The Quiet Revolution and Its Limits

Every few years, the world shakes, and Pakistan is reminded just how fragile its energy choices are. The latest tremors from the Middle East arrive on cue: oil prices jolting, shipping routes tensing, markets recalibrating. The government issues its assurances. Ministers appear on television. We are told, with the confidence that only the truly unprepared can muster, that there is nothing to worry about. The state is ready.

It never is.

What follows is a script we have long since memorised. Fears of fuel hoarding surface. Queues form. The circular debt, already a number so large it has lost its capacity to shock, quietly swells further. And then, inevitably, prices go up. When they do, the government reaches for its standard toolkit: orders to shut shops early, which the commercial sector ignores; scheduled load shedding, which the public endures; and the gradual squeezing of industrial gas and electricity supply until the larger factories begin going dark, one by one, quietly, until some sector of the economy is on its knees.

And then, the masterstroke: the promise. Shahbaz Sharif, the last time around, pledged 10,000 MW of solar within six months. I have spent some time wondering what happened to that plan. Not long, admittedly.

Here is the strange thing, though. While the government was busy making promises it had no intention of keeping, the private sector went ahead and did something genuinely remarkable. Pakistani households, businesses, and farmers, fed up with an unreliable grid and electricity tariffs that rose 155% between 2021 and 2024, started importing solar panels at a scale no official policy circle anticipated. By June 2025, Pakistan had spent USD 7.4 billion on PV panel imports, representing nearly 48 GW of capacity. Estimates put installed distributed solar at around 32 GW. In FY24 alone, distributed solar generated an estimated 19 TWh, roughly a fifth of grid-supplied electricity, while displacing about 5 million tonnes of oil equivalent in fossil fuel demand. NEPRA's books, meanwhile, show 6.1 GW of net-metered capacity and 780 MW of utility-scale projects. The rest happened entirely outside the frame of official planning.

This is, by any measure, an extraordinary achievement. It is also, I think, close to its ceiling.

The problem is not only that the grid, with some distribution companies recording hundreds of trippings per day and feeder infrastructure designed for one-way flows, is ill-equipped to absorb this much distributed generation. It is also that the capacity payments baked into earlier power purchase agreements still need to be paid, and they fall disproportionately on the consumers who cannot afford to put solar on their rooftops. The private sector revolution has been real. It has also quietly shifted the burden downward.

And then there is the harder problem. Rooftop solar, impressive as the numbers are, electrifies the most accessible slice of the energy system. The bigger fossil fuel consumers are not households. They are industry and transport. Switching a boiler in a textile mill, a reformer in a fertiliser plant, or a kiln in a cement factory to electricity is not a matter of importing cheap panels and calling a good installer. A recent Agora Energiewende roadmap on industrial electrification in Pakistan found that grid-only electrification raises operating costs by anywhere between 18% and over 100% depending on the sector.

The economics only work when paired with on-site solar, and even then, payback periods stretch to six years for textiles and well beyond that for fertiliser. The report is careful and honest about what the next phase actually requires: coordinated government policy, concessional finance, grid upgrades, regulatory reform, and institutional coherence across multiple ministries. Ministries that currently follow their own and often conflicting pathways. In other words, everything we have historically been worst at.

What worries me is not any single bad decision by the government. It is the pattern. Each subscequent government either blames its predecessor for the challenges it inherited, or adds new ones to the pile while reaching for whatever short-term relief is available. The private sector has done what private sectors do: it found the most accessible exit from an impossible situation and took it. That exit is largely exhausted now.

The next phase of Pakistan's energy transition, electrifying transport, industry, and heat, cannot be financed by household savings and private CAPEX alone. It requires the state. And the state, as we have established, is still busy writing reassuring press releases about crises it did not see coming.

The world smoulders. Oil and gas prices stir. Somewhere in Islamabad, the next promise is being drafted.