The United Nations’ 7th Sustainable Development Goal, introduced in 2015, focuses on maintaining that everyone should have access to sustainable energy sources, such as poverty. Inefficient energy access is also a significant issue worldwide (Carlsen and Bruggemann, 2021). To maintain a healthy lifestyle, everyone needs access to power and clean cooking fuel. Eastern and southern European countries are classically identified as having the highest levels of energy poverty, while Scandinavian countries have the lowest levels. According to Thomson and Snell’s research, Bulgaria have the highest levels of energy poverty in 2007 (Thomson and Snell, 2013). Energy poverty conditions worsened when the effects of the economic crisis were visible, particularly in Bulgaria, which experienced high levels of energy poverty from 2004 to 2019 (Halkos and Gkampoura, 2021b). Ethiopia, like many African countries, was experiencing severe energy poverty. On the other hand, Egypt and Morocco have low levels of energy poverty (Halkos and Gkampoura, 2021a).

In Latin America, energy poverty is particularly severe in Haiti, Guatemala, and Honduras. Although, Mexico have low ratio of energy poverty, but still they are facing higher problems with their population’s access to energy facilities (Santillán et al., 2020). In Asian countries, energy poverty had badly effected Afghanistan and Bangladesh, India and Pakistan (Abbas et al., 2020). China has advanced economically compared to other Asian countries, resulting in a considerable reduction in energy poverty. However, energy-related problems persist in several country regions (for example, the Yellow River’s middle reaches) (Wang et al., 2015). (International Energy Agency, 2010), and Table 2 shows power installed capacity sources (Irfan et al., 2020).

Table 1 depicts the energy poverty in rural areas at the global level (International Energy Agency, 2010), and Table 2 shows power installed capacity sources (Irfan et al., 2020).

Energy poverty indicates a socio-economic problem that is not the same as “poverty” in the traditional sense. Energy poverty at the residential level means a lack of access to energy resources such as appropriate electricity or technical devices for cooking, heating, and lighting in underdeveloped countries. Traditional home appliances, including wood and biofuels, have been used for cooking and heating (Maxim et al., 2016).In the late 1970s, the phrase “fuel poverty” was first used to describe households with disproportionately high fuel expenses than the rest of the population (Liddell et al., 2012).In 1990, the total final energy consumption was 6,267,177 kilotons, and in 2018, it was 9,937,703 ktoe. It considers the global population growth, which has increased from 5.28 billion in 1990 to 7.59 billion in 2018. It is evident that world energy consumption has grown per capita and that the world’s energy use has reached extremely high levels. In 2015, fossil fuels accounted for 79.7% of total global energy use, whereas renewable energy sources accounted for 18.05%. Industry and the transportation sector consume the highest energy at the global level. In 2018, the residential sector consumed 2,109,205 ktoe, and it is the third-largest energy consumer sector. Globally, energy poverty has had a significant influence on the residential sector. In comparison, limited energy access cannot fulfill basic human needs (Halkos and Gkampoura, 2021a).

Fuel poverty is caused by a combination of variables, including low income, increased energy bills, and poor home conditions (Boardman, 1991). Energy poverty affects about 100 million individuals in Europe (Brunner et al., 2012), almost 1.2 billion people lack the access to power at global level (Maxim et al., 2016). Bouzarovski (Bouzarovski, 2014) mentions additional terms for the same purpose, such as “domestic energy deprivation” or “energy precariousness.” Households in this category spend more than 10% of their income on energy (Isherwood and Hancock, 1979). Bouzarovski defines it as “a scenario in which a household lacks a socially and materially required level of energy services in the home” (Bouzarovski, 2014). The Millennium Development Goals (MDGs) could not be accomplished without first tackling energy problems. A reliable energy source such as solar power requires sustainable development and energy poverty alleviation (Adenle, 2020).Energy is a vibrant element of sustainability, such as more effective use of energy results in cost savings and a higher quality of life (Maxim et al., 2016). A growing population means a greater need for energy. Advanced energy availability, for example, creates a foundation for better labor force employment. It expands job opportunities and boosts pay, leading to a more excellent standard of living (Markandya et al., 2016). According to Boardman’s research, the cold seasons have a higher death rate than the other seasons, partly attributable to low indoor temperature (Rudge, 2012). According to previous studies, people feel anxious when paying their unaffordable energy bills (Brunner et al., 2012). Despite the progress made in Asia, it is critical to promote policies to alleviate energy poverty and ensure that as many people as possible have access to essential energy services (Halkos and Gkampoura, 2021a).

