Country offers tax relief for solar energy


Federal Minister for Industries and Production Makhdoom Syed Murtaza Mahmood has said that the government is offering certain tax incentives and allowing duty-free import of inputs, plant and machinery to promote solar energy.

He was speaking at a workshop on “Solar panel and allied equipment manufacturing policy”, organised by the Engineering Development Board (EDB).

The minister noted that Pakistan had reserves of basic raw material for producing solar wafers and could start local assembly in the first phase, which could be done by rationalising duties and taxes on solar panel imports.

Thereafter, a five-year plan was needed to further rationalise the tax and tariff regime for providing a level playing field to the local manufacturers, he observed.

The minister was of the view that the gradual approach would attract foreign and domestic investors to set up solar panel assembly facilities, and solar cell manufacturing and conversion plants for producing ingots.

The same strategy should be applied to the production of allied products like solar inverters and batteries/ storage systems, he said.

“Formulation of a solar policy is the need of the hour in the wake of energy crisis,” the minister remarked and asked the EDB to prepare a sustained policy within three months.

Hurdles would be removed for local companies and the private sector should be competitive in the international market, he said.

The prime minister has already given the nod to a plan to generate 10,000 megawatts through the solar resource to overcome the energy crisis.

Pakistan’s solar energy demand (off-grid and on-grid) is around 4 gigawatts in 2022, which is likely to increase to around 6-7GW in the next two years.

“With this demand, there is an urgent need to look for opportunities for promoting and incentivising the local manufacturing of solar panels and allied equipment,” he stressed.

The minister underlined the need to stimulate foreign investment to develop the solar industry in the form of technology tie-ups and joint ventures with countries that had a good technology base.

Giant Chinese companies are searching for opportunities to establish plants in South Asia from where they could export their products globally. “This can be a great opportunity provided Pakistan offers them timely and an enabling environment,” the minister said.

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