By Moaaz Manzoor

Pakistan’s growing solar footprint begins to provide an important economic cushion against imported fuel shocks, as renewed regional tensions and rising oil prices threaten to increase pressure on inflation, growth, and the external account.

Speaking to Wealth Pakistan, Nadir Gul Barech, Chief Executive Officer (CEO) of the Pakistan Poverty Alleviation Fund (PPAF), said Pakistan’s long-standing dependence on imported furnace oil, diesel, and LNG has repeatedly exposed its economy to global energy price shocks.

“Pakistan has been spending heavily on the import of furnace oil, LNG, and diesel,” he said, adding that the recent shift towards solar energy has started to change this equation.

Barech said the government’s decision to allow private-sector imports of solar panels at zero tax, along with the introduction of net metering, has encouraged households, farmers, and businesses to invest in solar systems. Rising electricity and gas tariffs have also pushed consumers to seek cheaper, more reliable energy alternatives.

“During the last couple of years, Pakistan has imported 50 gigawatts of solar panels from various countries, and around 25 percent of energy needs are now being met through solar,” he said, adding that the government’s target of meeting 60 percent of the country’s energy needs through solar by 2035 remains achievable if policy support continues.

The relevance of this transition has grown amid fresh pressure in the global oil markets. A Topline Securities study, titled ‘Soaring Oil Prices Amidst Regional Conflicts: Implications for Pakistan Economy and Market’, says Pakistan imports 85 percent of its energy requirement, with petroleum imports estimated at $15 billion in FY26, or 22 percent of total imports.

The study has projected that if oil prices remain elevated, inflation could average 9-10 percent over the next 12 months, while GDP growth in FY27 could slow to 2.5-3.0 percent from an earlier estimate of 4.0 percent.

Barech said Pakistan has also felt the impact of the latest fuel price shock, but the pressure has been less severe than it could have been due to recent investments in renewable energy.

“Investment made during the last couple of years in renewable energy, particularly solar, has saved more than $12 billion every year that Pakistan otherwise used to spend on importing furnace oil, LNG, and diesel from the Gulf countries,” he said.

According to him, Pakistan’s solarization is the result of both government policy and public response.

“Tax incentives and net metering created the framework, while people adopted solar because they saw direct savings,” he said.

Barech said the PPAF has been working on renewable energy and climate resilience projects for nearly a decade and has completed more than 1,450 projects across the country, generating 16.5 megawatts through solar, hydropower, wind, and biogas initiatives. Besides providing clean energy to off-grid households, these interventions have supported schools and health facilities.

He said various PPAF-led projects in the southern regions of Pakistan have supported 45,000 farmers, primary producers, and small and medium enterprises linked to value chains such as olive, grapes, dates, mango, banana, onion, and dairy. These initiatives have created 47,000 jobs in rural areas of Balochistan and Sindh, he said.

Through training, matching grants of more than $5 million, and bank loans worth $4 million, many beneficiaries have shifted their operations to green technology.

Barech stressed that Pakistan should not treat solar as the only renewable energy option, as hydropower, wind energy along the coastal belt, and biogas from livestock also offer major potential.

He added that reducing fuel imports would allow Pakistan to redirect resources towards debt servicing, employment generation, and social sector services.

Credit: INP-WealthPk