Friday, October 09, 2026

 

Pakistan’s solar boom reshapes power market

Pakistan’s solar boom reshapes power market
/ Andrey Metelev - UnsplashFacebook
By IntelliNews - Mumbai bureau October 8, 2026

Pakistan’s solar power industry has undergone a quiet revolution. The country’s solar energy capacity, as reported here in IntelliNews in recent days, likely does not reflect the full deployment of the technology, according to the World Nuclear Industry Status Report (WNISR) 2026 published last month.

In 2025, there were reports that Pakistan had imported a full 22 GW of solar panels from foreign suppliers in the year 2024. By early 2026, the country had imported a total of about 51.5 GW of solar panels, WNISR said, citing a researcher at the Pakistan-based think tank Renewables First. As a result, Pakistan installed in just five years about twice as much solar capacity as France did in a decade, WNISR added.

In 2025, China’s top customer for solar panels was Pakistan. By the summer of 2025, solar became Pakistan’s biggest source of power. Power cuts, routine in Pakistan, were previously blamed on capacity shortages. Now the country is facing overcapacity.

In 2024, the average utilisation rate of installed power generation capacity in the nation was just 34%. Expensive imported fuel increased the costs of electricity generation but contracts with private producers ensured capacity payments even when plants were not being operated and were sat idle.

Around the same time, as public utilities did not manage to recover enough to match their expenditures, they began to ration power. And then electricity consumers also faced increasing tariffs. According to an analysis by Oxford Professor Jan Rosenow, the average effective tariff in the country almost tripled in a decade, from PKR12.5 ($0.45) per unit in 2015 to over PKR34 in 2025.

As such, with large numbers of consumers leaving the grid to run their own solar systems 'off-grid', fewer remaining customers had to foot the bill, the report stated.

And with non-hydro renewable energy sources producing about 40 TWh net in 2025, a more than a fivefold increase in the past five years, and hydro generating about the same amount, both were exceeding nuclear-powered output by some 80%.

Share of nuclear power on the decline

Pakistan’s nuclear power generation rose 3.7% in 2025 to a record 22.5 TWh, marking the 10th consecutive year of growth, but overall nuclear’s share of the country’s electricity mix fell below 14% for the second straight year as solar generation surged, according to the same WNISR report.

Solar generation reached 36.3 TWh in all in 2025, surpassing nuclear output for the first time - and by a wide margin. The WNISR findings noted that solar generation could be even higher because estimates of so-called 'behind-the-meter solar' included in the Energy Institute’s latest Statistical Review of World Energy which may still underestimate total production.

On the nuclear front, Pakistan currently has six operating reactors with combined net capacity of about 3.3 GW. All six reactors were built by China National Nuclear Corporation (CNNC); the fleet consists of two Hualong One reactors, KANUPP-2 and KANUPP-3, near Karachi, and four CNP-300 reactors at the Chashma nuclear power complex.

The country’s nuclear expansion, however, has raised concerns over costs and debt. Pakistan’s Economic Survey 2025-26 noted that debt repayment accounts for a significant portion of the cost of nuclear-generated electricity, with much of the debt associated with KANUPP-2 and KANUPP-3, which entered service in 2022 and 2023, respectively.

The survey said the debt repayment period for the reactors is 12 years, representing only 20% of their estimated 60-year economic life.

CNNC is also building a fifth reactor at the Chashma site. The 1,000-MW C-5 is another Hualong One unit and is expected to enter operation by 2030.

Although an agreement for the project dates back to 2017, construction formally began more than seven years later, with the first concrete only poured for the reactor building’s base slab on December 30, 2024.

C-5 is currently China’s only new-build project under construction overseas, according to the WNISR. It is also one of only two non-Russian nuclear construction projects to start outside China during 2020-25, alongside South Korea’s Shin-Hanul-3.

In March 2026, Pakistan’s Foreign Office said the International Atomic Energy Agency had approved a safeguards agreement for C-5. Pakistan is one of three countries outside the Nuclear Non-Proliferation Treaty that have item-specific safeguard agreements with the IAEA, alongside India and Israel. Yet the C-5 project is now facing scrutiny over its cost and the economics of nuclear power compared with rapidly expanding renewable generation.

Pakistan’s National Electric Power Regulatory Authority estimated in January 2025 that C-5 would cost PKR966bn ($3.5bn) before financing and other costs, with the total estimated cost expected to reach PKR1.125 trillion. Most of the project is expected to be financed through Chinese credit.

The WNISR also said C-5’s high projected electricity costs, along with decisions to shelve renewable energy projects to accommodate nuclear ambitions, have attracted criticism.

The contrast between nuclear and solar is thus becoming increasingly pronounced. While nuclear generation reached record levels in 2025, solar produced substantially more electricity overall, reflecting the rapid expansion of solar capacity across Pakistan.

This trend alone suggests that while nuclear power will continue to contribute a significant baseload component to Pakistan’s electricity system, its relative importance could decline as lower-cost solar generation expands.

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