Beating the Bill and the Blaze: Why Geothermal HVAC Is Pakistan's Answer to a Deepening Energy and Climate Crisis

Every summer in Pakistan now arrives with two familiar headlines: a new record temperature, and a new electricity bill that breaks the last one. These are not separate stories. Pakistan's worsening heat is driving up demand for cooling at the exact moment its power sector is least able to deliver electricity affordably. Between these two pressures, a third development has quietly matured: geothermal heat-pump technology — which draws on the stable temperature of the earth rather than the volatile temperature of the air — is now efficient and available enough to be installed in Pakistani homes. This article examines the scale of the energy crisis, the economics of geothermal HVAC, the accelerating pace of climate change in Pakistan, and the emergence of a domestic industry in response to all three.

1. Pakistan's energy crisis: a decade of rising costs

Pakistan's electricity crisis is no longer only about load-shedding; it is now, just as urgently, a crisis of price. Domestic power tariffs have climbed almost continuously since 2021, driven by currency depreciation, imported-fuel costs, and above all by the country's circular debt — the chain of unpaid bills that runs from consumers through distribution companies to power producers and fuel suppliers.

The scale of the increase is stark. According to official data, the basic electricity tariff for domestic consumers rose by roughly Rs 25.76 per unit in the two years to July 2024 alone — a hike of Rs 7.91 per unit in mid-2022, a further Rs 7.50 per unit in July 2023 (alongside a new Rs 3.23 per unit debt-servicing surcharge), and another Rs 7.12 per unit in July 2024, pushing the basic domestic tariff to about Rs 48.84 per unit. Between July 2023 and August 2024, regulators approved 14 separate price adjustments, adding more than Rs 455 billion to the national consumer burden — a single fuel-cost adjustment in March 2024 added Rs 7.06 per unit on its own. New tariff slabs notified in July 2024 raised rates for the smallest domestic consumers — those using 1–100 units a month — by as much as 51 percent.

Some relief followed in 2025 and 2026 as the government renegotiated terms with independent power producers and passed on lower fuel costs: NEPRA trimmed the base tariff for FY2025–26 by about Rs 1.49 per unit and approved several quarterly reductions of Re 1 to Rs 2 per unit. Yet these adjustments have done little to change the underlying structure of the bill. Reporting by Dawn shows that in FY2025 alone, Pakistani consumers paid approximately Rs 1.81 trillion in capacity charges — payments to power plants regardless of how much electricity they actually generate — equivalent to about Rs 14.3 per unit, versus only around Rs 9 per unit for the energy actually consumed. Capacity charges made up nearly 61 percent of the national electricity bill, and projections for 2026 put them at roughly Rs 17 per unit. On top of this, the power sector's circular debt — which peaked near Rs 2.6 trillion in mid-2025 — was only brought down through a Rs 1.225 trillion bank financing arrangement now being repaid by consumers through a ring-fenced Rs 3.23 per unit surcharge over the next six years.

In other words, even when headline tariffs ease slightly, Pakistani households and businesses are structurally locked into high and rising per-unit costs for years to come. This is precisely why, as electricity prices roughly doubled between 2021 and 2024, Pakistanis turned to solar power in unprecedented numbers — the country imported more solar panels in 2024 than any other nation in the world, and solar now supplies more than a quarter of Pakistan's electricity. The lesson from the solar boom is instructive: when grid electricity becomes structurally expensive, consumers do not wait for reform — they invest directly in cheaper generation and lower consumption. Geothermal HVAC extends that same logic from how electricity is generated to how it is used.

2. Geothermal energy: a renewable source with a fundamentally lower cost base

Geothermal energy differs from other renewables in one important respect: it does not depend on the weather. Solar generation stops at night and dips under cloud cover; wind is intermittent by nature. Geothermal draws on a resource that is available every hour of every day — the near-constant temperature of the earth just a few metres below the surface, which in Pakistan's climate remains close to 24°C year-round regardless of whether the air above it is at 45°C in June or near freezing in a January night in the north.

This stability is what gives geothermal its cost advantage. A geothermal heat pump does not burn fuel and does not generate heat from scratch — it simply moves heat between the building and the ground, using a small amount of electricity to run a compressor and circulation pump. Industry data compiled from multiple HVAC engineering sources shows that ground-source heat pumps typically operate at a Coefficient of Performance (COP) of 3.0 to 5.0 — for every single unit of electrical energy consumed, the system delivers three to five units of heating or cooling energy. By comparison, air-source heat pumps typically run at a COP of 2.0 to 3.5, and that figure deteriorates further in extreme heat or cold, precisely when a building needs it most. A gas or oil furnace, by definition, can never exceed 100 percent efficiency, since it must burn fuel to create the heat it delivers. On this basis, engineering comparisons commonly cite a 30 to 60 percent reduction in overall heating and cooling energy use for geothermal systems relative to conventional equipment, with some well-designed installations reaching closer to 65 percent.

3. HVAC reimagined: constant, efficient cooling and heating

Beyond the cost argument, geothermal HVAC solves a reliability problem that conventional air conditioning cannot. A standard split or window AC unit rejects heat into the outside air, so its performance is directly tied to how hot that air already is — the hotter the day, the harder and less efficiently the compressor must work, exactly when Pakistani households most need cooling. A geothermal system instead exchanges heat with the ground, which stays close to a constant temperature no matter what the sky is doing. The result is a system whose performance does not collapse during a heatwave, and one machine that both cools in summer and heats in winter — replacing the patchwork of window ACs, split units, gas heaters and portable heaters that most Pakistani homes currently juggle season to season.

