Pakistan's rapid adoption of solar power is creating a new challenge for its troubled power sector, as cheaper distributed generation reduces demand for grid electricity, strains utilities' finances and threatens the repayment economics of Chinese-backed coal-fired power plants, Bloomberg reported Thursday.
About an hour's drive east of Karachi, the country's economic hub, solar panels now cover rooftops across an industrial zone of about 400 companies at Port Qasim, alongside a coal-fired power station built as part of China's Belt and Road Initiative.
Solar accounted for about 20% of Pakistan's electricity generation in 2025, up from roughly 3% at the start of the decade, according to figures from Ember, an energy think tank.
High power costs, an unreliable grid and the availability of cheap panels — popularized through DIY installation tutorials on TikTok — made the nation China's third-largest solar export market last year, Bloomberg reported. The equipment has become so ubiquitous that it is now even being used as wedding dowry.
Pakistan's battery imports from China jumped almost 150% in the first half of the year to a value of about $392 million, according to customs data cited by Bloomberg.
The shift is reducing demand for grid-supplied electricity, putting further pressure on state-owned utilities and the Chinese companies operating coal-fired power plants.
Electricity consumption across Pakistan's distribution companies was almost 12% lower in the 12 months to July 2025 than three years earlier, according to NEPRA data.
The impact is particularly significant for Chinese-backed power projects. Overdue payments to Chinese electricity plants had risen to more than $1.5 billion by August, according to an official familiar with the details, while outstanding project debt tied to China-financed coal assets stood at $3.1 billion last year.
At the Port Qasim coal plant, overdue payments had reached almost $300 million in June, according to an official familiar with the matter. The plant is among seven coal-fired facilities China has delivered in Pakistan since 2017 at a cost of about $9.6 billion.
When China was focused on the export of coal power, "Pakistan was the darling of that," Kevin Gallagher, a professor of global development policy at Boston University and a co-author of "China and the Global Economic Order," told Bloomberg. "Now they're the darling of green, but the two don't square."
Pakistan's Energy Minister Awais Leghari said Islamabad is seeking to extend the repayment period for the power-sector debt rather than seeking a reduction in the outstanding amounts.
Chinese officials have so far been unwilling to make major concessions on outstanding power-sector debt that could trigger losses for Chinese state-owned companies and banks, according to people familiar with the discussions. Potential solutions under consideration include refinancing and repurposing under-utilized power plants.
