Chinese PV is expediting overseas expansion to solve Pakistan’s power crisis

Chinese PV is expediting overseas expansion to solve Pakistan’s power crisis as it positions itself as a crucial market for Chinese Photovoltaic company.

Power shortages have long been a persistent issue in Pakistan. Additionally, frequent floods over the past two years have severely damaged the country’s power infrastructure, heightening the urgent need for large-scale solar photovoltaic (PV) installations. At the Investment and Trade Forum for Cooperation between East and West China on September 22, Pakistani trader Abbas emphasized the increasing demand for solar energy in the country.

Pakistan is undergoing a significant energy transformation, positioning itself as an important market for Chinese photovoltaic companies. According to the China Photovoltaic Industry Association (CPIA), Asia surpassed Europe as the largest destination for PV exports in the first half of 2024, with Pakistan becoming the second largest module export market after Europe. In the same period, China exported inverters worth RMB 1.714 billion to Pakistan, with a notable increase in August, where the value of inverter exports surged by 429.04% year-on-year. Now, solar panels can be seen on a wide array of factories, homes, hospitals, and mosques throughout the country.

This rapid shift toward solar energy is not without reason. Pakistan’s reliance on imported coal for traditional thermal power generation, coupled with the power sector’s circular debt, slow development of transmission networks, and frequent damage to transmission lines, has significantly hampered the country’s energy system. The increase in photovoltaic exports and supporting products highlights the urgent need for alternative energy solutions.

Abbas noted that rising electricity prices are pushing people to find alternative solutions. As of June 2023, Pakistan’s installed solar power capacity stood at 630 megawatts, which represents just 1.4% of the country’s total installed power capacity, leaving much room for growth.

From a natural resource perspective, Pakistan is well-positioned to benefit from solar power. According to the World Bank’s Global Solar Atlas, in regions like Balochistan, a 1KW household photovoltaic system can generate an average of 1990kWh annually. This is significantly higher than the output in cities like New Delhi, India, and Shandong Province, China, with Global Tilted Irradiance (GTI) levels also showing substantial advantages over these areas.

On the policy front, the Pakistani government has been actively promoting renewable energy development, with strategic targets to increase the share of renewable energy in the electricity mix to 20% by 2025 and 30% by 2030. NEPRA’s IGCEP2047 report projects rapid growth in the country’s PV capacity, with forecasts of 12.8GW by 2030 and 26.9GW by 2047. To meet these targets, Pakistan will need to add an average of 1.65GW annually by 2030 and 1.07GW annually by 2047.

Businesses in Pakistan are rapidly adopting solar power solutions. Khawaja Masood Akhtar, CEO of Forward Sports, one of the world’s largest football manufacturers, shared his strategy of covering all available rooftop space with Chinese solar panels. His factory has already increased the solar share of its energy mix to 50% in the past two years, and he plans to raise it to 80% by April next year through additional imports of solar panels from China.