Solar prices plummet in Pakistan due to oversupply, rising tariffs

ISLAMABAD: Solar panel prices in Pakistan drop significantly, with the cost of a 580-watt A+ category panel falling form Rs21,000 to Rs16,965.  

The decline has been attributed to lower temperatures and increased cold intensity, which has reduced energy demand during the winter months.

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An oversupply of solar panels from China has also made solar energy more affordable for consumers and businesses.

 According to the World Economic Forum, Pakistan’s rapid shift to solar energy is largely driven by market forces rather than political support.

The country of 240 million witnessed a spike in renewable energy   adoption, particularly solar power, as grid electricity tariffs rose by 155 per cent over the past three years.

Pakistan has become the sixth-largest market in the world for solar energy.

The transition to solar energy occurred with minimal political intervention. Instead, external pressures played a huge role. China’s overproduction of solar panels has lowered costs globally.

The lower cost provided a perfect opportunity for beleaguered Pakistani public tired of escalating energy costs and load shedding, to easily make the switch.

The World Economic Forum reported that in the first half of 2024 alone, industrial, agricultural and residential sectors of Pakistan adopted solar energy.

Chinese solar imports total 13 gigawatts (GW), with expectations to reach as much as 22 GW by the year’s end.

As more consumers disconnect from the national grid, the resulting decline in demand, however, did increase costs for those who remain connected.

The International Energy Agency reported that while Pakistan’s per capita electricity consumption grew by 87 per cent from 2000 till 2022, over 40 million people still lack electricity access.  

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The proper ‘foundation’ for Pakistan’s solar energy industry was established with the introduction of China’s Belt and Road Imitative (BRI).