Payback in 3 years! 90% of people in this place install photovoltaics! Behind the prosperity lies a "life and death situation"

In the distant South Asian continent, Pakistan, a country once labeled as an "energy desert", is now experiencing an unprecedented "photovoltaic storage revolution". With the rapid development of the photovoltaic market, Pakistan is gradually transforming from an "electricity black hole" to a "photovoltaic hotspot".

The southern part of Pakistan is tropical, and the rest is subtropical, with an average annual temperature of 27 degrees, high temperatures in summer, and high electricity demand. Near the equator, the deserts and arid areas in the south and southwest can receive a large amount of solar radiation every year. For example, the annual average solar radiation in Balochistan and Sindh provinces reaches 5-7 kWh/m², with excellent lighting conditions and rich solar energy potential.

However, this country with a population of 220 million has long faced the dilemma of power shortage. In recent years, Pakistan's electricity prices have continued to rise, bringing huge economic pressure to residents and businesses. According to statistics, since 2021, Pakistan's electricity prices have risen by 155%, and the electricity bills of industrial users have even exceeded rent. This phenomenon of skyrocketing electricity prices has forced enterprises and residents to turn to "photovoltaic + energy storage" self-provided electricity to reduce electricity costs. CCTV has previously reported that an important reason why Pakistani residents choose solar energy is that the country's electricity bills have risen sharply. Data shows that the average monthly electricity bill for Pakistani households in 2024 is US$350, while the figure was US$100 a year ago. In addition, during peak hours of electricity consumption, power outages are often encountered, which also causes trouble to residents' lives. The installation of household solar photovoltaic panels costs about US$3,500, so many residents decided to switch to solar energy.

Residents of Rawalpindi, Pakistan: One of the main reasons for installing solar panels in my home is that there will be power outages due to insufficient power supply. Even if there is no power outage, the electricity bill is too high to bear. Installing solar energy can be a one-time investment and save electricity costs for a lifetime. By the end of 2024, Pakistan's cumulative installed photovoltaic capacity has exceeded 4.5GW, nearly three times that of 2020. What is even more remarkable is that the penetration rate of distributed photovoltaics in Pakistan is extremely high, accounting for more than 70%. This means that more and more households, factories and agricultural facilities are beginning to adopt photovoltaic power generation, self-sufficient, and reduce dependence on the power grid.

At the same time, the cost of distributed photovoltaic systems is also declining. In 2024, the cost of distributed photovoltaic systems has dropped to 10 cents per watt, making the initial investment of photovoltaic power generation affordable for more households and businesses.

The Pakistani government attaches great importance to the development of renewable energy and regards it as an important way to achieve energy independence and sustainable economic development. In July 2024, the Sindh provincial government announced that it would promote 200,000 photovoltaic home systems throughout the province. However, it will only be installed for low-income households. Based on the local power shortage and high electricity prices, the government will also provide a high subsidy of 80% for this. Sindh also plans to build several large-scale photovoltaic projects, each with a capacity of 305MW. The government has set a target of 30% renewable energy by 2030, and has introduced a large number of photovoltaic energy storage projects through the China-Pakistan Economic Corridor (CPEC).

In addition, the government has also introduced a series of fiscal and tax incentive policies, including zero tariffs on photovoltaic module imports, green low-interest loans (interest rate 6%), and net metering policies (allowing users to sell electricity to the grid), which provide strong policy support for the development of the photovoltaic market.

At present, taking the typical "5kW photovoltaic + 10kWh energy storage" in the Pakistani market as an example, the installation cost is about RMB 20,000-22,000. The actual electricity cost of Pakistani residents has risen to RMB 2.0-2.2/kWh (RMB, including taxes and fees). Referring to the Pakistani benchmark interest rate, the loan interest rate is 22%. Based on this calculation, the system yield is about 42%-48%, and the investment can be recovered in 3-4 years.

As the world's largest photovoltaic producer, China has obvious advantages in photovoltaic technology and production capacity. In recent years, China's exports of photovoltaic modules to Pakistan have continued to grow, reaching 13GW in 2024, accounting for more than 90% of Pakistan's total imports.

In addition to photovoltaic modules, Chinese companies also occupy an important position in the inverter market. Huawei, Sungrow and other brands occupy 70% of Pakistan's inverter market, providing strong support for the application of Chinese photovoltaic technology in the Pakistani market.

Although the installed capacity of photovoltaic power generation has grown rapidly, Pakistan's energy storage market is still in its infancy. By the end of 2024, Pakistan's cumulative energy storage deployment was only 350MWh, mainly used for peak shaving and valley filling in industrial parks and off-grid power supply in remote areas. Lithium-ion batteries, as the mainstream technology, account for more than 60% of the market share, but unfortunately, most of these batteries rely on imports, and the Chinese brand CATL accounts for 35% of the Pakistani market.

