Incentives Likely for Solar Panel Manufacturing, Net-Metering Boost


KARACHI: The government is expected to introduce incentives to encourage the local assembly of solar panels in the budget for 2024-25.

Pakistan Solar Association (PSA) Senior Vice-President Mohammad Zakir Ali, who was part of Prime Minister Shehbaz Sharif’s recent delegation to China, remarked, “I do not think the government will impose any new taxes or duties on solar panels, which already have zero per cent general sales tax. Only inverters carry an 18% GST.”

Ali highlighted the government’s efforts to attract Chinese manufacturers to relocate their units to Pakistan, especially in light of various restrictions imposed on China by other countries.

Despite the government’s strong commitment to promoting solar energy, no memorandum of understanding (MoU) was signed during the visit. However, multiple agreements were inked between Chinese and local entrepreneurs in different sectors.

Ali also expressed that, given the recent concerns, the government is unlikely to take negative measures on net-metering, such as reducing the power purchase rate from Rs21 to Rs12 per unit.

Chinese investors suggested imposing import duties on completely built-up (CBU) solar panels to support local manufacturers and encourage fresh investment in the solar industry. They also seek similar rebates from Pakistan as they receive from other countries.

Solar panel dealers believe the government will not alter the net-metering policy, especially after clarifying the situation following multiple media reports about a potential fixed tax on solar energy producers and changes to the net-metering mechanism.

Federal Minister for Energy Awais Khan Leghari confirmed in May that the government has no plans to end the solar net-metering policy, introduced in 2017. He assured that existing net-metering consumers would not be affected and emphasized that any policy changes will involve consultations with all stakeholders. Currently, 0.3% of the total electricity consumers in Pakistan have rooftop solar net-metering connections, totaling 113,000.

Story by Aamir Shafaat Khan

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