Solar Owners Are Rapidly Breaking Pakistan’s Costly Power Plant Business Model

Pakistan's national power grid is grappling with a significant challenge as more households and businesses transition to solar energy. Electricity demand has plummeted by 8.66% year-on-year, according to official documents obtained by ProPakistani. Distribution companies (DISCOs) reported a sharp decline in electricity sales between April and June, with some experiencing a drop of up to 10%. This trend is primarily attributed to the increasing popularity of solar systems among domestic and commercial users.

The lower electricity sales are placing a heavier burden on consumers, as the fixed power generation costs are now spread over a reduced volume of electricity consumed. In April, the Islamabad Electric Supply Company (IESCO) saw a 10.77% decline in electricity sales compared to the same period last year. This decline continued in May, with a 3.55% decrease, and in June, it reached 6.29% year-on-year.

The most significant drop was observed among residential consumers, with IESCO's residential electricity sales falling by 19.69% in April, 7.92% in May, and 5.72% in June.

Commercial consumers also reduced their reliance on grid electricity, with sales decreasing by 6.85% in April, 3.80% in May, and 1.85% in June. Overall, IESCO recorded a 16% decline in electricity demand during the April-June quarter, with demand year-on-year falling by 16% in April, 8% in May, and 2% in June.