The global demand for energy has risen dramatically, and Pakistan has no exception. Pakistan is also facing the energy poverty, which is impeding the country’s progress and harming the lives of its citizens. Pakistan’s major sectors, such as agriculture, transportation and residential, all require a constant supply of energy. All of Pakistan’s provinces are affected by energy poverty (Javed, 2016).

In 2017, another researcher described energy poverty in rural areas of Pakistan. There is a large rural-urban gap. In urban and rural Punjab, the share of energy-poor families (H) is 18.5% and 70.7%, respectively. Sindh’s ratio is 14.4%–80.3%, KP’s is 24.3–74.6%, and Baluchistan’s is 31.3%–84.9%. In urban Punjab, the intensity of deprivation (A) is 36.6%, compared to 43.5% in rural Punjab. In urban Sindh, deprivation is 37.5%, and in rural Sindh, it is 48.6%. The equivalent A values for urban and rural KP are 36.2% and 47.6%, respectively, and 47.0% and 57.6% for urban and rural Baluchistan (see Figure 1). The author stated that most energy poverty is caused by the insufficiency of contemporary cooking fuels at the household level. Conventional fuels are used in 67% of Pakistani homes. In rural KP, the use of modern fuels is relatively low, with 91% relying on traditional fuels. In rural areas, particularly in rural KPK and Baluchistan, the MEPI’s mobility factor is more important. The lack of a refrigerator in 64% of houses and a television or radio in 36% of households indicates decreased power usage for entertainment and services like cooking and heating (Mahmood and Shah, 2017).

Pakistan’s existing energy system is based on fossil fuels. 86.5 percent of the country’s energy demands are met by thermal energy (Irfan et al., 2019a), (Ahmed et al., 2016).The use of fossil fuels on a large scale has hindered economic progress. Still, it has also resulted in several ecological problems. Furthermore, natural resources are decreasing due to the excessive use of traditional energy. As a result, a new energy economy will need to be built. In this future economy, solar energy will lead to sustain energy requirements, and also reducing the price of imported fossil fuel (Sharma et al., 2012). Pakistan’s energy consumption is growing at more than 9% per year. Pakistan’s energy consumption will rise eight-fold by 2030 and twenty-fold by 2050 (Noureen, 2014).

As a result, the government is exploring alternate and sustainable energy sources to help address these issues. For electricity generation, Pakistan has tremendous contemporary energy potential. Wind energy has a potential of 346 GW (GW), whereas solar energy has a potential of 2900 GW, hydropower has a potential of 6 GW, and biomass has a potential of 5 GW (Solangi et al., 2019). Punjab’s provincial government is successfully generating electricity through renewable energy. Despite the government’s best efforts, the province’s rural areas remain underserved due to four fundamental factors. First, rural areas account for 37% of Punjab’s population, with 7432 villages still without electricity (Irfan et al., 2019b). These areas are far dispersed and disconnected from the national grid. Connecting these places to the national grid is both uneconomical and prohibitively costly. Second, in rural regions, electricity consumption is just 50 to 100 W per home, which is comparatively low than metropolitan areas (Bhutto et al., 2012). Because tiny dwellings usually only have one room, maximum two electric fans and a few lights are generally sufficient. It is very costly to supply on-grid transmission to these settlements (Arefin et al., 2018).

Due to the remoteness of the areas and the absence of infrastructure, renewable energy projects are not viable. Meanwhile, generating electricity with diesel generators is uneconomical due to the high cost of delivering oil to remote areas. As a result, grid-connected electricity is unlikely to be available in the future (Mirza et al., 2009). Finally, the country’s economic situation is precarious, and it cannot afford to import expensive fossil fuels, particularly oil, to solve its energy concerns. As a result, the government has chosen to shut down some current renewable energy initiatives that have hampered the adoption of renewable energy technology. The Punjab province has been suffering the higher energy problems due to the government’s decision since freshly begun projects are shut down entirely (Irfan et al., 2019b).

Pakistan is a developing country with significantly lower per capita energy consumption than comparable countries. It is essential to analyze the present situation and determine which areas require immediate attention. According to Awan, Sher, and Abbas (2013), the country has been experiencing higher levels of energy poverty. According to Awan et al. (2013), energy poverty affects 54.6% of households. Rural areas have a greater rate of energy poverty than metropolitan ones (Mahmood and Shah, 2017). According to Mirza and Szirmai (2010), extreme level energy poverty affects 91.7% of rural households in Punjab (Mirza and Szirmai, 2010). Due to growing population, a significant quantity of energy is required to keep everything running smoothly (Fatai et al., 2004). However, there is an energy supply shortfall, and Pakistan is experiencing its most profound energy problems. The disparity between power demand and supply has widened in recent years, most noticeable during the summer (Irfan et al., 2019a). Complete power outages lasted 10–12 h in urban areas and 16–18 h in rural areas (Farooq and Shakoor, 2013; Ghafoor and Munir, 2015; Ghafoor et al., 2016).

