Rooftop solar at heart of B200bn energy plan

Lahore, Karachi and Peshawar may be awash in blue solar panels adorning rooftops, from small factories to housing colonies. Yet, many Pakistanis argue that the nation is undergoing an energy transition. However, the question remains whether residents are merely seeking an alternative to high tariffs or if the national power system is truly being rebuilt.

While installing a rooftop panel and modernizing a nationwide electricity system are related endeavors, they are distinct projects. One is a household decision, while the other is a decade-long endeavor focused on replacing the grid's foundations with cleaner, cheaper power sources. Despite significant progress in the former, Pakistan has yet to make substantial strides in the latter, leaving the energy debate stalled.

Properly speaking of an energy transition implies replacing the system's core components—generation, transmission, storage, and markets—rather than simply adding panels atop an outdated infrastructure. This shift could cut fuel imports, reduce emissions, bolster energy security and eventually lower costs for all grid-connected consumers.

In Pakistan, rooftop solar adoption has been rapid but not necessarily indicative of the broader transformation. Research by PRIED suggests distributed rooftop capacity ranges from 33 to 38 gigawatts, chiefly through individual decisions instead of systematic planning. Despite this, most new installations now aim to serve the building and are often coupled with batteries for self-consumption.

However, the impact is mostly observed at the local level, with minimal influence on the national transmission network. The paradox lies in the fact that as more Pakistanis generate their own power during the day, the grid must continue to maintain existing plants, wires, substations and reserves to cater to the rest of the population.

This leaves distribution companies with substantial fixed costs, despite a shrinking customer base—a situation that does not change simply because it remains unseen. While utility-scale solar, directly feeding into the national grid, is crucial, it is still absent. Located in solar-rich areas like southern Punjab, Balochistan, and Sindh, utility-scale plants can be connected to the transmission backbone, offering forecasts of production and enabling the grid to adapt accordingly.

Unlike scattered rooftop installations, utility-scale solar can displace imported coal, furnace oil, and LNG at decreasing costs, benefiting not only households with their own panels but also those still paying the standard tariff. Successful examples exist worldwide, including China, India, Australia, and the UAE, where utility-scale and rooftop solar coexist, while thermal generation declines rather than disappears abruptly.

However, achieving this requires storage. Solar power is a daytime resource in a system that needs energy around the clock. Integrating battery storage alongside utility-scale plants can store power during the evening peak, absorb sudden drops when clouds appear, and provide frequency regulation and reserve capacity typically provided by thermal plants.

This approach allows the grid to accommodate a larger share of renewables without blackouts amid weather fluctuations. Therefore, the missing elements include a functioning trading market, expansion of transmission to solar-rich areas, timely procurement of storage, and credible financing terms. Pakistan has already seen a substantial surge in rooftop solar capacity, but a more comprehensive energy transition requires addressing these overlooked yet crucial aspects.