Pakistan’s solar boom sparks water strain, fiscal woes
Pakistan’s growing embrace of solar energy in both agriculture and rooftop generation is showing signs of stress in two critical areas: groundwater resources and government finances.
Reuters reports that in Punjab province, many farmers have shifted from diesel or grid powered tube wells to solar pumps, allowing them to irrigate fields more frequently and expand water intensive crops such as rice.
Farmer Karamat Ali said he sold livestock to buy solar panels and now irrigates “with ease,” something he could not afford before. According to the US Department of Agriculture, rice fields expanded by 30 per cent between 2023 and 2025, while maize cultivation fell by 10 per cent. Economist Ammar Habib told Reuters that around 650,000 tube wells now run on solar power, compared with far fewer just a few years ago.
The shift has been driven by a collapse in solar panel prices, down about 80 per cent since 2017 because of Chinese production. Internal data from Punjab’s water authority shows that areas where groundwater levels fall below 60 feet now cover about 6.6 per cent of the province, a 25 per cent rise since 2020, while zones deeper than 80 feet have more than doubled.
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Farmers confirm they irrigate more often, sometimes several times a day, compared to once daily before solar pumps. Previously, the high cost of diesel and electricity acted as a natural check on over-pumping, but that restraint has disappeared with free solar power. Experts, including the World Bank, have warned that without regulation and monitoring, Pakistan risks a severe water crisis as farmers plant more rice and other thirsty crops.
Officials offered differing views. Punjab’s irrigation minister acknowledged that “solarization is clean energy, but it is depleting the water table.” By contrast, the federal power minister rejected the idea that solar wells were worsening groundwater depletion.
Authorities are attempting to mitigate the impact through canal restoration and pilot projects to recharge aquifers, but Reuters highlights that Pakistan still lacks real time monitoring and strong governance over groundwater use.
Meanwhile, Bloomberg reports that Pakistan’s debt burdened government is confronting another challenge from the solar boom. The surge in rooftop panels is undermining the traditional model in which the state buys electricity from power producers and sells it to consumers.
With households and businesses generating their own power, revenue from state utilities is falling. Many power purchase contracts and subsidies are financed through public borrowing and foreign creditors, notably China, raising concerns that reduced sales could deepen fiscal stress.
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The financial impact is further complicated by the country’s “capacity payments” problem, in which utilities are required to pay independent power producers even when electricity sales drop. According to Bloomberg, this creates the risk of higher tariffs for non-solar users, adding to public frustration. The rapid uptake of rooftop solar is also complicating Pakistan’s ongoing negotiations with the International Monetary Fund over energy sector reforms.
Together, the two dynamics highlight a paradox. Clean energy adoption is bringing environmental and financial relief at the household level, but without integrated planning, it risks worsening Pakistan’s water scarcity and destabilizing its energy sector finances.