China has crossed a remarkable threshold in its energy transition. In July, solar power overtook coal as the country’s largest source of installed electricity-generation capacity.
China now has around 1,288 gigawatts of solar capacity, marginally ahead of its 1,285 GW coal fleet.
It is an extraordinary statistic. Yet there is another number in this story that is perhaps even more important for countries such as Pakistan. Despite having more installed solar capacity than coal, China still generates almost twice as much electricity from coal as it does from wind and solar combined.
During the first half of 2026, wind and solar accounted for 24.6 per cent of China’s electricity generation, while coal still contributed 49.7 per cent.
At first glance, the two figures appear contradictory. How can solar capacity be greater than coal capacity, while coal continues to generate so much more electricity?
The answer lies in one of the most important concepts in electricity economics: installed capacity is not the same as actual electricity production.
A solar plant can have the same nameplate capacity as a coal plant, but it cannot produce electricity around the clock.
Solar output rises after sunrise, reaches peak around the middle of the day, and falls to almost zero after sunset. Clouds, weather, seasons and other factors can also affect production.
A coal plant, by contrast, can operate continuously for long periods, provided it has fuel and is available for dispatch.
This means that replacing one megawatt of coal capacity with one megawatt of solar capacity does not provide an equivalent replacement of dependable electricity.
That distinction is becoming increasingly important for Pakistan.
Rooftop Solar Shift
Pakistan has not experienced the same centrally planned renewable-energy expansion as China. Much of its solar revolution has been driven by households, businesses and industries making their own investment decisions.
The reason is straightforward. Electricity prices have risen sharply, grid supply has often been unreliable, and the cost of solar panels has fallen dramatically. For many consumers, rooftop solar has become an economic decision rather than an environmental one.
A household installing solar is often not thinking about reducing Pakistan’s carbon emissions. It is thinking about reducing an electricity bill that has become increasingly difficult to afford.
A factory owner may be considering production costs. A shopkeeper may be trying to keep his business viable. A middle-class family may want some protection against future tariff increases.
This is why Pakistan’s rooftop solar expansion should not be viewed simply as a government renewable-energy programme. It is, to a large extent, a consumer-led response to the economics of the electricity market.
That makes it particularly difficult to reverse. The panels have already been purchased. The investment has already been made. The generating capacity is already sitting on rooftops across the country.
The policy question is therefore no longer whether Pakistan should have rooftop solar. It already has. The question is how the electricity system should adapt to it.
After Sunset Challenge
Consider a typical Pakistani neighbourhood on a bright summer day. At noon, hundreds of houses may be generating electricity from their rooftop solar systems. Some are consuming part of that electricity while others may be producing more than they need.
That surplus can flow into the distribution network. Now move the clock forward to eight in the evening. The sun has disappeared, but electricity demand has not.
Lights are on. Fans and air-conditioners are operating. Water pumps, refrigerators, televisions and other appliances are consuming electricity. Rooftop solar generation has fallen essentially to zero. The grid must now supply the electricity that solar was providing only a few hours earlier.
This is the central problem with relying on solar capacity figures alone. A country can add enormous quantities of solar panels and still need conventional power stations to provide electricity when the sun is unavailable.
That does not make solar unsuccessful. It simply means that solar is one component of a larger electricity system. The next stage of Pakistan’s energy transition therefore cannot be about solar panels alone. It has to be about storage, grid management and flexible generation.
Battery-Powered Solar Revolution
For Pakistani consumers, the economics of rooftop solar are already beginning to change. The first generation of solar investors generally asked how many panels they should install. The next generation will increasingly ask how much solar and how much battery storage they need. The difference is significant.
A household without a battery produces a large amount of electricity during the day but may still need substantial electricity from the grid after sunset. A household with a battery can store part of its afternoon solar generation and use it in the evening.
This increases the value of the solar investment for the consumer and, if managed properly, can also reduce pressure on the grid during peak hours.
