Currently, out of the $144 million in foreign investment in Solar PV plants in Pakistan, $125 million is from China, accounting for nearly 87% of the total.
Among the 530MW cumulative generation capacity in Pakistan, 400 MW (75%) is generated from Quaid-e-Azam Solar Park, the first-ever power plant capable of generating solar energy in Pakistan, owned by the Punjab government and built by China Tebian Electric Apparatus Xinjiang New Energy Co.
With 400,000 solar panels spreading over 200 hectares of flat desert, the plant was initially launched with a capacity of generating 100 MW of power for Pakistan.
Since 2015, there has been the addition of 300 MW power generation capacity with 3 new projects, and there are numerous planned projects reported for the Quaid-e-Azam Solar Park by AEDB with a cumulative capacity of 1,050 MW, according to China Economic Net (CEN).
Chinese companies are also major suppliers to many PV Projects in Pakistan such as Mini Solar grids in KP and ADB Access to Clean Energy Program.
The solar mini-grid stations in Jandola, Orakzai, and Mohmand tribal districts are in the final stages of their completion and soon the business community will get uninterrupted, cheap, green, and clean energy. Pakistan Solar Energy Market is expected to record a CAGR of 2.5% from 2022 to 2027. Up to now, the average utilization rate of the operational Solar PV plants is merely 19%, far from the over 95% utilization rate in China, representing huge opportunities to be tapped.
As experienced PV Plants investors in Pakistan, Chinese companies are more likely to further leverage their learning in the solar industry.
They can also benefit from China’s pledge to move away from coal-based energy generation and promote green energy in developing countries.
Meanwhile, the Pakistani government has set ambitious targets for Solar PV Capacity under the Integrated Generation Capacity Expansion Plan (IGCEP) of 2021.
Therefore, Chinese companies can expect a supportive government attitude to investment in Solar PV Plants in Pakistan and the cooperation would complement both countries’ commitment to the socio-economic development of the whole region.
In Pakistan, the insufficiency of power which leads to surging electricity tariffs and foreign exchange expenditure on imported energy is aggravating the necessity for the country to be more self-sufficient in power generation.
Currently, thermal power still takes the bulk chunk in Pakistan energy mix, accounting for 59% of the total installed capacity. Importing the fuel on which most of our power plants run has put a heavy burden on our treasury.
That is why we have been thinking for a long time that we should focus on the assets that are being produced in our country. If solar is installed on every roof, those who suffer from heat and load shedding can generate their own electricity at least all day, and if some surplus electricity is generated, they can sell it to the grid.
They can also support their children and serve elderly parents, Musadik Masood Malik, Minister of State (Petroleum Division) said in an interview with CEN. As a renewable energy source without fuel requirements, Solar PV is significantly cost-effective when compared to imported energy, RLNG, and gas. According to World Bank, Pakistan requires only 0.071% of its total land area (mainly in Baluchistan) to achieve the benefits of solar power.
If this potential is utilized, all of Pakistan’s current energy needs can be met with solar power alone. An increasing number of companies and organizations are catching the tide as shown by the robust growth trend of Pakistan’s solar consumption.
As of March 2022, AEDB Certified Solar System Installers grew by around 56%. Net Metering Based Solar Installations and Power Generation grew by 102% and 108% respectively. According to KASB analysis, it represents both government support and consumer demand & supply.
Since late 2016, the solar panel has been installed in 10,700 schools in Punjab and more than 2,000 in Khyber Pakhtunkhwa. Punjab schools that were fitted with solar power collectively save around Pakistani rupee PKR 509 million (~USD 2.5 mn) annually, which represents around PKR 47,500 (USD 237.5) being saved on a per school basis annually.
Currently, the installation of solar panels in 4,200 schools in Punjab and over 6,000 schools in Khyber Pakhtunkhwa solar panels is in progress, a KASB analyst told CEN. As per the Indicative Generation Capacity Expansion Plan (IGCEP), in May 2021, Imported Coal accounted for 11% of total installed generation capacity, RLNG (Regassified Liquefied Natural Gas) accounted for 17%, whereas solar only accounted for around 1%.
It is expected that the reliance on solar energy will increase to 13% and the reliance on imported coal and RLNG is expected to decrease to 8% and 11% respectively.
