With the global clean energy transition in focus, one of the most crucial sectors within the energy industry that needs to transform is the power sector. In this paper, we focus on the role Pakistan’s power sector can play in the country’s clean energy transition. The scope of this paper is limited to the role of the residential power sector in Pakistan. First, we understand the current status of the power sector. Second, we understand the policies relevant to the power sector in Pakistan. Third, we focus on the residents of Pakistan and the challenges they face with respect to the structure of centralized top-to-bottom power sector, residential access to electricity, reliance on the centralized authority and unfair billing of consumed electricity. Consequently, it is established that while Pakistan needs to decarbonize its power sector, decentralization can accelerate the process. Since decentralized systems do not have a central authority to manage the system, and there is a lack of trust in the current centralized authorities, a mechanism is required for trusted, secure and tamper-proof transactions in the power sector. Blockchain, which is a digital ledger technology, can facilitate the establishment of trust in the power sector. Therefore, the role of blockchain in the power sector is studied and applications that are relevant to Pakistan are suggested. Finally, requirements to implement blockchain based applications are discussed, which includes facilitating blockchain-based startups in the power sector, empowering prosumers to take an active participatory role in the power sector, developing regulations and building capacity for innovative blockchain implementations.