Pakistan says rooftop solar output to exceed grid demand in some hubs next year | Reuters

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REUTERS/Akhtar Soomro/File Photo[1/3]A worker unloads solar panels from a vehicle at a market, in Karachi, Pakistan March 26, 2025. REUTERS/Akhtar Soomro/File Photo Purchase Licensing Rights, opens new tabSummaryCompaniesCountry's emissions and some power bills are downElectric utilities struggle with weak demand, high debtClimate ministry says Lahore could see negative power demandBELEM, Brazil, Nov 22 (Reuters) - Pakistan's rooftop solar generation will for the first time exceed power demand on the country's electrical grid during daytime hours in some major industrial regions next year, a senior government official told Reuters.The outlook reflects a record boom in the country's solar panel installations in recent years that has delivered lower emissions and reduced power bills for some, but also disrupted the finances of debt-laden utilities due to a protracted decline in demand for grid-based electricity. Sign up here."Pakistan will experience negative grid-linked demand during certain daytime hours because behind-the-meter solar is offsetting grid consumption completely," Aisha Moriani, secretary of Pakistan's climate change ministry told Reuters on the sidelines of the COP30 climate conference in Brazil.While regions in Europe and Australia sometimes experience negative electricity prices due to solar oversupply and low demand, Pakistan would be among the first major emerging markets where rooftop generation could exceed grid-linked demand in major areas entirely for lengthy periods."Negative demand" is likely in the northwestern city of Lahore, which has some of the country's highest solar penetration, followed by Faisalabad and Sialkot, where industrial areas are driving solar adoption, she said.Power cuts and tariff hikes have pushed Pakistan's 250 million people to accelerate solar adoption and made it the world's third-largest panel importer, with solar's share in generation exceeding its neighbour China.The south Asian nation will see more frequent negative-demand events, especially during bright summer afternoons, industrial holidays and moderate temperature days with high solar output, said Moriani, Pakistan's lead negotiator at COP30."Pakistan's challenge is not whether renewable energy will grow, it is how fast the grid, regulation, and market design can evolve to keep pace," she said.The south Asian nation is planning to introduce new tariffs for large solar users, as well as changes to fee structures to ensure businesses with panels share equally in the costs of grid upkeep, she said.Pakistan's grid-linked power demand is expected to grow 3-4% this year, slower than historical averages. Next year, consumption is expected to rise more steeply but could be impacted more by higher solar use, Moriani said.The surge in solar use has also pushed Pakistan to renegotiate its LNG contracts with top supplier Qatar and cancel cargoes supplied by Italy's Eni, Moriani said.Pakistan is looking for lower prices, flexible delivery schedules and potentially fewer cargoes, she said.While there were no formal negotiations with Qatar at COP30, the event provided "diplomatic space for engagement with energy ministers and commercial representatives," she said."The key aim is to align Pakistan's gas import strategy with fiscal space, demand outlook, and seasonal patterns. Pakistan seeks stability and affordability, not expansion of LNG dependency."Reporting by Sudarshan Varadhan; Editing by David GregorioOur Standards: The Thomson Reuters Trust Principles., opens new tabSuggested Topics:Carbon MarketsSustainable MarketsRegulatory OversightGovernanceGrid & InfrastructureShareXFacebookLinkedinEmailLinkPurchase Licensing RightsSudarshan VaradhanThomson ReutersSudarshan currently reports on the evolving energy landscape in Asia, as the region tries to strike a balance between ensuring reliable electricity supply and fighting climate change. In his previous avatar, he reported on sanctions-era global trade, human rights violations, labor movements, environmental offences and natural disasters in India for six years. During his nine years as a Reuters correspondent, he has attempted to lend a global perspective to small-town issues. 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Pakistan’s burgeoning rooftop solar sector is poised to fundamentally reshape the nation’s energy landscape, with projected grid-linked electricity demand set to decline in several key industrial hubs next year. This transition, driven by a record surge in solar panel installations, is primarily due to the overwhelming offset of electricity consumption by “behind-the-meter” solar generation. Aisha Moriani, Secretary of Pakistan’s Climate Change Ministry, articulated this significant shift during discussions at the COP30 climate conference in Brazil, asserting that “Pakistan will experience negative grid-linked demand during certain daytime hours because behind-the-meter solar is offsetting grid consumption completely.”

The initial impact is anticipated in regions such as Lahore, Faisalabad, and Sialkot, areas characterized by intensive industrial activity and, consequently, high solar penetration rates. These industrial power-consuming locales are experiencing a decline in grid demand, a phenomenon termed “negative demand,” stemming from the substantial contributions of rooftop solar installations. This shift aligns with a global trend of distributed renewable energy sources reducing reliance on centralized grid infrastructure.

This development represents a significant challenge and opportunity for Pakistan’s utility sector. The nation’s energy landscape has been grappling with persistent power cuts and tariff increases, accelerating the adoption of rooftop solar among consumers and businesses. Pakistan has become the world’s third-largest solar panel importer, surpassing China in volume, reflecting the rapid pace of this decentralized energy transformation.

However, this rapid shift is also disrupting the traditional utilities’ established business model. The sector’s challenges extend beyond simply managing fluctuating demand; it encompasses intricate regulatory and market design considerations. Moriani emphasized the critical need for a proactive adaptation of the grid, regulations, and market structures to keep pace with the accelerating growth of distributed solar generation. The ministry is considering introducing new tariffs specifically targeted at large solar users, coupled with adjustments to fee structures to ensure equitable sharing of costs associated with grid maintenance.

Furthermore, Pakistan’s energy strategy is undergoing considerable adjustments in response to the solar dominance. The nation’s previously reliant reliance on Liquid Natural Gas (LNG) imports, primarily from Qatar and Italy’s Eni, is being reevaluated. Moriani highlighted the diplomatic space afforded at COP30 to foster engagement with energy ministers and commercial representatives, signaling a deliberate effort to diversify import sources and adopt a more flexible approach to gas procurement. The strategic goal is to align energy import strategies with fiscal space, demand dynamics, and seasonal variations, prioritizing stability and affordability over expansive LNG dependency.

The government’s strategic shifts are driven by a confluence of factors, including plummeting grid-linked demand, the imperative to manage the evolving regulatory environment, and the need to prioritize a sustainable energy policy. This represents a complex balancing act, demanding astute market management and regulatory adjustments—a transition Pakistan is undertaking with a critical awareness of the need to align energy strategy with evolving socioeconomic needs.