Sri Lanka’s grid collapse has a warning for South Asia’s solar ambitions

In a development that exposes the challenges of integrating growing amounts of renewable energy into conventional electricity networks, the Sri Lankan government has ordered owners of rooftop solar systems to disconnect them from the grid until following a nationwide blackout that the country experienced recently.

Sri Lanka’s national grid failed on October 17, at about 11:45 am, leaving the country’s 22 million people without electricity. Within hours, the National System Operator (NSO) issued an emergency order asking households with rooftop solar panels to disconnect their systems from the grid until further notice. The measure was intended to help stabilise the transmission network. Electricity supplies were restored around 6:30 pm.

It remains unclear whether distributed solar contributed to the blackout or made it worse.  But on October 23, the authorities again instructed rooftop solar owners to disconnect their systems until further notice.

The response highlights a growing challenge across South Asia: rooftop solar is expanding rapidly, but electricity networks designed around conventional power stations are not always equipped to manage large volumes of variable, distributed generation.

Sri Lanka’s blackout remains unexplained

Sri Lanka’s energy minister, Anura Karunathilake, pointed to a suspected fault at the Upper Kotmale power station as a possible cause of the blackout. The NSO, however, rejected reports of power-station breakdowns, saying that hydropower plants had remained online and that the Norochcholai coal-fired power station had shut down according to standard procedures.

A technical investigation will need to establish the sequence of generation losses, voltage disturbances and protection-system responses before the contribution of individual technologies can be determined.

Rooftop solar outpacing grid readiness

The incident occurred amid rapid growth in solar capacity. By September 2026, Sri Lanka’s installed solar capacity had exceeded 3,070 megawatts (MW), including about 2,542MW of rooftop systems operating under various net-metering schemes and 534MW of ground-mounted projects. Solar supplied an estimated 15-25 per cent of daily electricity demand, depending on weather conditions.

The NSO had already warned that planned additions to rooftop capacity for the full year had been exceeded ahead of schedule, and had asked distribution licensees to monitor new connections.

The challenge, however, is not simply the amount of solar power being generated, but how it interacts with the grid. Conventional generators have rotating machinery that provides inertia, helping to slow changes in electricity-system frequency following a disturbance. Solar photovoltaic systems, by contrast, connect through inverters. Their ability to provide frequency and voltage support depends on their design, settings and compliance with grid requirements.

If a disturbance causes large numbers of inverters to disconnect simultaneously, the resulting loss of generation can aggravate the original problem.

Grid stability meets utility finances

The government was already concerned about the strain that rising solar generation could place on the electricity system. Weeks before the blackout, the energy ministry suspended feed-in tariffs for surplus electricity from new rooftop installations, with effect from September 11, and discouraged new connections. It cited financial losses at the Ceylon Electricity Board (CEB), the state-owned utility responsible for generation, transmission and distribution.

The subsequent disconnection orders and restrictions on new installations point to concerns about the grid’s ability to accommodate further solar capacity. They also reflect the financial pressures facing the CEB.

These problems are related but distinct. A utility’s financial difficulties do not, by themselves, demonstrate that rooftop solar threatens grid stability. Nor does a grid disturbance establish that distributed generation is to blame. The challenge is to maintain a reliable network while designing tariffs and regulations that give households and businesses a predictable incentive to invest in clean energy.

A familiar challenge that Europe faced

Though Sri Lanka’s blackout remains unexplained, its experience highlights a wider challenge: in several countries, rooftop solar has grown faster than the system used to monitoring and manage electricity networks or the power grid.

The Iberian Peninsula offers a relevant precedent. On April 28, 2025, Spain and Portugal experienced a major grid collapse when solar photovoltaics accounted for over 60 per cent of Spain’s electricity output. The European Network of Transmission System Operators for Electricity (ENTSO-E) identified several interacting factors, including oscillations, gaps in voltage and reactive-power control, rapid reductions in output and cascading generator disconnections. The findings showed why investigations must examine how generators, inverters, protection systems and network controls interact, rather than attributing a system-wide failure to one source of generation.

Spain subsequently updated its regulatory framework to allow solar and wind installations to provide voltage-stabilisation services, including reactive-power support. These measures bring renewable generation into grid management rather than treating it solely as a source of supply. Sri Lanka’s reported response relied on more immediate steps, including rooftop disconnection and closer scrutiny of new approvals.

Lessons for South Asia

Pakistan is facing similar tensions at a larger scale. Combined off-grid and net-metered solar capacity has reached an estimated 18,000 MW, while net-metered rooftop solar alone has crossed 6,000 MW. The country imported more than US $4 billion worth of panels over four years. As households and businesses shifted to self-generation, distribution companies saw revenues decline, while fixed system costs and capacity payments to underutilised independent power producers remained.

Pakistan’s National Electric Power Regulatory Authority responded by moving new installations from net metering to net billing, reducing the rate paid for exported electricity from around PKR 26 to PKR 10-13 per kilowatt-hour and shortening contract periods to five to seven years. Existing agreements were subsequently protected, but the changes created uncertainty for new investors.

Sri Lanka adds a technical dimension to Pakistan’s largely fiscal debate. Limited real-time visibility into distributed generation can leave grid operators unable to identify where solar output is concentrated, track reverse power flows or target export reductions during an emergency. Protection settings and reconnection procedures must also account for two-way power flows and inverter-based generation. Without these capabilities, a system disturbance may be harder to manage and recover from.

Bangladesh is approaching these questions at an earlier stage. Rooftop solar and other small-scale installations were estimated at around 1 GW by mid-2026, compared with 859 MW of grid-scale solar and wind capacity. The National Renewable Energy Development Strategy for 2026-2030 targets 5,500 MW of rooftop solar, requiring capacity to increase roughly fivefold in four years.

The 2025 net metering guidelines widened access to single-phase consumers and raised the permitted system size to 100 per cent of sanctioned load. However, the framework has not resolved how utilities will recover grid-balancing costs. More than 60 per cent of net-metered installations are concentrated in Dhaka, raising concerns about reverse power flows and voltage management on urban feeders as capacity grows.

Where rooftop generation exceeds local demand, electricity can flow back through distribution networks, affecting voltage, equipment loading and protection coordination. Changes in cloud cover can also cause rapid fluctuations in solar output, while high daytime generation reduces the demand that conventional plants must serve. Bangladesh therefore needs better forecasting and coordination between distribution utilities and the national grid operator as it expands rooftop solar.

Urgent corrections to achieve solar integration

For South Asian countries, the priority should be to align rooftop solar expansion with the technical and financial requirements of the electricity system. Energy regulators should update grid-connection codes to require new solar inverters to remain connected during specified grid disturbances and provide voltage and frequency support where technically feasible.

Over all, distribution utilities should map feeders with high solar penetration, deploy smart meters and digital monitoring systems, and share operational data with grid operators to identify reverse power flows and emerging network constraints. Grid operators should establish transparent emergency protocols specifying when solar exports may be curtailed, how affected systems will be selected, and the conditions for reconnection.

Utilities should assess where battery storage, flexible generation, demand response and network upgrades can reduce pressure during periods of surplus solar generation or sudden changes in supply. Regulators must also establish predictable arrangements for compensating utilities for the costs of integrating distributed generation, while providing clear rules on export payments and protecting existing consumer agreements from abrupt policy changes.

Implementing these measures alongside new solar capacity would improve grid reliability, support investment confidence and reduce the risk of emergency restrictions as rooftop solar expands.