From Solar Boom to Green Industrialization: Policy Pathways to Localizing Solar Value Chains in Pakistan

Executive Summary

Pakistan’s energy landscape is undergoing a transformation driven by the rapid uptake of imported solar photovoltaic (PV) systems: as of mid-2025, solar is expected to contribute over 25% of Pakistan’s power supply (including off-grid solar generation), surpassing the share of any single fossil fuel and becoming the second-largest source of generation after hydropower in Pakistan’s energy mix. However, this solar boom has not benefitted all citizens equally. The installation of solar systems under net metering remains unaffordable for low-income families. The shift to rooftop solar has also reduced demand from the national grid, which has led to revenue losses for public-sector distribution companies, increased the financial burden on consumers who rely solely on grid supply, and posed challenges to overall grid stability. In recent years, the country has spent over USD 4 billion on imported solar equipment as it heavily relies on foreign manufacturers, particularly Chinese firms, without giving sufficient attention to developing local solar manufacturing capacity.

This policy report advocates the localization of solar manufacturing to reduce import dependence, create jobs, and improve energy security. It explores key opportunities and challenges in developing a local solar PV value chain, including the use of special economic zones (SEZs), the provision of financial incentives, and the establishment of joint ventures with Chinese manufacturers under the China-Pakistan Economic Corridor. We propose a “5S” (Strategy, Subsidy, Standards, SEZs, Science & Knowledge) roadmap to foster a competitive solar industry in Pakistan

The full report is available to download here