Rooftop solar is booming globally. From standalone PV to grid-tied generation facilities—the transformation has largely been facilitated by technological breakthroughs, supportive policies, and incentivized regulatory frameworks. The concept of on-grid citizen energy generation is however a very recent phenomenon in Pakistan wherein net-metering regulations were implemented only in 2016 and so customers have begun to adopt it over the span of past 4 years. As of December 2019, these installations reached a cumulative installed capacity of 47.6 MW. Although its contribution remains negligible—0.12 percent of total energy mix—however it is expected to speedily pick up growth (based on its year-wise percentage growth) and play a significant role in the clean energy transition momentum overtime.
Distributed Generation (DG) Picking Growth
The growth of distributed generation in Pakistan reveals a very steep positive trend line—from 1 MW in 2016 to 3 MW in 2017, 10 MW in 2018 and then a sudden big jump in 2019 with addition of 32 MW i.e. registering growth of 220 percent from 2018-19. In terms of licenses, 3020 licenses were issued to distributed generators by Dec 2019. So with the existing growth rate, DG is expected to play a pivotal role in the future energy sector of Pakistan. Although these regulations applied to both solar PV and wind-turbines, however all installations to-date under these regulations are based on solar PV.
Residential Sector at the Frontline of the DG Drive
The sector-wise distribution of DG growth showcases that residential sector in Pakistan remains at the forefront of this drive i.e. around 57% of the total installed capacity. The residential sector in Pakistan is also the largest electricity consumer in Pakistan accounting for 45 percent of share in total electricity consumption. Industry and commercial sectors are the second and third leading sectors investing in distributed generation. Whereas a smaller shared of capacity is also installed by public institutes.
Geographically Uneven Distribution
There is also an important spatial dimension to the growth of DG in Pakistan. Before delving into it, it is important to note that the distribution side of value chain in Pakistan has been segmented into 11 Distribution Companies (DISCOs)—10 public entities and 1 private. Since these companies i.e. DISCOs are the main intermediaries in this entire process—connecting the consumers/end-users to the grid— accordingly reference guides were issued to them for complying with the net-metering regulations. However, if we look at the overall distribution of installed capacity across the 11 DISCOs, it reveals that growth in distributed generation is largely concentrated in 3 major DISCOs of the country namely LESCO, IESCO and KEL. Out of the remainder 8 DISCOs, the performance of 3 DISCOs namely HESCO, QESCO, TESCO is particularly insignificant—wherein 2 of them have issued 3 and 1 licenses respectively over the past 4 years and the last one has not yet issued any license. Although a general assumption is that this uneven geographic distribution might be rooted in non-compliance of DISCOs however objectively speaking its factors remain largely under researched.
For a country like Pakistan, DG offers not only one of the most promising solution to advancing clean energy transition but also an optimal opportunity to reliable supply access and energy access at lower prices than conventional energy. Any significant growth in it will also contribute to achieving the sustainable development goals on energy and climate action i.e. SDG 7 and SDG 13. Pakistan has also recently implemented a new ‘Alternate Renewable Energy Policy (2019) with the stated objective to address increase share of renewable energy (non-hydropower) from the current less than 5 percent to 30 percent by 2030. To achieve the target, the potential offered by DG is significant. However, this will require a friendlier environment for the end-users and significant support by the DISCOs and relevant departments.
*This analysis is based on an undergoing project conducted by Institute of Policy Studies in Pakistan. For further insights, follow the link http://www.ips.org.pk/distributed-generation-landscape-in-pakistan-an-overview/
 80 percent of installed capacity is concentrated in these three DISCOs.
 Institute of Policy studies is currently conducting on DG probing this particular dimension.
 AEDB, Alternative and Renewable Energy Policy (2019). http://www.aedb.org/images/Draft_ARE_Policy_2019_-_Version_2_July_21_2019.pdf