Market Trends of Pakistan Solar Energy Industry
The Utility Sector is Expected to Dominate the Market
- Solar energy converts energy from sunlight into electricity directly using photovoltaics (PV) or indirectly using concentrated solar power.
- Due to the falling cost of solar modules and the number of upcoming projects, the utility sector will likely be the most significant part of the Pakistani solar energy market over the next few years.
- The Pakistani government has established lofty objectives like 30% of the nation's power will come from renewable sources by 2030. Through the Alternative Energy Development Board, the government is attempting to construct solar power facilities nationwide to meet these objectives.
- As of 2022, Pakistan's total solar installed capacity was recorded at 1.24 GW, with an increase of 17% compared to 2021. The country's government has proposed several efforts to raise the percentage of solar energy in the country.
- In September 2022, the Pakistani government approved the National Solar Energy Initiative to produce 10,000 megawatts (MW) of electricity through solar energy projects in the following months. The initiative aims to reduce the import bill of costly diesel and furnace oil, thus creating demand in the country's utility sector. Hence, the government will likely develop more utility-scale projects, increasing the renewable energy mix in achieving its targets.
- Based on these factors, the utility sector will likely be the most significant player in the Pakistani solar energy market over the next few years.
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Supportive Government Policies are Driving the Market Demand
- The solar energy initiative would help government buildings, different sectors, and tube wells shift from diesel to solar power. The power plants operating on diesel, coal, and furnace oil will be partially replaced too.
- As of 2022, Pakistan's total solar installed capacity was recorded at 1.242 GW, with an increase of 15.4% compared to 2021. The country's government has proposed a number of efforts to raise the percentage of renewable energy in the country
- In September 2022, the Pakistani government signed the Green Framework Engagement Agreement with Denmark to create stronger collaboration in areas such as climate change mitigation and adaptation and a sustainable green transition, which is expected to boost solar power in the country.
- Solar power is trending toward significant growth as the government targets at least 1 million customers and adds approximately 3,000 MW of solar power through net metering.
- Thus, considering the government initiatives and policies, the Pakistani solar energy market is expected to grow further during the forecast period.
