Energy plays a pivotal role in socio-economic development by raising standard of living. It is becoming gradually accepted that current energy systems, networks encompassing every thing from primary energy sources to final energy services, are becoming unsustainable. Development of conventional forms of energy for meeting the growing energy needs of society at a reasonable cost is the responsibility of the Governments. In recent years, public and political sensitivities to environmental issues and energy security have led to the promotion of renewable energy resources. Diversification of fuel sources is imperative to address these issues; and limited fossil resources and environmental problems associated with them have emphasized the need for new sustainable energy supply options that use renewable energies. Development and promotion of new non-conventional, alternate and renewable sources of energy such as solar, wind and bio-energy, etc. are now getting sustained attention. Solar power is one of the hottest areas in energy investment right now, but there is much debate about the future of solar technology and solar energy markets. This investigates the progress and challenges for solar power in Pakistan according to the overall concept of sustainable development, and identifies the region wise potential of solar power in Pakistan and its current status. Barriers are examined over the whole solar energy spectrum and policy issues and institutional roles and responsibilities are discussed.