CCP solar study seeks market reforms
Pakistan’s competition watchdog has issued a draft solar market study, urging grid upgrades, clearer rules and quality controls to unlock investment and widen access.
The Competition Commission of Pakistan has issued a draft study on the solar market, saying weak grids, policy uncertainty and poor product oversight are holding back competition and investment in one of the country’s fastest-changing energy segments.
The report, titled Unlocking Green Potential: A Market Competition Study of Solar Energy in Pakistan, has been placed on the regulator’s website for stakeholder consultation. The study calls for urgent modernization of distribution infrastructure.
It says many feeders, transformers and substations were built for one-way electricity flows and now struggle to absorb rooftop solar injections. The commission said this technical mismatch is causing voltage fluctuations, back-feeding risks and limits on wider net-metering expansion, especially in areas where solar adoption is rising quickly.
CCP also pushed for a national smart metering plan and wider grid automation. It recommended phased deployment of advanced metering infrastructure and digital control systems in high-consumption feeders, industrial clusters and solar-heavy regions.
The study said real-time monitoring would improve billing accuracy, reduce theft and losses, and help distribution companies manage two-way power flows more safely. The report gave unusual weight to power market reform.
It said delays in implementing the Competitive Trading Bilateral Contract Market, or CTBCM, have slowed the rise of a competitive wholesale market and kept industrial users dependent on government-supplied electricity. CCP recommended a time-bound rollout and interim pilot bilateral contracts for renewable power, especially in industrial clusters and special economic zones, to test market design and unlock cheaper supply from large solar projects. The commission’s recommendations come as Pakistan’s solar market expands faster than official planning frameworks.
The CCP study says solar contributes only 1.15% to the national electricity mix, far below levels reported for China, India and Brazil, while around 99% of solar panels and equipment are imported. Yet the same report cites research by PRIED and TransitionZero showing official net-metering estimates capture only about 6 GW of solar generation, while satellite and survey-based estimates suggest around 33.35 GW of solar capacity is already deployed across households, industry, agriculture and commerce.
That gap helps explain why the watchdog is pushing for a national solar registry. The study says policymakers still lack a centralized database covering both net-metered and off-grid users, as well as imported and locally manufactured equipment. CCP said reconciling data from NEPRA, the Pakistan Bureau of Statistics and energy agencies would improve planning, reduce information asymmetry and make the market more transparent for new investors and consumers.
Quality control is another central concern. The report said Pakistan needs accredited testing laboratories, mandatory compliance with international standards and digital verification tools to curb substandard and counterfeit products.
Those steps matter because weaker equipment can damage consumer trust in a market that has grown largely through private investment rather than large public procurement. The timing is sensitive because the regulatory framework for rooftop users has just changed.
NEPRA’s Prosumer Regulations, 2026 replaced the older 2015 net-metering regime with a net-billing structure. Under the new rules, electricity exported by prosumers is billed at the national average energy purchase price, while electricity imported from the grid is charged at the applicable retail tariff. Agreements are set for five years, renewable with mutual consent, and systems of 250 kW or more must submit load-flow studies. That policy shift has sharpened investor focus on grid readiness, metering and settlement clarity. Financing remains another bottleneck.
A 2025 market diagnostic by Renewables First said net-metering exports rose 148% in 2024 and 194% in 2025, while installed capacity expanded 362% between 2023 and 2025.
It also estimated roughly Rs 800 bn in near-term lending potential in Karachi, Lahore and Islamabad alone. But the report said access to finance remains uneven and the benefits of distributed solar still tilt toward households and firms with stronger balance sheets.
CCP echoed that concern in its proposals for rural and off-grid users. It said net-metering gains are concentrated in urban areas, while rural consumers often rely on off-grid systems because of weak grid access and cannot capture the same policy benefits.
The commission recommended targeted subsidies, concessional finance and more support for off-grid deployment to reduce regional inequality in solar uptake.
The study also highlighted battery storage as the next competitive frontier. It said rapid global advances in batteries, driven in part by electric vehicle supply chains, give Pakistan a chance to ease grid pressure and improve reliability for businesses.
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CCP recommended incentives for solar-plus-storage, clearer safety standards and support for domestic battery manufacturing, saying better storage could shift more grid power toward productive sectors such as industry, agriculture and small business. Broader economic conditions add urgency.
The State Bank of Pakistan kept its policy rate at 10.5% on March 9 and warned that the macroeconomic outlook had become more uncertain after conflict in the Middle East pushed up fuel, freight and insurance costs. In that setting, cheaper domestic electricity sources have become more attractive for firms facing high energy bills and tighter financing conditions. For Pakistan’s energy sector, the CCP solar study amounts to a competition brief and an industrial policy nudge at the same time.
It argues that grid reform, better data, stronger standards and faster market liberalization can turn today’s fragmented solar boom into a broader investment cycle. Whether those proposals move quickly will depend on how the government handles CTBCM, rooftop billing rules and domestic manufacturing incentives over the coming months, but the CCP solar study has now put those choices squarely into the policy debate.