Ann Arbor (Informed Comment) – While no one was looking, the Pakistani public took matters into their own hands, adding 17 gigawatts of solar power this year. These installations are mostly in the form of Chinese panels for rooftop or ground level solar in towns and villages.
Pakistan has abruptly become the world’s sixth-largest consumer of solar panels.
Here’s the thing. Pakistan has less than 50 gigawatts of electricity capacity in total! So they are putting in over a third of that in the form of solar just in one year. And this is not being spear-headed by the government, which is in disarray.
What we have to underline is that this remarkable solar gold rush is the work of ordinary consumers and private businesses and not government industrial policy. It shows that governmental inaction, of the sort so starkly on display at COP 29 in Baku and of the sort we may expect from the incoming president, Donald Trump, may not be a fatal obstacle to our saving the earth from a chaotic, torrid climate. The world’s people may demand clean solar, not because they understand climate change or are primarily driven by that consideration but because the cost of solar goes on plunging much faster than most analysts can now imagine. China’s government put $130 billion into its solar industry in 2023, and the technology responds to that kind of R&D money with big strides in efficiency and cost savings. And we are only at the beginning of this transformation.
DW’s Charli Shield tells the story of Shafqat Hussain, whose mother almost died during a summer heat wave — and what else is summer in South Asia? — when their government-supplied power went out. Such outages, called “load shedding” in Pakistan, are common. His mother had to go to hospital with heat stroke.
So the Hussain family put in solar. She quotes Shafqat Hussain as saying, “When you don’t have any electricity, forget about the air conditioning. Your fans are not working. You don’t have refrigerators on. You don’t even have any cold water to drink.”
The family’s energy bill has nose-dived by 80% and they no longer suffer from brown-outs or black-outs of electricity, gaining what she says Hussain called a “sense of safety.”
Pakistan’s politics is messy, dominated by two great political dynasties that are often at daggers drawn, and by a populist insurgent, former cricket star Imran Khan, who was jailed by the corrupt dynasties, throwing the country into turmoil. People have been in the streets this week in large numbers demanding Imran Khan’s release, and the army shot some down, raising the specter of further instability.
Americans don’t hear much about Pakistan, but it is a major player. At 240 million, it is the world’s fifth most populous country. It is the world’s 24th biggest economy by purchasing power GDP, though only the 46th nominally. In nominal terms, its economy is in the same ballpark as Egypt’s and South Africa’s. Its military is ranked 9th in the world, and it is a nuclear power.
In 2020, Chinese solar modules cost $240 per kilowatt, but they plummeted to $110 per kilowatt this year, as the post-COVID polysilicon shortages eased and the industry was hit with overproduction. That translates into about 11 cents per watt. China put out 310 gigawatts of cells in the first half of this year, representing an increase of over a third from the previous year. At the beginning of 2024, China already had 4/5s of the world’s solar module manufacturing capacity. In general, the cost of solar pv modules has fallen 90% since 2010.
In fact, China is betting the farm on green energy. Wood McKenzie notes, “The government has identified the “new three” export industries – solar, EVs and batteries – as critical for its strategy of strengthening economic growth in the face of headwinds from past over-investment in property and high levels of debt.”
Although tariffs keep Chinese panels out of the US even under Biden, it is a big world out there. If Trump, knee-caps the US solar panel industry and hurts the value of the Chinese yuan, it would have the effect of making China’s panels cheaper and of removing a great deal of competition, cementing Beijing’s continued dominance in this field.
Pakistan imports most of the fuel it uses to generate electricity and after rate hikes this summer it has some of the higher electricity costs in Asia, far more than in neighboring India or in Bangladesh. Costs of electricity to businesses in Pakistan are especially high, giving them an impetus to install solar panels.
There are lots of potential problems with Pakistan’s solar boom. As customers desert the big utilities, they have to raise prices for everyone else, and many installations depend on steady energy generation to work — but some of them are having to shut down and then slowly come on line when needed. The government of Prime Minister Shehbaz Sharif could become sufficiently alarmed to put obstacles in the way of further panel imports. But what the Pakistani public is demonstrating is that people want and need electricity and will find a way to get it cheaply. Coal and fossil gas can no longer provide it. Coal is 9.5 cents a kilowatt hour in a lot of places, and gas is 6.5 cents per KWh. But in Pakistan solar can be 3.5 cents per kilowatt hour. Ironically, these fossil fuels are heating up the earth so fast that people absolutely need air conditioning, as Shafqat Hussain discovered. And it is increasingly solar and wind that can provide cheap air conditioning that doesn’t just make things worse. I wouldn’t advise governments to stand in the way of families rescuing their grandmas from heat stroke.
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Bonus video:
Bloomberg TV: “Pakistan’s Solar Boom Helps Millions, But Harms Grid”
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