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  "path": "/latest/solar-grid-in-times-of-iran-war-strategic-asset-in-europe-financial-fault-line-in-pakistan/",
  "publishedAt": "2026-04-23T08:56:39.000Z",
  "site": "https://humenglish.com",
  "tags": [
    "Latest",
    "Pakistan",
    "Solar grid in times of Iran war: strategic asset in Europe, financial fault line in Pakistan",
    "HUM News English"
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  "textContent": "A quiet contradiction is emerging at the heart of Pakistan’s power sector.\n\nEven as households are being nudged away from generating their own electricity through recent changes to net metering, distribution companies (DISCOs) have been found procuring power outside the national grid, often at higher costs, in apparent violation of the economic merit order.\n\nAt first glance, these developments seem unrelated. One concerns rooftop solar policy; the other, internal inefficiencies in power procurement. But taken together, they point to a deeper structural shift: Pakistan is not resisting decentralisation – it is fragmenting it!\n\n## A SYSTEM BYPASSING ITSELF\n\nThe government’s decision to probe DISCOs for purchasing expensive electricity from small power producers (SPPs) and captive power plants (CPPs) through bilateral contracts is significant not just for what it reveals, but for what it implies.\n\nThese purchases, reportedly made outside the framework of the Independent System and Market Operator (ISMO), bypass the economic merit order; the principle that electricity should be dispatched from the cheapest available source first. In doing so, they risk raising overall system costs, which are ultimately passed on to consumers through higher tariffs.\n\nMore importantly, they suggest that parts of the system are already operating outside the centralised grid architecture. Faced with supply constraints, inefficiencies, or reliability concerns, DISCOs appear to be informally securing power wherever they can, even if it comes at a premium.\n\nThis is, in effect, a form of decentralisation. But it is one that is opaque, uncoordinated, and economically inefficient.\n\n## CONSUMERS FOLLOWING SUIT\n\nAt the same time, Pakistani households have been making their own move away from the grid.\n\nOver the past few years, rising tariffs and unreliable supply have driven a surge in rooftop solar installations. Net metering made this shift financially viable by allowing consumers to export excess electricity back to the grid at near-parity rates.\n\nThat equation has now changed.\n\nUnder the revised framework, export tariffs have been sharply reduced while import tariffs remain high, effectively turning net metering into net billing. The financial incentive has shifted decisively: solar users are now encouraged to consume their own generation rather than sell it.\n\nThe result is a slowdown in the very decentralised, consumer-led energy transition that had begun to take shape.\n\n## A TALE OF TWO RESPONSES\n\nGlobally, similar pressures are producing very different outcomes.\n\nIn Europe, a surge in energy prices following the Iran war has triggered a sharp rise in demand for rooftop solar systems. Households are increasingly investing in full setups that include batteries and storage, allowing them to reduce reliance on volatile grid supply and shield themselves from price shocks.\n\nThis is decentralisation as a policy-aligned response: consumers react to high prices by generating their own power, and the system evolves to integrate that behaviour.\n\nPakistan, by contrast, presents a more conflicted picture.\n\nHigh tariffs and supply instability have created the same incentives for consumers to go solar. But policy adjustments are dampening that response, even as utilities themselves appear to be stepping outside the grid in search of supply.\n\nThe divergence is striking: while households are being pulled back towards the grid, parts of the grid are quietly stepping away from it.\n\n## WHO GETS TO DECENTRALISE?\n\nThis raises a critical question: who is allowed to exit the grid, and on what terms?\n\nIn Pakistan’s current trajectory, decentralisation is occurring asymmetrically. At the top of the system, DISCOs are engaging in off-grid procurement, effectively creating a parallel market for electricity. At the bottom, consumers face reduced incentives to generate and export their own power.\n\nThe consequence is neither a fully centralised system nor a competitive decentralised one. Instead, it is a fragmented structure in which inefficiencies at the utility level coexist with constraints on consumer-level innovation.\n\n## THE COST OF MISALIGNMENT\n\nThis misalignment has direct economic implications.\n\nIn theory, decentralisation (whether through distributed generation or competitive procurement) should lower costs by introducing flexibility and competition. But when it occurs without transparency or coordination, it can have the opposite effect.\n\nOff-merit power purchases by DISCOs increase the average cost of electricity. At the same time, discouraging rooftop solar reduces the potential for consumers to offset demand and ease pressure on the grid.\n\nRather than correcting price signals, the system risks amplifying them.\n\nThe result is a cycle in which high costs drive alternative behaviour, but policy and practice prevent those alternatives from delivering system-wide relief.\n\n## AN INFLECTION POINT\n\nPakistan’s power sector now appears to be at an inflection point.\n\nOne path leads towards a more integrated model of decentralisation, where distributed generation, storage, and flexible procurement are brought into a coherent framework governed by transparent pricing and regulation.\n\nThe other leads towards deeper fragmentation, where different parts of the system operate under conflicting incentives, driving up costs and undermining efficiency.\n\nThe recent probe into DISCO practices, alongside the recalibration of net metering, suggests that policymakers are aware of the pressures building within the system. The challenge lies in aligning responses across all levels, from utility procurement to household generation.\n\n## THE BROADER LESSON\n\nIf there is a lesson from global trends, it is that energy systems are increasingly shaped by how they respond to shocks.\n\nIn Europe, geopolitical disruption has accelerated a shift towards self-generation and resilience at the household level. In Pakistan, similar pressures are exposing cracks within the grid itself.\n\nWhether those cracks evolve into a more flexible, decentralised system, or widen into structural inefficiencies, will depend on how coherently policy aligns with the behaviour already underway.\n\nFor now, the paradox remains: in a moment when both utilities and consumers are seeking ways around the grid, Pakistan’s energy transition is pulling in two different directions.\n\nThe post Solar grid in times of Iran war: strategic asset in Europe, financial fault line in Pakistan appeared first on HUM News English.",
  "title": "Solar grid in times of Iran war: strategic asset in Europe, financial fault line in Pakistan"
}