This is why Pakistan should begin treating battery storage as an integral part of its renewable-energy policy rather than an optional accessory. The country could eventually have millions of small batteries distributed across homes, shops and businesses.
Collectively, they could become a significant national energy-storage resource.
Cheap Energy, Reliable Power
Solar power has a major advantage; once the system is installed, sunlight itself does not have to be imported. For a country that spends substantial amounts of foreign exchange on energy imports, this is strategically important.
But cheap daytime electricity is not the same thing as reliable electricity at every hour of the day. A modern electricity system must meet demand continuously.
That means Pakistan needs to think about two separate questions. How much electricity can renewable energy produce? And how can the system ensure electricity is available when renewable generation is low? The answer cannot simply be more coal or gas-fired plants. Nor can it be solar alone. But it has to be a combination of resources.
Solar can provide large quantities of daytime electricity. Wind can provide generation at different times and can complement solar.
Hydropower can provide valuable flexibility where water availability permits. Batteries can move electricity from periods of high renewable production to periods of high demand. Nuclear power can provide steady generation.
Existing thermal plants can increasingly be used as backup and flexible capacity rather than as the main source of electricity.
The future system is therefore likely to be much more diversified than the system Pakistan has traditionally operated.
Don’t Make Solar The Enemy
This is where the debate over net metering and the newer consumer framework becomes particularly sensitive. The government’s concern is understandable.
Distribution companies have high fixed costs. They have to maintain transmission and distribution infrastructure even when consumers with rooftop solar buy less electricity from them.
If high-paying consumers substantially reduce their purchases from the grid, the remaining consumers can be left carrying a larger share of the system’s fixed costs. That is a genuine policy problem.
But the solution should not be to make existing solar investors feel that they are penalised for making a decision encouraged by the earlier policy framework. Many households and businesses invested substantial sums based on the rules, which existed at the time. Sudden changes to those rules can damage confidence in long-term investment.
More importantly, if policymakers make rooftop solar economically unattractive without addressing the underlying problem of high electricity prices, consumers will look for other ways to reduce their dependence on the grid. They may install batteries. They may shift more consumption to daylight hours, and businesses may invest in larger captive systems.
In the longer term, some consumers may seek to minimise their use of the grid as much as technically possible. That would not solve the financial problems of the electricity sector. It could make them worse. The answer is to turn consumers into prosumers. Pakistan should embrace the concept of the prosumer, a consumer who also produces electricity.
Instead of viewing rooftop solar as a threat to the distribution system, policymakers should build a framework that enables these distributed generators to become part of the national electricity system.
This requires predictable regulations and a market structure that reflects the value of electricity at different times. Electricity produced at noon, when solar generation is abundant, does not necessarily have the same value as electricity supplied at eight in the evening when solar production has disappeared.
Pakistan should gradually move towards more sophisticated time-of-use pricing and smart metering. Consumers could then be encouraged to use electricity when renewable generation is abundant and store it when necessary for later use.
A household might run its water pump during the afternoon, charge its battery or electric vehicle when solar generation is high, and use stored electricity after sunset.
Industries could similarly be encouraged to shift some energy-intensive operations towards periods when electricity is plentiful and cheaper. This would make the entire system more efficient.
Smarter Grid, Stronger System
There is another lesson from China’s experience. Installing renewable capacity is only one part of the transition. The electricity grid must also be capable of absorbing, moving and managing that electricity.
China has demonstrated the enormous potential of renewable energy, but it has also encountered problems involving grid constraints and renewable-energy curtailment as clean-power capacity has expanded rapidly.
Pakistan needs to learn that lesson before its own renewable penetration becomes much larger. The country needs stronger transmission networks, better distribution infrastructure, modern transformers, smart meters, improved forecasting and more sophisticated grid management systems.
Without these investments, Pakistan could end up in a peculiar situation where there is abundant electricity in some locations at certain times of the day, but insufficient at others.
That would be a failure not of renewable energy, but of infrastructure and planning.