Solar energy has potential and true alternative energy options among several renewable energy technologies. As an example, mostly rural communities use fuelwood for household purposes because the risk of deforestation produces environmental issues and a difficult trade-off. Pakistan has a total landmass of 79,610, 000 ha (ha), but just 1,686,000 ha of forest (Irfan et al., 2020).Pakistan is located in sunbelt, has the potential of solar energy. To promote the off-grid solar power to produce the electricity in rural areas (Bataineh et al., 2014; Haghighat Mamaghani et al., 2016; Irfan et al., 2019c). Due to its high solar irradiation (Wakeel et al., 2016), the province enjoys more than 300 sunny days per year and receives 2 MW h/m2. Asian Development Bank reported that off-grid solar power is cost-effective, quick installation, and improves the socio-economic condition (Irfan et al., 2019b). Various scholars have recommended off-grid solar power in rural areas (Ghafoor and Munir, 2015), (Haghighat Mamaghani et al., 2016). Moreover, several additional studies have demonstrated that an off-grid solar PV system is the most environmentally friendly and cost-effective energy option for rural people. As a result of developing the solar PV system, people’s living conditions have improved (Sandwell et al., 2016), (Mishra and Behera, 2016) (Irfan et al., 2019b). The solar PV system is safe for human health, reduces carbon emissions, and produces no noise (Hosenuzzaman et al., 2015).The solar house has significantly enhanced internal settings and boosted thermal comfort for residents. Solar house can be an effective way to alleviate rural households’ energy poverty (Liu et al., 2018). Strong political determination, appropriate policy frameworks, and a proactive ecosystem with businesses are all necessary for a successful transition to off-grid solar-based regimes for rural and remote inhabitants (Yadav et al., 2019). According to the Alternative Energy Development Board (AEDB), 35 projects with a total capacity of 1111.4 MW are in the works under the AEDB’s policies and processes. Ten developers have been accepted for FITs (or upfront tariffs as they are known in Pakistan), and three of them have signed power purchase agreements with the public off-taker. Table 3 below shows the FITs for a 25-years Solar PPA approved by NEPRA in 2016 (Tait and Alam, 2019).

Error! Reference source not found. shows that the residential respondents in these country areas were of different ages. The survey lasted 9 weeks, with 6 weeks spent in Punjab and 3 weeks in Sindh. The average household size ranged from five to six people. Including both provinces, only 20.5% of respondents were under 18 years old, while 79.5% were older than 18 years old. According to the current employment statistics shown in Figures 3, 9 % of respondents run their own business, 8.5% were civil workers, 37% were students, and 19.5% were agriculturalists. The remaining 26% work part-time and rely on landlords for their livelihood. The respondents were also totally dependent on agriculture cultivation, with only a minority relying on wages, pensions, and grants.

This study proves that energy poverty cannot be alleviated by low income. Respondent’s income level was also a great determinant of their energy choice. Furthermore, as seen in Table 5, most households (29.5%) earned less than Rs 5000 per month. Only 11%, which comprises government officials and company owners, earned more than Rs 20,000. However, they cannot take advantage of sustainable energy due to a lack of awareness. The results indicate that people live in financial poverty, which depict their energy poverty and impact their choice of sustainable energy. According to current statistics, 60.5% earned less than Rs15,000, and just 23.5% earned more than Rs15,000. But it could not give the offer to enjoy clean energy. As previously mentioned (Clancy et al., 2003), (Wang and Jiang, 2017), their financial situation influenced their energy choice. When looking at household structure as an indicator of income, it is evident that non-poor households prefer to use clean energy (such as solar) for illumination. In contrast, poor households prefer to use solid fuel (Dash et al., 2018). The lowest quartile is the most affected by energy poverty compared to the richest quartile (Awan et al., 2022). Improvements in financial inclusion have the potential to alleviate energy poverty (Koomson and Danquah, 2021).

Figure 4 depicts the distribution level of high educational qualification achieved by respondents, indicating that around 61% of all ages are educated. This helped us during the survey because most of them understood the questions and responded correctly in English or their native languages (Urdu, Saraki, Punjabi, Sindhi, etc.). Furthermore, if given the opportunity, this would contribute to their acceptance, adaption, and usage of renewable energy.