This translates into three practical advantages for Pakistani buildings:

• Consistency. Every room can be held at a set temperature through the harshest days of June and the coldest nights of January, rather than cycling between overworked ACs and inadequate heaters.
• Quiet, low-maintenance operation. The compressor and major mechanical components typically sit in a single enclosed unit rather than multiple noisy outdoor condensers, and ground loops are largely maintenance-free once installed — geothermal systems generally require less servicing over their lifespan than an equivalent number of conventional units.
• Longevity. Indoor heat-pump components are typically rated for 20 to 25 years, while the underground ground loop itself is commonly expected to last 50 years or more — the most expensive and disruptive part of the installation, the drilling and looping, is a one-time cost rather than a recurring one.

4. Pakistan's changing climate: hotter summers, vanishing winters

The case for climate-resilient HVAC is reinforced by what is happening to Pakistan's climate itself. According to Pakistan's own climate survey data, 2024 was the country's hottest year on record and 2025 was its second-warmest in 65 years, with a national annual mean temperature of 23.9°C — about 1.09°C above the long-term average. Over the last fifty years, Pakistan's annual mean temperature has risen by approximately 0.5°C, and official projections point to a further rise of three to five degrees by the end of the century. Separate analysis puts Pakistan's warming over the last century at more than 1.6°C, well above the roughly 1.1°C global average — underlining the country's disproportionate exposure to a crisis it did little to cause.

The most visible symptom is the heatwave. The 2024 heatwave that struck Sindh pushed temperatures as high as 49°C, with Karachi reaching 47.2°C on 25 June — an event linked to more than 568 deaths and nearly 8,000 hospitalisations. Independent tracking cited by Energy Tracker Asia found that the frequency of heatwaves in Pakistan has increased roughly fivefold over the last three decades. Perhaps more revealing than the peak temperatures is how early these events now begin: meteorological officials quoted by The Friday Times noted that heatwaves that once started in May now regularly begin in April, and in 2025 arrived as early as March — a month that used to mark the tail end of winter, not the start of summer. This compression of the cool season, alongside more erratic and intense monsoon rainfall that contributed to widespread 2025 flooding, is precisely the pattern climate scientists associate with a warming subtropical climate: winters that arrive later and end sooner, and summers that are both longer and more extreme.

5. Kelvin Pakistan: bringing geothermal HVAC to Pakistani homes

It is against this backdrop — punishing electricity costs, a maturing and comparatively cheap geothermal technology, and a rapidly changing climate — that Kelvin Pakistan has positioned itself as Pakistan's first dedicated geothermal HVAC company. Rather than retrofitting a technology designed for milder climates, Kelvin has built its offering specifically around Pakistan's large-house market and its climate extremes.

The company's system pairs a ground-source heat pump — with boreholes drilled into ground that stays close to 24°C year-round — and a rooftop solar array sized to power the system. The installation is designed to hold every room at a set temperature from June through January, and the system is engineered to keep working even as outdoor temperatures reach 45°C, at which point conventional AC units are typically labouring at their least efficient. Because the solar roof is net-metered, ongoing electricity costs for the system are designed to approach zero — converting what is currently the largest recurring expense for large Pakistani households, the summer electricity bill, into a fixed, one-time investment.

Kelvin's model bundles the full project — site engineering, drilling, indoor units, the solar-powered mechanical room and installation — into a single fixed quote, with both one-time and installment payment options for eligible customers, followed by an ongoing maintenance plan that covers the system for as long as the homeowner keeps it. The company is currently taking pre-bookings ahead of its first installations, initially serving Gujrat, Lahore, Sialkot and Gujranwala, with plans to expand into other major cities including Islamabad, Karachi, Faisalabad and Multan.

In doing so, Kelvin is attempting to do for HVAC what Pakistan's solar boom already did for generation: shift the economics of energy away from an unpredictable grid and volatile fuel-linked tariffs, and toward a fixed, one-time investment in equipment that draws its baseline resource — in this case, the earth's stored heat — from something no fuel price, currency devaluation, or capacity-payment dispute can take away.

Conclusion

Pakistan's electricity tariffs have risen far faster than incomes, driven by a circular-debt crisis and capacity-payment structure that is unlikely to be resolved quickly. At the same time, the country is warming faster than the global average, with earlier and more intense heatwaves compressing what used to be a mild winter into an increasingly brief transition between two extremes. Geothermal HVAC sits at the intersection of both problems: it draws on a stable, renewable resource that is largely insulated from fuel and currency shocks, and it delivers three to five times more heating or cooling per unit of electricity than the systems most Pakistani households currently rely on. As companies such as Kelvin bring this technology to the Pakistani market for the first time at scale, geothermal HVAC is likely to move from a niche curiosity to a mainstream climate-adaptation strategy for the country's homes and businesses — not because it is fashionable, but because, given where electricity prices and temperatures are both headed, it may increasingly be the more rational choice.

For the physics of how these systems hold up on a 50°C afternoon, see Does geothermal cooling work in extreme heat? For the rupee-level running-cost comparison against conventional AC, see Geothermal vs AC running costs in Lahore — or start with the complete guide to geothermal in Pakistan.

Sources: Dawn, The Express Tribune, Pakistan Today (Profit), ARY News/ANI, Business Standard, checkyourbill.pk, Digital Pakistan, IEEFA, PIDE, The Friday Times, Climate Analytics, Energy Tracker Asia, Wikipedia (2024 Pakistan heat wave; Solar power in Pakistan), and published HVAC/geothermal engineering references. Figures are approximate and drawn from public reporting current as of mid-2026; readers should confirm current tariffs with NEPRA/DISCO notifications before making financial decisions.