Report says rapid expansion of solar energy is reshaping Pakistan’s energy mix and reducing reliance on imported LNG
KARACHI: Rooftop solar installations are projected to meet 20 per cent of Pakistan’s total electricity demand by 2026, signalling a major transformation in the country’s energy mix as renewable energy adoption accelerates, according to a new report by ICMA International.
In its latest Sector Insights report, ICMA International’s Research and Publications Department said Pakistan’s long-standing dependence on imported fossil fuels, particularly oil and liquefied natural gas (LNG), is being challenged by the rapid expansion of renewable energy, fundamentally reshaping the country’s energy landscape.
The report traces Pakistan’s energy transition from the discovery of the Sui gas field in the 1950s to the establishment of LNG import terminals at Port Qasim during the 2010s. While long-term LNG supply agreements with Qatar and the United Arab Emirates strengthened energy security, the report noted that they have also created inflexible contractual commitments at a time when domestic demand for imported gas is steadily declining.
According to the report, Pakistan’s LNG consumption declined from a peak of 8.2 million tonnes to 6.1 million tonnes by 2025, driven by the rapid uptake of solar power, subdued industrial activity and persistently high global LNG prices.
ICMA observed that nearly 70 per cent of Pakistan’s LNG imports are consumed by the power sector. However, electricity generated from natural gas is becoming increasingly less competitive as the cost of solar power continues to decline.
The report also warned that geopolitical risks, including potential disruptions in the Strait of Hormuz and regional conflicts, have highlighted Pakistan’s vulnerability to imported energy supplies and reinforced the need to diversify its energy sources.
By early 2026, Pakistan was projected to face an excess LNG supply equivalent to 177 cargoes over the coming decade, reflecting a widening gap between contracted import volumes and actual domestic demand.
Looking ahead, the report said Pakistan aims to generate 60 per cent of its electricity from clean energy sources by 2030, with rooftop solar expected to play a central role in achieving that objective.
ICMA described the rapid expansion of rooftop solar as the beginning of a decentralised energy revolution that is expected to reduce reliance on conventional fuels. Although fossil fuels will continue to form part of Pakistan’s energy mix, their role is likely to shift from primary electricity generation towards providing balancing and backup support for the national grid.
“Energy security is not just about keeping the lights on—it is about economic resilience and national stability,” the report stated.
The report recommended that Pakistan accelerate renewable energy deployment, modernise electricity transmission and distribution infrastructure, and renegotiate long-term fuel supply agreements to better align imported energy with the country’s evolving demand profile.