Islamabad, March 18, 2025 – A wave of optimism is sweeping across Pakistan as solar panel prices have taken a dramatic dive, thanks to a bold new government policy reshaping the nation’s energy landscape. In a move hailed as a game-changer for renewable energy adoption, the federal government’s recent amendments to its net metering framework have triggered a significant reduction in solar system costs, making clean energy more accessible to households and businesses alike.
The policy, rolled out earlier this month, slashed the buyback rate for surplus solar power fed into the national grid from Rs27 per unit to Rs10 per unit—a whopping 63% cut. Alongside this, the introduction of net billing for new solar consumers has shifted the financial dynamics of solar adoption. While the changes have sparked debate, they’ve undeniably led to a market ripple effect: solar panel installation costs have dropped by as much as Rs175,000, with prices per watt falling by Rs2 in some regions. Solar Revolution Gains
For the average Pakistani consumer, this translates into tangible savings. A 5-kilowatt (kW) solar system, once a hefty investment, is now available for between Rs500,000 and Rs550,000, down from previous highs. Larger systems have followed suit—a 7 kW setup now hovers around Rs600,000, while a 10 kW system costs just over Rs800,000. For those eyeing bigger installations, a 12-15 kW system can be secured for upwards of Rs1.2 million, still a notable reduction from earlier rates.
“This is a turning point,” said Ahmed Raza, a solar equipment supplier in Lahore. “The lower buyback rate has pushed distributors to offload inventory faster, and competition is driving prices down. People who couldn’t afford solar before are now calling us daily.” Raza noted that the market has seen a surge in demand, particularly from middle-class families eager to escape the burden of soaring grid electricity bills, which often exceed Rs65 per unit.
The policy shift comes amid Pakistan’s rapid embrace of solar energy, fueled by years of unreliable power supply and escalating tariffs. With over 283,000 net-metered solar users already in the system and millions more turning to off-grid solutions, the country has emerged as a global hotspot for solar adoption. Last year alone, Pakistan imported a staggering 8,000 megawatts (MW) of solar panels, mostly from China, cementing its status as a key player in the renewable energy revolution.
However, the changes haven’t been without controversy. Critics, including several government ministers and the Pakistan Solar Association (PSA), warn that the reduced buyback rate could dampen long-term investment in solar infrastructure. “The payback period for on-grid systems has jumped from 1.5 years to nearly three,” said PSA Chairman Waqas Moosa. “This might push people toward hybrid systems with batteries, which could strain the grid further as fewer stay connected.”
On the flip side, proponents argue that the policy addresses a pressing issue: the financial strain on non-solar grid consumers. With solar users offsetting their bills through net metering, the burden of fixed costs—like capacity payments to power producers—has increasingly fallen on those reliant on traditional electricity. The government contends that the new measures will stabilize the energy market while still encouraging renewable growth.
For now, the price drop is winning over skeptics. In Karachi, small business owner Salma Khan recently installed a 5 kW system for her textile shop. “My monthly bill went from Rs50,000 to almost nothing,” she said. “Even with the lower buyback rate, I’m saving enough to recover my costs in under three years. That’s a no-brainer.”
As Pakistan navigates this energy transition, the government is also exploring local manufacturing of solar inverters to cut import costs and boost jobs. Industry experts predict that if this trend continues, solar could soon power a third of the nation’s homes and businesses, reducing reliance on fossil fuels and easing the strain on foreign exchange reserves.
With the sun shining brightly—both literally and figuratively—Pakistan’s solar revolution is proving that even amid policy upheaval, opportunity can flourish. As prices continue to fall, the dream of a cleaner, cheaper energy future is inching closer to reality for millions.