The lag in the energy storage market has made it impossible for photovoltaic power generation to provide continuous power supply at night or on rainy days, which has become a major bottleneck restricting the application of photovoltaics. However, this also provides huge market space and opportunities for the development of energy storage technology.

Behind the prosperous scene of Pakistan's photovoltaic market, there are many challenges and concerns, which are surging like undercurrents, threatening the health and stability of the market.

First, grid shocks and interest games are a major obstacle to the development of the photovoltaic market. With the rapid popularization of distributed photovoltaics, state-owned power companies have suffered unprecedented shocks. Take a large state-owned power company in Pakistan as an example. Due to the installation of distributed photovoltaic systems by a large number of households and enterprises, the company's electricity sales have dropped sharply, resulting in an annual loss of more than US$8.6 billion.

In order to balance the income of the power grid, the government has to consider restricting photovoltaic imports, but this is contrary to the goal of promoting the development of renewable energy. This interest game makes the government in a dilemma when formulating policies, and also casts a shadow on the future development of the photovoltaic market.

Technical and talent shortcomings are another major challenge facing Pakistan's photovoltaic market. In the field of energy storage battery technology, Pakistan has not yet formed a unified technical specification, and the market is full of various products with uneven performance. Lead-acid batteries, as a representative of the low-end market, are cheap, but have problems such as short life and low efficiency, which affect the healthy development of the entire energy storage market.

In addition, Pakistan lacks local technical talents, which makes most photovoltaic projects rely on the support of foreign companies. This dependence not only increases the cost of the project, but also limits Pakistan's independent ability in photovoltaic technology innovation. During the operation and maintenance of a photovoltaic power station construction project in Pakistan, the local technicians were unable to effectively handle equipment failures, resulting in multiple shutdowns of the power station, which seriously affected the power generation efficiency and economic benefits.

Geopolitical risks are also a factor that cannot be ignored. In recent years, the global geopolitical situation has been complex and changeable, and the photovoltaic industry, as an emerging industry, has also been affected. The US's restrictive policy on Southeast Asian photovoltaic products has put Pakistan at risk of supply chain disruptions when importing photovoltaic modules.

The hidden danger of overcapacity is also worrying. As the world's largest photovoltaic producer, China's production capacity accounts for more than 80% of the global total. If the Pakistani market is overly dependent on Chinese supply, once the global photovoltaic market experiences a cyclical overcapacity, the Pakistani market will find it difficult to remain immune.

In fact, in recent years, there have been many incidents of photovoltaic product price plunges due to overcapacity, which have brought huge economic losses to global photovoltaic companies. As an emerging market, Pakistan's photovoltaic industry is still in its infancy. If it cannot effectively deal with the problem of overcapacity, it will seriously affect the stability and healthy development of the market.

In the face of the above challenges and concerns, what trends will the Pakistani photovoltaic market present in the future?

Technology integration and intelligent upgrading. With the continuous development of technologies such as artificial intelligence and big data, photovoltaic energy storage systems will achieve more intelligent and precise management and scheduling. Taking the energy management system (EMS) as an example, the system can monitor the operating status of the photovoltaic system in real time, optimize energy storage scheduling, and improve the operating efficiency and stability of the system. In addition, AI prediction technology will also be widely used in the photovoltaic market. By predicting factors such as weather and power demand, the operation strategy of the photovoltaic system can be adjusted in advance to cope with potential risks and challenges.

Accelerated localized production. In order to reduce logistics costs, avoid tariff risks and improve market competitiveness, international brands such as CATL and Sungrow have planned to set up factories in Pakistan to achieve localized production. This will help promote the upgrading and development of Pakistan's photovoltaic industry and form a more complete industrial chain and ecosystem. Taking CATL as an example, the company plans to establish a lithium battery production base in Pakistan to meet the local demand for photovoltaic energy storage systems. This move will not only reduce CATL's operating costs in the Pakistani market, but also drive local employment and economic development.

In terms of policy game, the Pakistani government is formulating a new photovoltaic energy storage policy, which intends to list energy storage as a standard feature of new photovoltaic power stations. However, while this policy promotes the popularization of photovoltaic energy storage systems, it may also bring some negative effects. For example, subsidy reduction and import restriction policies may inhibit market growth and lead to a decline in corporate investment willingness. Therefore, the government needs to weigh the pros and cons in the policy-making process to ensure the scientificity and rationality of the policy.