Solar Imports Help Pakistan Finally Afford ACs, New Budget May Reverse the Relief

Pakistan’s reliance on imported fossil fuels has dropped sharply as rooftop solar adoption accelerates, with oil and LNG imports declining by 40 percent between 2022 and 2024, according to a pre-budget report shared with ProPakistani by Renewables First

Instead of reducing total energy consumption, the country is increasingly meeting demand through distributed solar systems which allowed users to turn on their air conditioners more often.

The shift is due to a surge in low-cost solar panel imports from China, combined with Pakistan’s zero-rated tariff policy on solar equipment.

Still, the government is reviewing a proposal to increase sales tax on solar panels from 10 percent to 18 percent, ProPakistani reported earlier. If approved, the move will reverse this relief.

The report estimates Pakistan saved around $12 billion in LNG imports between 2021 and February 2026, and could save another $6.3 billion if current energy price trends continue.

Installed solar capacity is estimated at roughly 53 gigawatts by March 2025, driven largely by rooftop and distributed systems rather than centralized planning.

The study says this transition has also reduced exposure to currency depreciation, inflationary pressure, and external energy shocks, while providing cheaper electricity alternatives for households and businesses.

Despite ongoing vulnerability to regional supply risks, including through the Strait of Hormuz, the report says Pakistan’s solar expansion has already created a significant buffer against import shocks.