After facing challenges of market saturation domestically and setbacks in Southeast Asia, Chinese photovoltaic (PV) companies are now turning their attention to new potential markets. According to foreign media reports, on August 9th, Chaudhry Shafay Hussain, the Minister of Industry and Commerce of Punjab, Pakistan, signed a cooperation agreement with Alex Heng, President of South Pacific at Chinese PV company Aiko Solar. The two parties will collaborate to establish a solar module assembly and manufacturing plant in the province.
At the signing ceremony, Chaudhry Shafay Hussain emphasized that Aiko's solar module factory will serve the local market and contribute to exports. Additionally, Aiko Solar announced through its official WeChat account that the multiple agreements reached with the Pakistani government and partners mark the company's official entry and deep involvement in Pakistan's PV market.
In fact, in the first half of this year, Pakistan has surged to become the second-largest market for China's module exports and is considered the next booming PV market, increasingly attracting the attention of Chinese PV companies.
A Thriving Emerging Market
Pakistan has long struggled with severe electricity shortages and high electricity prices, which have significantly hindered local residents' lives and economic development. The country is rich in solar resources, with most areas receiving over 9 hours of sunlight daily, and 95% of its territory is suitable for efficient solar power generation. According to a World Bank report, Pakistan has 40 GW of solar potential, and using only 0.071% of its area for solar PV could meet the country's electricity needs.
Despite this immense potential, Pakistan's solar industry is still in its early stages. Currently, only 5.4% of Pakistan's electricity comes from wind, solar, and biomass energy, while fossil fuels dominate the energy mix at 63%, followed by hydropower at 25%.
To address this, the Pakistani government has actively promoted energy transition in recent years, making the development and utilization of renewable energy sources like PV a priority. The country's plan anticipates that by 2030, Pakistan's installed solar capacity will reach 12.8 GW, and by 2047, it will reach 26.9 GW. The government plans to achieve 20% of its electricity from renewable energy by 2025 and 30% by 2030.
To incentivize the growth of the PV industry, reports indicate that the Pakistani government has finalized a 10-year policy draft on "Local Manufacturing of Solar Panels and Related Equipment" earlier this year. This policy envisions incentives for manufacturers, including tariffs on finished product imports during this period to promote localization.
The Pakistani government aims to install approximately 9.7 GW of renewable energy generation systems nationwide by 2030 with China's assistance.
Surging to Become China's Second-Largest Module Export Market
Although Pakistan's PV industry is showing robust growth, especially under the "Belt and Road" initiative, and Chinese companies have already invested in several solar projects in Pakistan, providing financial resources and technical assistance, Pakistan's PV manufacturing capabilities are still relatively weak and largely dependent on imports from China. The enormous potential of the Pakistani market is now drawing the attention of Chinese PV companies.
In the past two years, Pakistan has gradually become one of the key regions for China's module exports. Currently, Chinese PV companies like LONGi Green Energy, JA Solar, Trina Solar, and Chint New Energy are increasing their efforts to develop the Pakistani market, though their focus has primarily been on exports.
By the end of 2023, Pakistan successfully entered the top ten regions for China's module exports, becoming the fifth-largest market with a 3.6% share of China's module exports.
Notably, in June 2024, Pakistan imported about 1.9 GW of PV modules from China, a 118% increase compared to May's 0.9 GW. In the first half of 2024, Pakistan imported 12.2 GW of PV modules from China, making it China's second-largest export market with a market share of 8.9%.
Industry insiders predict that Pakistan may become the next explosive growth market for PV.
Source：DataBM.com