Existing Plants, New Role
China’s experience also provides a useful perspective on Pakistan’s conventional power fleet. Coal does not disappear simply because solar capacity becomes larger. The same will be true of Pakistan’s gas, coal and other thermal plants. But their role can change.
Instead of operating continuously as the dominant source of electricity, some conventional plants can increasingly become flexible or backup generators, operating when renewable generation is insufficient.
This is an important distinction. Pakistan does not necessarily need to shut down every thermal plant immediately. Nor should it continue investing indiscriminately in large amounts of inflexible conventional generation.
The country needs to make better use of capacity it already has while ensuring that future investments are compatible with a renewable-heavy electricity system.
This is particularly important because Pakistan already suffers from relatively low utilisation of parts of its power-generation fleet while consumers face high electricity costs.
Building more generation capacity without addressing utilisation, transmission, distribution losses, and demand patterns could increase the financial burden.
Beyond Solar, Diversify Power
There is also a danger in describing Pakistan’s renewable future as simply a “solar revolution”. Solar is likely to remain the most visible component because it can be installed almost anywhere, including on rooftops.
But wind and hydropower have important roles to play. The objective should be to create a portfolio in which different sources complement each other. Solar is strongest during daylight hours. Wind can produce electricity at different times, depending on location and weather conditions. Hydropower can provide valuable flexibility. Batteries can shift electricity between different hours.
Together, these resources can create a much more reliable renewable-energy system than any one of them could provide individually.
Pakistan’s Rooftop Opportunity
There is an important difference between Pakistan and many other countries. The state does not have to finance every unit of distributed solar generation.
Millions of consumers are already willing to invest their own money. That is a remarkable national asset.
Instead of fighting this trend, policymakers should ask how it can be integrated into the national electricity system.
Imagine Pakistan ten years from now with millions of rooftop solar systems, large-scale solar and wind farms, expanded hydropower, widespread battery storage, smart meters, stronger transmission lines and modern distribution networks.
Electric vehicles could charge during the hours when renewable electricity is abundant. Industries could shift some consumption to cheaper durations of renewable energy. Households could store afternoon solar power for evening consumption.
The grid could increasingly become a platform connecting millions of small producers with conventional power stations and large renewable projects. That would be a fundamentally different electricity system.
China’s Solar Lesson
China’s experience should not be interpreted as evidence that renewable energy cannot replace conventional generation. The opposite is true.
Solar and wind capacity has expanded to such an extraordinary scale that they have already transformed the structure of China’s power system.
But China’s experience demonstrates that the energy transition has two stages. The first is building renewable capacity. The second is building a system capable of using that capacity effectively.
Pakistan is now entering the second stage earlier than many expected, because consumers themselves have installed large quantities of rooftop solar.
The country therefore has an opportunity to learn from China’s experience rather than repeat its problems. The objective should not be to choose between solar and coal.
It should be to create an electricity system in which solar, wind, hydro, batteries, nuclear and flexible conventional generation each perform the role for which they are best suited.
Panels In Place, Policy Must Catch Up
Pakistan’s rooftop solar revolution is unlikely to disappear. If anything, falling technology costs and rising consumer awareness will continue to push the market forward.
The question is whether government policy will adapt to this reality. The answer should not be to punish consumers who invested in solar.
Nor should it be to pretend that rooftop solar alone can solve Pakistan’s electricity problems. The sensible approach is to protect legitimate existing investments, establish predictable rules for future investors, encourage battery production, modernise the distribution system and create electricity prices that reflect the timing of power is produced and consumed.
China’s Experience, A Warning
Having more renewable capacity than coal does not automatically mean generating more electricity from renewables. Pakistan’s experience provides another lesson
Consumers can transform an electricity market much faster than governments expect when the economic incentives are strong enough. The country now needs to bring these two realities together. The solar panels are already on the rooftops in Pakistan.
The next task is to build the grid, storage systems and electricity market that can make those panels work not just for individual households, but for the country as a whole.
