Pakistan's Rooftop Solar Boom Leaves Its Coal Plants Stranded

In Pakistan, solar panels have become so common that families now include them in wedding dowries, Bloomberg reports. The detail sums up one of the fastest energy shifts anywhere. Solar supplied about 20 percent of Pakistan's electricity in 2025, according to the think tank Ember, up from roughly 3 percent at the start of the decade. Pakistan was China's third-largest export market for solar panels last year.

The reasons are practical. Grid tariffs have risen steeply, while Chinese panels have become cheap and easy to install. A packaging manufacturer near Karachi told Bloomberg that his rooftop panels produce power for less than a third of the grid price. Imports of Chinese batteries rose almost 150 percent in the first half of this year, to about $392 million, as more homes and businesses store their own power.

The other side of the ledger

The grid is losing paying customers. Electricity sold by distribution companies in the 12 months to July 2025 was nearly 12 percent lower than three years earlier. That leaves fewer customers to cover the fixed costs of power plants, including seven coal plants China has built in Pakistan since 2017 at a cost of about $9.6 billion. Overdue payments to Chinese-built plants exceeded $1.5 billion by August. One clean-technology importer called it "a death spiral for all the utilities."

The government has taxed panel purchases and cut the rate it pays for surplus power sold back to the grid. Energy Minister Awais Leghari says Islamabad wants to stretch out its power-sector debt to China. "We are not expecting any haircuts," he said.

For investors, Pakistan is an early case of what happens when cheap solar arrives faster than utilities can adapt. It is also a test of how China handles its older coal projects abroad now that it exports so much clean technology.

Sources: Bloomberg, Ember, Business Recorder.