installations across the country have only reached around 740MW.” “In contrast, net-metered solar installations surged to approximately 3,000MW by 2024.

When factoring in behind-the-meter solar installations, the total capacity exceeds 6,000MW. While solar energy is an affordable and clean power source, its rapid and largely unregulated expansion has introduced significant challenges for grid operators,” he noted. The growth in solar energy capacity across South Asia has been remarkable over the past decade. In India, solar capacity surged from 525MW in 2015 to an impressive 16,000MW in 2024, reflecting a growth rate of 46% annually.

Similarly, Sri Lanka’s solar capacity expanded from 10.28MW in 2015 to 1,000MW in 2024, marking a 66% growth rate. Pakistan, however, has seen the most dramatic growth, with its solar capacity jumping from just 0.36MW in 2015 to nearly 3,000MW in 2024, representing an extraordinary compound annual growth rate (CAGR) of 167%. This rapid expansion highlights the increasing adoption of solar energy in the region, with Pakistan leading the way in terms of growth rate, followed by Sri Lanka and India.

Ubaidullah highlighted that one of the primary concerns is that many consumers are installing solar capacity well beyond their sanctioned loads, often violating net-metering policy guidelines. “This uncoordinated growth has led to a range of technical setbacks for the grid.” “A major issue is the deterioration of power quality, particularly due to a low power factor. During peak solar production hours, excess power injected into the grid by consumers leads to power factor fluctuations, causing inefficiencies in distribution feeders,” he pointed out.

Additionally, reverse power flow has resulted in the overloading of distribution transformers, often leading to transformer burnouts. The absence of reactive power compensation in the grid and at the consumers end along with using substandard inverters for rooftop solar power is creating power quality issues,” he added. The energy expert said that the problem of reverse power flow has become so immense that it is now affecting higher voltage levels with transformers at 132kV substations experiencing negative loading.

“Given these challenges, there is an urgent need for sustainable solutions. Grid modernisation, real-time data monitoring, and advanced control systems must be implemented to enhance grid resilience.” “Additionally, investing in battery energy storage systems at substations can help manage fluctuations and stabilise power supply. Policy reforms are also necessary to ensure that net metering regulations align with grid capacity, promoting responsible solar integration while safeguarding the stability of Pakistan’s power system,” Ubaidullah recommended.

Talking to WealthPK, Farhan Wahid, a green finance researcher at Quaid-i-Azam University, highlighted that Pakistan’s geographical advantages, such as high solar irradiance and long sunny days, make it an ideal location for solar energy projects. According to him, government policies like the National Solar Energy Initiative have played a pivotal role in fostering this growth by promoting solar adoption across various sectors, including residential and industrial users.

However, Wahid warned that policy shifts, such as the proposed transition from net metering to gross metering, could jeopardise this progress. “Under gross metering, consumers would sell all generated electricity to the grid at lower rates and buy back at higher retail prices, significantly reducing the financial incentives for solar investments.”

He emphasised that as the country’s solar energy sector holds immense potential for sustainable growth and energy independence, careful policy adjustments are essential to maintain the momentum. Wahid suggested a balanced approach that retains net metering for smaller consumers while introducing gross metering for larger installations. “This dual strategy could address financial concerns without stifling the sector’s growth.”

Credit: INP-WealthPk