(Bloomberg) -- Pakistan’s market for solar power is booming, propelled by a surge in imports from China, according to BloombergNEF.
The country imported some 13 gigawatts of solar modules in the first six months of the year, making it the third-largest destination for Chinese exporters, according to a report by BNEF analyst Jenny Chase. Pakistan’s installed capacity to generate power is just 50 gigawatts. China is the world’s biggest producer of solar equipment.
Solar is gaining traction in the South Asian nation following hikes in power prices over the past few years, with the latest increase in July triggering widespread protests. Higher rates have seen grid electricity consumption drop to the lowest in four years as many people switch to independent solar.
“Pakistan’s market has the potential to continue to be very large,” said Chase. “If solar is solving the market’s power problems, there is no reason to expect a crash any time soon.”
BNEF expects that the country will add between 10 gigawatts and 15 gigawatts of solar this year, mostly on homes and factories, making Pakistan the sixth-largest market in the world. Given the surge in imports, that figure could end up being far higher — or growth could stall if the grid situation improves, prices fall, or the market of middle-class people who can afford solar panels on their roofs saturates, according to the report.
There are other complications in accurately assessing the market and its prospects, said Chase. Those include wide discrepancies between official data on installations and imports, as well as claims last year that solar imports were used in money laundering schemes.
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