Solar is our saviour, capacity charge our drain

Writing in The Express Tribune, a petroleum engineer argues that solar has become a major support for the economy while capacity charges keep draining the power sector. Industrial grid consumption slipped from 29,885 GWh in FY2020-21 to 29,114 GWh in 2024-25, even though the number of industrial users rose by 7.5%. The writer estimates off-grid solar capacity at above 10,000MW, equal to 42% of average summer demand on the grid.

According to the Nepra State of the Industry report cited in the column, capacity payments were Rs280 billion in FY2015-16 and Rs350 billion in FY2016-17. The writer says sluggish GDP growth since 2019 has increased the share of capacity charges in payments to sellers, with around $40 billion already paid. The writer argues that stricter take-or-pay conditions in power purchase agreements could have limited these costs and calls for renegotiating them.

The column also cites the Energy Yearbook 2025, showing industrial energy use down around 46% from 2020 to 2025 and brick kiln coal use down 58% since 2021. The writer links part of this shift to higher utility costs that have pushed industry towards coal and wood. The writer urges caution on solarisation, which is described as the economy's biggest saviour, and wants energy changes weighed against Pakistan's greenhouse gas commitments to the United Nations.