Scoping Study of Off-Grid Solar PV and Captive Power Systems in the Textile Sector: Techno-economic and Environmental Analysis
Combines field research and techno-economic modeling to propose a dual-track strategy of centralized and distributed solar for the textile sector, backed by clearer regulation and blended financing.
Summary
This December 2025 ADS study, conducted with NUST's USPCAS-E, evaluates pathways for large-scale off-grid and captive solar PV deployment in Pakistan's Faisalabad and Multan textile clusters under the emerging CTBCM regime. Combining GIS-based asset mapping of sampled mills, stakeholder interviews, and scenario-based techno-economic modeling across 8 policy cases (from business-as-usual to full CTBCM implementation), it quantifies how wheeling rates, trading rates, and the EU's Carbon Border Adjustment Mechanism (CBAM) affect project LCOE, payback period, IRR and NPV, concluding that a dual-track strategy, large centralized solar builds paired with protected distributed/behind-the-meter solar, best balances system-wide emissions reduction with investor returns.
Key Points
- 1Pakistan's textile sector contributes about 8.5% to GDP and 60% of exports while employing nearly 30% of the industrial workforce, yet a single January 2023 grid failure cost the sector an estimated $70 million in one day.
- 2Industrial power tariffs have risen to about PKR 40/kWh for many export-oriented firms, compared to an earlier "regionally competitive" benchmark of around PKR 26/kWh.
- 3Cumulative net-metering capacity exceeded 5.3 GW across over 42,000 installations by mid-2025, with yearly licensed additions rising from near-zero in 2016 to about 750 MWp in 2023.
- 4Wheeling charges above roughly Rs. 15-20/kWh erode distributed solar project viability and materially lengthen payback periods, while incorporating a conservative CBAM value of $15/tCO2 raises adjusted NPVs and IRRs across all modeled cases.
- 5The proposed Case 8 (Rs. 12/kWh wheeling rate, Rs. 24/kWh trading rate) is identified as the best-performing scenario, and the study recommends phased, predictable UoSC schedules with intra-cluster wheeling discounts to protect small/medium prosumers during the transition.