Both provinces (Sindh and Punjab) are included. The majority of the undeveloped regions lacked adequate illumination. Respondents claimed they face load-shedding for 12–14 h each day, with some days being without power for up to 24 h. Previously published work by (Valasai et al., 2017) showed that Pakistan is suffering from chronic electricity shortages, which have resulted in forced power outages ranging from 8 to 12 h per day in urban areas and up to 18 h per day in rural regions over the last decade. Due to lack of energy, 94% of rural residents relied on one or two lights in their homes. This power does not satisfy them. Most respondents stated that they had a flawed energy system but paid extra bills. As a consequence of rising energy costs and lower monthly income, they choose to live without electricity. Table 6 shows that only 4.7% of rural households have access to solar energy. Rural inhabitants should be encouraged to use solar lamps for lighting to improve their energy quality and prevent them from using energy sources. Previous work by (Irfan et al., 2019b)showed that off-grid solar power is the supportable solution for rural areas because of its net energy, low life-cycle cost, and ecological quality. It would also allow people to work, study, and spend time with their families and online job facilities. Furthermore, 96.3% were excited about moving from filthy energy sources to clean energy sources using adequate renewable energy with the aid of government and non-government organizations. So that they can purchase solar lamps during load shedding, it is a potential prospect for the government or an independent power company to provide solar access to these energy-poor areas. Because at the time of the survey, they did not have convenient access to clean energy. The majority of them were entirely unaware of the benefits of renewable energy, highlighting the need for increased renewable energy awareness in rural areas. In Pakistan, Firewood and candles are the most vulnerable, so the government should implement policies and facilitate people in purchasing the positively effective energy sources (solar lamps, solar cooking stoves, and solar heaters). As mentioned earlier in (Urmee et al., 2009) showed that renewable energy-based rural electrification initiatives need policies and strategies. In addition, number of studies indicate that an off-grid solar PV system is the most environmentally friendly and cost-effective energy option for rural electrification (Irfan et al., 2019b), (Akikur et al., 2013). The government should create a national energy research program. Prioritize R&D investment for home-based, energy-efficient solar energy devices. University students and research groups should conduct studies to develop current, cost-effective solar energy equipment for home and commercial users (Irfan et al., 2019a).

Table 6, Table 7, Table 8 indicates that many respondents use more than one energy source to fulfill their energy demand, such as lighting, cooking, water heating, and space heating.

This section’s central purpose is to analyze energy poverty-related issues in-depth. However, due to space and length constraints in this article, only ten respondents per question are chosen, and related conversations are described in this section.

Contemporary energy sustainability is being hampered by a lack of capital and import tariff subsidies to boost local manufacturing (Abdullahi et al., 2017). Financial restraints and loan arrangements for solar energy projects, particularly at the local level, impede the smooth growth of the solar market and, on the other hand, the structure of consumer service infrastructure. The initial costs of launching a new solar energy plant are too high. Due to a lack of government subsidies, banks are reluctant to lend money to large-scale projects (Irfan et al., 2019a; Mirza et al., 2009). Low income, high-energy prices, and inefficient energy use are the primary causes of energy poverty. Like under-developed countries, developed countries also face energy poverty dilemmas due to financial constraints (Maxim et al., 2016). Low-income and inefficient energy housing stocks have resulted in high rates of energy poverty (Healy and Clinch, 2004). Due to high energy prices, energy poverty is defined as a lack of energy affordability (Brunner et al., 2013). These barriers make it very difficult to adopt and maintain sustainable energy to alleviate energy poverty in rural areas. Economic policy uncertainty has a big and negative impact on climate change (Zahra and Badeeb, 2022). Policymakers should achieve the optimal level of decentralization in order to encourage energy innovation. Inadequate fiscal decentralisation hampers public support for sustainable energy technology. The negative effects of fiscal decentralisation are minimised in nations with higher public energy RD&D expenditures (Kassouri, 2022). Improving environmental quality and fiscal management are the most critical policies for sustainability development (Sun and Razzaq, 2022). Fiscal decentralisation boosts environmental sustainability by increasing green investment and the transition to renewable energy (Sun et al., 2022a). Renewable energy development is a very important component of green economic growth (Zhao et al., 2022; Sun et al., 2022b). Inefficient resource policies can exacerbate energy poverty (Li et al., 2021). The disparity between revenue and expenditure decentralisation causes a vertical fiscal imbalance, dramatically affecting energy and environmental performance. To reduce energy and environmental efficiency losses, boost the fiscal reform and eliminating vertical fiscal imbalances (Lin and Zhou, 2021).

