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On October 5, ARY News reported that electricity generation had fallen at several power plants, pushing the country's supply shortfall beyond 4,000 megawatts (MW). The shortage led to longer and more frequent power cuts across several regions. In Lahore and other parts of Punjab, consumers were reportedly facing two to three hours of load-shedding.
For a country already struggling with high debt, inflation and rising household expenses, the power shortages have added to the economic strain.
But there is an interesting contradiction here. Pakistan has witnessed a remarkable solar boom over the past two years. Millions of households, farms and businesses have increasingly turned to rooftop solar panels and batteries to escape expensive electricity tariffs and unreliable power supply.
So, how can a country that is generating more solar power than ever still struggle to keep the lights on?
Let's take a closer look.
Pakistan's solar revolution in just two years
The scale of Pakistan's solar expansion is striking.
According to energy think tank Ember, electricity demand in Pakistan increased by 21%, or 33 terawatt-hours (TWh), between FY23 and FY25. During the same period, electricity generated through distributed solar systems more than tripled, rising from 15 TWh to 51 TWh.
In other words, solar power met the entire increase in electricity demand during those two years. Electricity generated by the conventional grid, meanwhile, declined 3%.
The share of distributed solar in Pakistan's electricity mix nearly tripled, rising from 10% to 28%, the report said.
Pakistan added 27 gigawatts (GW) of distributed solar capacity in just two years. That is roughly equivalent to the combined capacity of all the coal, gas and oil-fired power plants the country has ever built.
What explains this sudden shift?
Expensive grid electricity, frequent power cuts, a weakening currency and cheaper solar panels have made solar an increasingly attractive option. Pakistan has consequently become one of the world's largest importers of solar panels as consumers look for alternatives to the conventional electricity network.
The economics are compelling, too. A residential solar system with a medium-sized battery is estimated to generate electricity at around PKR 20 per unit, compared with an estimated PKR 40 per unit for grid electricity.
The shift is changing how different sectors consume energy.
Farmers are using solar-powered pumps instead of relying on diesel or grid electricity for irrigation. Industries are turning to solar to reduce their dependence on expensive gas and coal. Households are installing rooftop panels to bring down electricity bills and avoid load-shedding.
Commercial establishments, too, are meeting more of their electricity requirements through solar rather than relying entirely on the grid.
Why cheaper solar hasn't solved Pakistan's power crisis
Here is where things get complicated.
When households and businesses generate their own electricity, they buy less power from the grid. But the cost of running Pakistan's conventional power system does not automatically fall when grid consumption declines.
The government has long-term agreements with power producers that require it to make payments for the electricity generation capacity available to the system. These are known as capacity payments.
Even when thermal power plants are not operating at full capacity, these contractual payments can continue. As more consumers shift to solar, fewer people are left to share the cost of maintaining the conventional electricity network.
The Institute for Energy Economics and Financial Analysis (IEEFA) has warned that the growing adoption of solar panels and batteries could leave conventional power plants underutilised, adding to the financial burden on consumers who continue to depend on grid electricity.
The problem is compounded by what is known as circular debt.
Simply put, circular debt is the unpaid money that builds up across Pakistan's electricity supply chain when power distribution companies fail to collect enough from consumers to pay power producers and other suppliers.
Pakistan's circular debt stood at PKR 2.4 trillion, or around $8.6 billion, in June 2024, according to the National Electric Power Regulatory Authority's State of Industry Report 2024.
This creates an increasingly unequal system. Consumers who can afford solar panels and batteries are reducing their dependence on expensive grid electricity, while those who cannot afford the initial investment remain exposed to high tariffs and the costs of the conventional power system.
The grid is another major problem
Pakistan's electricity crisis is not just about how much power the country can generate. It is also about whether that electricity can be delivered reliably to consumers.
A 2025 World Bank assessment highlighted a major mismatch between the country's electricity generation capacity and its transmission infrastructure.
Between 2014 and 2023, Pakistan's surplus generation capacity, excluding intermittent renewable sources, ranged from 36% to 70%. In other words, the country often had more conventional power generation capacity than it could fully use.
The assessment also found that the capacity of the grid's substations was substantially lower than the country's installed power generation capacity.
This is an important distinction. Having enough power plants does not necessarily mean electricity can reach homes and businesses. Without adequate transmission lines and substations, available electricity can remain stranded.
The government is attempting to address some of these problems.
In July 2026, the World Bank approved $375.9 million for Pakistan's Grid Stability Enhancement Project. The programme includes installing grid-stabilisation equipment at three 500-kilovolt substations and upgrading 26 other substations.
According to the World Bank, the project could help bring 640 MW of currently curtailed wind power onto the grid, allowing Pakistan to make better use of its 1,840 MW of wind capacity in the south. It will also support around 491 MW of planned private-sector renewable energy projects.
Solar is saving Pakistan billions on fuel imports
There is another important benefit to Pakistan's solar expansion: lower dependence on imported fossil fuels.
The Centre for Research on Energy and Clean Air (CREA), in an analysis published in April 2026, estimated that Pakistan avoided more than $12 billion in oil and gas imports between 2021 and February 2026 because of solar adoption.
The report estimated that the country could save another $6.3 billion by the end of 2026, depending on global energy prices.
As households, farms and factories increasingly generate their own electricity, demand for imported liquefied natural gas (LNG) has also fallen. Some contracted LNG shipments have consequently been diverted to international markets.
Pakistan's State Bank reported that the country's energy import bill declined 5.8% in FY25, while LNG import volumes fell sharply. It attributed the lower LNG demand to reduced consumption by the power sector and industry.
However, petroleum import volumes remained broadly unchanged. Lower global oil prices also contributed to the decline in the overall import bill.
Yet, despite the savings from solar, electricity shortages have continued.
In mid-April 2026, the Ministry of Energy's Power Division said a sharp fall in hydropower generation had created an estimated electricity shortfall of around 4,500 MW during peak hours.
A ministry spokesperson said hydropower output had fallen by nearly 1,991 MW overnight, forcing distribution companies to extend power cuts.
Gas-fired power generation has faced difficulties, too. Several media reports suggested that LNG-based power plants with a combined capacity of 6,000 MW remained largely idle amid disruptions to LNG imports linked to the Middle East war.
This shows why installing more solar panels alone cannot guarantee uninterrupted electricity supply. Pakistan still needs reliable backup generation, adequate fuel supplies and a grid capable of distributing electricity when consumers need it.
Can Pakistan fix its power system?
Pakistan's experience offers an important lesson about the difference between generating more electricity and fixing an electricity system.
Solar power has helped households and businesses escape expensive grid electricity. It has also reduced the country's dependence on imported fuels and met the entire increase in electricity demand between FY23 and FY25.
But the financial obligations of conventional power producers remain. So do transmission bottlenecks, fuel supply disruptions and the mounting costs of maintaining an ageing electricity network.
Pakistan has committed to achieving a 60% renewable share in its electricity mix by 2030, according to the World Bank.
The country's solar revolution is already reshaping its energy economy. The challenge now is to ensure that the conventional power system can keep pace with this transition.
After all, a country cannot solve its electricity crisis simply by producing more power. It also needs a system that can deliver that power reliably, affordably and to everyone.
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