From Panels to Batteries: The Second Wave Inside Pakistan's Power Market

Pakistan's import ledger shows a ratio that has fallen from 1:44 to 1:2.2 in about two years. On first look it is a dry commercial statistic — a comparison of spending on solar panels against spending on batteries. But when a ratio slides that fast, it means the market has moved its centre of spending. The money used to go into machines that make electricity; it now goes into machines that store it. In the first quarter of fiscal year 2027 (1QFY27), Pakistan spent USD 405 million on solar panels and USD 182 million on batteries — roughly USD 587 million of hardware in a single quarter. Within a few years the battery share has multiplied. Having spent years reading power and fuel ledgers, I have rarely seen the centre of purchasing shift this quickly. The question is now simple: will Pakistan's planners let the second wave slip through their hands the way they did the first?

The backdrop to Pakistan's power market is a long-running crisis. Grid-dependent supply, rising tariffs, frequent load-shedding and a gap between demand and supply have steadily eroded the ordinary consumer's trust in the grid. Just then, global solar panel prices began a sustained fall, and a rooftop solar wave began. Pakistan has now imported roughly 60,000 MW of solar panel capacity. But only a small fraction of that has been connected to the formal net-metering system. The rest serves the consumer's own use, or is installed in ways that planners cannot easily see. The first discomfort lies here — the market is moving faster than policy.

It is worth understanding what net metering is. Under this arrangement, a consumer with rooftop solar can export surplus electricity to the grid and earn a credit, which is later adjusted against the bill. The grid was, in effect, the consumer's bank. But this system was designed for the panel era, not the battery era. When a consumer installs storage and keeps the surplus at home instead of exporting it, the entire relationship with the grid changes.

The core shift is captured by a simple distinction. A panel changes how many units you buy from the grid — that is, volume. But a battery changes when and how often you buy — that is, timing and frequency. This distinction is the heart of the second wave. Solar panel prices have already fallen a long way, and that decline is unlikely to repeat quickly. Battery prices, by contrast, are still on a steep downward slope. The next step in cost reduction, then, is not another panel boom but cheaper storage.

For those who already have panels on their roofs, the next decision is a battery, because in the evening peak every unit bought from the grid has an alternative: their own stored electricity. Panels generate only during the day, yet peak demand arrives in the evening. Without a battery, that evening demand must be met from the grid — at high tariffs. With a battery, the consumer can use the day's output in the evening. The evening peak is no longer just a story of grid supply; it is a contest between the grid and distributed storage.

The economics of that contest create pressure on two sides. On one side, self-sufficiency is getting cheaper for the consumer, because storage prices are falling. On the other, that same self-sufficiency erodes revenue for the grid and conventional generation. The grid recovers its fixed costs — network maintenance, transmission, the price of contracted capacity — through the units it sells to customers.

When wealthier and middle-income consumers install their own generation and storage and cut back on grid purchases, those fixed costs must be borne by the remaining customers. Tariffs rise, more customers leave the grid, and tariffs rise again. This cycle has a well-known name: the utility death spiral. The phrase is absent from Pakistan's debate, but the movement points exactly there.

Policy is messier still. The old net-metering regime — in which a consumer exported surplus solar and earned credit — has effectively given way to an undefined, so-called 'presumed framework'. The rule has thus become vague rather than flexible. And precisely as batteries make self-consumption more profitable, that vagueness makes new investors hesitate. Policy and technology are not walking in the same direction — technology is ahead, policy behind.

The cost of falling behind shows up most clearly in forecasting. Demand used to be calculated with a simple equation: GDP, temperature and industrial demand. Now millions of rooftop solar-and-storage systems have destabilised that equation, because distributed self-sufficiency grows outside the planner's line of sight. A plan that cannot capture an invisible, unregistered storage base rests on shaky ground.

This is where the planner's questions change. The question is no longer 'how many megawatts of solar?' It is now: when will charging happen, when will discharging happen, how much storage of which kind, and how intensively will the conventional generation fleet be run. The very language of regulation is shifting — from capacity to timing.

From a global supply-chain angle, the change matters too. When demand in a market like Pakistan shifts from panels to batteries, the centre of profit shifts from panel makers toward battery makers and importers. Panel prices are already low, with limited room to fall further; in batteries, that room is still open. The decision on a Pakistani rooftop is therefore also deciding who profits in the global supply chain.

The macro angle is not to be ignored either. Combined panel-and-battery imports of roughly USD 587 million in a single quarter weigh on Pakistan's foreign-exchange position. In the solar era the bulk of spending went into generating equipment; now a growing share goes into storage — meaning the structure of the import bill itself is changing. This is not an immediate crisis, but in the long run it is a variable in the balance of payments.

To stop here would be to fall into a trap. The cleaner the ratio looks, the thinner its foundation. From 1:44 to 1:2.2 — that comparison rests on a window of only about two years, and no named statistical source. So it should be treated as a direction, not a settled conclusion. The real hidden information is not in the ratio but in the gap: the distance between 60,000 MW of imports and the small net-metered fraction implies a vast informal base — one planners cannot see.

That darkness is itself a risk. A base that is not in the plan can suddenly break the plan. Pakistan was late to grasp the speed of the first wave; the fear is that the second wave repeats the mistake. The official narrative says the market is stable and under control. The real numbers say the market is moving faster than the rules — and that gap is the actual story.

The consequences of this second wave can be imagined along three paths. The worst: regulators write rules for first-wave volumes, the market again outruns policy, and grid economics destabilise. The middle: the new framework moderates grid-connected solar growth but strengthens the battery case. The best: pre-emptive planning anticipates the storage disruption and replaces the old arithmetic before it is overtaken. All three paths need the same thing — timely decisions. And timing is precisely Pakistan's weak spot.

One more point deserves keeping: the grid's role is not disappearing, it is changing. In the evening peak, both the grid and distributed storage will exist, but the grid will no longer be the sole supplier — it will be one of two contestants. That redefinition is the biggest strategic change of all, and the least discussed.

If the fall in storage prices stalls — a shock in the global supply chain, slower technology, or any policy-neutral shift — the whole calculation weakens. The second wave's momentum depends on a single global variable that is not in Pakistan's hands.

The question now is this: in the race between a market with falling storage costs and a narrow policy framework, who wins? In the first wave, the market won. The arithmetic of the second wave may not yet be written in an open ledger — but the numbers have already told their story.