A new study finds that Pakistan’s net-metering capacity is concentrated in the best-served, higher-income utility areas, while much of the country’s solar sits unregistered, off-grid and behind the meter where outages are worst.
Researchers from Pakistan and the United Kingdom have found that Pakistan’s solar boom is running through two separate channels. Registered net metering is concentrated among higher-income customers in the best-served utility areas. Unregistered off-grid and behind-the-meter systems dominate where the grid is least reliable.
The study was conducted by Wajid Islam of the Pakistan Institute of Development Economics, Jan Rosenow of the University of Oxford and the University of Cambridge, and Asha Amirali of the University of Bath. The researchers combined Ember generation data with the National Electric Power Regulatory Authoritys (NEPRA) performance evaluation of distribution companies for fiscal 2024-25, NEPRAs State of Industry Report 2025, and module import data from Renewables First. They said the four sources had not previously been combined at the distribution-company level.
Metered exit
Pakistan had 6.1 GW of net-metering capacity across 378,339 consumers by June 30, 2025. About 85% is concentrated in six distribution companies: Lahore Electric Supply Co. (LESCO) with 1.3 GW, Islamabad Electric Supply Co. (IESCO) and K-Electric with 0.9 GW each, Multan’s MEPCO with 0.8 GW, Faisalabad’s FESCO with 0.7 GW and Gujranwala’s GEPCO with 0.6 GW. Five of the six report near-zero load shedding and bill recovery above 100%. The exception is Karachi’s K-Electric, which reported 5.2 hours of load shedding a day.
The researchers said solar adoption in these areas is driven primarily by electricity prices rather than outages. The national average base tariff rose from PKR 16.91/kWh in fiscal year 2022 to PKR 35.50/kWh in fiscal year 2025, an increase of about 110%, and the top residential slab reached PKR 48.84/kWh. A rooftop system displacing the most expensive units can pay for itself in two to four years, according to the paper.
Hidden boom
The four worst-served utilities, PESCO, HESCO, SEPCO and QESCO, hold about 14% of registered capacity on the authors’ estimates. Those figures are based on a residual allocation because utility-level data for the four companies were not published. NEPRA monitoring shows actual load shedding in their areas exceeds 8 to 10 hours a day. Transmission and distribution losses reached 39.2% at SEPCO, 38.4% at QESCO and 37.2% at PESCO, and QESCO recovered just 38.7% of billed amounts.
The researchers found a large gap between the roughly 40 GW of modules imported since fiscal year 2020 and registered net-metering capacity, and they used it as evidence of substantial unregistered deployment. They treat the gap as a lower bound on hidden capacity rather than an estimate of it. Renewables First has since put cumulative imports at about 54 GW by the end of March 2026.
The authors cite corroborating indicators rather than direct measurements. Agricultural grid consumption fell 31% year over year in fiscal year 2025 as farmers solarized tube wells, recovery rates fell, and grid demand now dips sharply at midday.
“This second boom is an inference and not an observation,” the authors wrote.
Using Ember data, the authors report that solar generation rose from 2.6 TWh in 2019 to 36.6 TWh in 2025, or 22.5% of output. The paper also reports that solar supplied 12.1 TWh of 37.5 TWh, or 32.3%, in the first quarter of 2026, putting it ahead of coal, gas, nuclear and hydropower for the first time.
Spiral risk
The researchers said both channels thin the utilities’ revenue base. Capacity payments rose 46% to PKR 1.9 trillion in fiscal year 2024, and utilities recover those costs through per-unit electricity tariffs. That means every unit leaving the grid raises the per-unit cost for the customers who remain, who are increasingly those who cannot afford solar.
“Pakistan’s solar boom is best understood not as an energy-policy success or a crisis but as a verdict on the incumbent model,” the authors wrote.
NEPRA replaced net metering with net billing for new connections in February, crediting exports at about PKR 11/kWh under five-year contracts, while existing contracts stay in place until they expire. The researchers said the change governs only the visible boom and is likely to slow registered adoption, make battery storage and self-consumption more attractive, and push marginal adopters into the unregistered segment.
Policy fixes
The authors called for a standing program to measure behind-the-meter capacity by region using customs data, installer registrations, surveys and feeder-level daytime load. They also recommended time-of-use pricing, a transparent fixed network charge and a time-differentiated export credit that rewards evening exports. For the worst-served areas, they suggested solar-plus-storage mini-grids and daytime solar feeders as alternatives to the central grid.
They also urged planners to treat distributed storage as a planning quantity in the country’s generation expansion plan. Battery imports rose from 1.4 GWh in 2024 to 4.6 GWh in 2025, according to Renewables First.
The researchers noted that the analysis is descriptive rather than causal.
The same Renewables First review estimated that about 51 GW of solar was operational in Pakistan by March 2026 and that distributed solar generated 51 TWh in fiscal year 2025. In August, the Pakistan Solar Association reported that midday demand on LESCO’s network fell from 2.2 GW in 2024 to 765 MW in 2026. CATL-backed CNTE entered Pakistan’s battery market in June through an agreement with Treet Battery, and in September NEPRA required solar and wind projects in the country’s first renewable wheeling auction to include co-located storage equal to at least 10% of firm capacity. The government also proposed higher sales tax on modules and higher duties on batteries and inverters in its June budget.
The researchers described their findings in “Pakistan’s solar boom: Visible and invisible grid defection in a high-cost, low-reliability power system,” which was recently published in Energy Research & Social Science.
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