A lack of training facilities and a weak framework for entrepreneurship growth are technical barriers that promote energy poverty (Luthra et al., 2015). First, there is no national processing plant for solar cells, reliance on western technology for crucial parts and equipment. Dependency on western workers to build and run huge solar energy plants illustrates unreliable local technology. Second, inadequate R and D activities; in Pakistan, there is no known national institution for the R and D of the solar sector. Unauthentic solar maps are used to assess the strength of Sun radiation (Naqvi et al., 2018); (Irfan et al., 2019a). Lack of high-quality equipment, difficulty in providing maintenance, and logistical issues such as shipping and installation are significant barriers (Sovacool, 2012). All of these barriers impede the alleviation of energy poverty (Pasqualetti, 2011). One of the most effective approaches to achieve the transition to a worldwide clean energy system is through energy technology innovation. The impact of government energy technology research, development, and demonstration (RD&D) budgets on cleaner energy supply and carbon footprints, which is the fundamental input of energy technology advancements (CFP). The contribution of renewable energy to total primary energy supply is used to determine a greener energy supply (RE) (Altıntaş and Kassouri, 2020). The use of renewable energy reduces carbon emissions significantly (Sun et al., 2022c).

Lack of consumer understanding of modern energy, particularly solar energy potential, and public rejection of new technology are key barriers (Akinwale et al., 2014). Solar energy is underutilized, especially in rural areas. There is a lack of consumer education, awareness, and demonstration at the domestic level. Local communities have shown strong opposition to some solar energy projects. Residents have no idea how to fix problems on their own if they arise unexpectedly. People continue to rely on traditional forms of electricity, which creates a significant barrier for new solar energy projects. Solar power project development is hampered by a scarcity of experts and human resources. Residents are unaware of the benefits of solar energy. There are no community demonstration projects, and developers of solar energy projects are under-trained (Javed, 2016), (Irfan et al., 2019b). The barrier also negatively impacts market projection, cultural and religious faith disputes, and economic progress and sustainability (Abdullahi et al., 2017).

Long-term planning and the political willpower to develop renewable energy are absent (Luthra et al., 2015). Energy poverty is also caused by a lack of government subsidies and incentives (Iqbal, 2018). The government’s policies are unclear. There is no feed-in tariff scheme in place. Traditional energy sources are prioritized, while renewable energy is not subject to any structural regulations. Fossil fuels receive more subsidies than solar energy and other renewable energy sources (Irfan et al., 2019a), (Raheem et al., 2016b). Another problem occurs as a result of the provincial government’s approval need for energy costs. On the other hand, provincial governors are unwilling to take political risks by adopting a higher energy tariff. Despite technological advances that make renewables more economically viable, this political challenge prevents governments from adopting renewable energy sources. As a result, on-grid electricity generation attracts most private sector investment rather than off-grid energy generation (Setyowati, 2020). These barriers impede strategic work for renewable energy such as solar energy development and sustainability. The government should attempt to shift from fossil fuels to renewable energies to reduce CO2 emissions, installing solar panels on verandas for low-income residents. The most major motive for installing solar PVs in their homes is determined to be lower electricity bills. Government energy policies and financial incentives influence low-income households’ adoption of residential solar PVs (Lee and Shepley, 2020).

The illegal framework, administrative challenges, non-integration of the energy mix, non-participation of the private sector, inadequate R&D culture, and the non-interference of stakeholders are vital barriers that lead to energy poverty (Aliyu et al., 2015), (Fagbenle et al., 2011). Decentralization strategies also hamper rural renewable energy. Changes in ministerial leadership frequently drive changes in government policy and priorities. Far from mobilizing private climate finance, changes in regulatory frameworks have proved counterproductive to that goal. The private sector’s investment in renewable energy has been hampered by regulatory uncertainty. This is evident in the decreased amount of investment in renewable energy throughout the years (Setyowati, 2020). The barriers result in uncertainty about solar energy assistance, a lack of communication mechanisms to reach institutional authorities for reform, and a negative perception of the technology (Abdullahi et al., 2017). In the current setting of the fourth industrial revolution, energy research and development (R&D) and environmental sustainability are usually referred to as two interrelated developments. R&D in the energy sector is critical in tackling global environmental and energy concerns because it is a main input of energy innovations. From the 50th to the 90th quantiles, energy efficiency research and development reduces CO2 emissions significantly, with the magnitude of the negative sign becoming more obvious at the highest quantile (90th). Policymakers are developing long-term energy research and development programmed that balance the environment while encouraging energy innovation (Bilgili et al., 2021).