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ISLAMABAD – Pakistan’s solar share in electricity mix is a mere 1.15 percent, way behind Brazil’s 14.9 percent, China’s 12.4 percent, and even India’s 9.8 percent, due to limited local manufacturing, weak policies, and low investment. The revelation was made by Competition Commission of Pakistan in its report “Unlocking Green Potential; A market Competition Study of Solar Energy in Pakistan 2026.”
The study undertakes a competition assessment of the solar energy sector and focuses on identifying potential market distortions and entry barriers, particularly those arising from import dependence, certification and quality assurance mechanisms, and licensing requirements. According to the study, the global comparison shows that Pakistan is lagging behind countries like China, India, and Brazil in developing its solar energy sector, mainly due to limited local manufacturing, weaker policies, and low investment. China leads the world because of strong government support and a complete domestic supply chain, while India is rapidly expanding its solar industry through incentives that promote local production. Brazil has grown by offering tax exemptions and easy financing to households and businesses. Pakistan, however, still relies heavily on imported solar equipment and has only a small share of solar in its total electricity mix. Nevertheless, net metering, off-grid and increasing private-sector interest show that Pakistan solar market grows and has big potential if policies and long-term support are provided.
Although gaps remain in implementation, grid readiness, and consistency of policy direction, the overall framework demonstrates a growing national commitment to supporting solar energy as an essential component of Pakistan’s sustainable and diversified energy future. The solar energy market has strong potential, but several barriers continue to slow its growth and limit competition. High upfront installation costs, long payback periods, and limited financing options make solar systems difficult to afford for households and small businesses. At the same time, utility-scale solar struggles to compete with traditional power technologies that benefit from long-standing government support, mature supply chains, and hidden cost advantages.
Weak transmission and distribution infrastructure further restricts the expansion of solar energy. The national grid was designed for conventional power and lacks the flexibility, capacity, and smart technologies needed to integrate distributed and utility-scale solar projects. These gaps lead to delays, technical constraints, and lack of investor confidence. Low consumer awareness, widespread availability of substandard equipment, and absence of accredited testing labs also undermine the market. Poor-quality products especially harm low-income users, who often invest their limited savings in systems that fail prematurely. Additionally, delays in reforms such as the CTBCM and frequent policy changes particularly related to net metering and import duties create uncertainty for both investors and consumers.
To reduce its dependence on solar imports, Pakistan can take strong and practical steps to develop its own solar panel manufacturing industry by aligning solar manufacturing with its broader industrialization goals under CPEC. Pakistan can leverage this opportunity and align solar manufacturing with its broader industrialization goals under CPEC. Doing so would not only help meet domestic demand but also lay the groundwork for a solar-equipment export industry. While the import mechanism, clearly mentions the quality related aspects of products, it is general perception in the market that the country receives a variety of products with different quality standards. In fact, as mentioned by one stakeholder, the recent influx of solar panels resulted in several sub-standard imports from China. This has created a challenge of quality control and increased the number of fire accidents.
Absence of solar panels recycling mechanisms has been identified another environmental externalities by the report. The rapid expansion of solar energy in Pakistan and other emerging economies is largely occurring in the absence of adequate recycling mechanisms. As noted earlier, the average solar panel has a lifespan of 25–30 years, after which its output declines by nearly 80 percent, necessitating replacement. Although the current wave of solarization is relatively recent and large-scale recycling needs will emerge only when the first installations reach the end of their operational life, the associated waste challenge appears imminent. Recent studies estimate that cumulative solar photovoltaic waste could reach as much as 78 million tons by 2050.
The report recommended promotion of local manufacturing of solar panels, modernization program to reinforce aging distribution feeders, transformers, and substations, unlocking solar investment through effective CTBCM implementation, extending the benefits of solar net-metering and clean energy incentives to rural areas, and promote battery storage.
NIPCO House, 4 – Shaharah e Fatima Jinnah,
Lahore, Pakistan
Tel: +92 42 36367580 | Fax : +92 42 36367005
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Nawaiwaqt Group | Copyright © 2026
