No new duties will be imposed on solar panels, says PM Shehbaz

Pakistani Prime Minister Shehbaz Sharif announced on Tuesday that no new duties will be imposed on solar panels, reaffirming his government's dedication to renewable energy projects in a country highly vulnerable to climate change.

In recent weeks, local media reported that the government planned to amend net metering regulations—a billing system that credits solar energy system owners for the electricity they contribute to the grid—and introduce new tariffs on the sale and purchase of solar energy. These reports also suggested a fixed tax would be levied on those who install solar panels.

“No new duty will be imposed on solar panels to ensure common man’s access to renewable solar energy,” Sharif said in a statement released by his office after a federal cabinet meeting. “We will deliver low-cost renewable solar energy to every citizen.”

Earlier this month, Minister of State for Power Ali Pervaiz Malik also denied reports of new taxes on solar panels. “There has been no decision related to the imposition of any tax or duty on solar panels or to generate money by imposing a tax on electricity production by people who have installed these panels,” Malik stated.

In the proposed budget for 2024-25, the government aims to promote local production of solar panels, inverters, and batteries by reducing import duties on the raw materials needed to manufacture these components.

During his budget speech, Finance Minister Muhammad Aurangzeb emphasized that the government is offering tax concessions to support the import of plant machinery and related equipment and raw materials necessary for solar panel manufacturing. This move aims to foster local production, meet export and domestic demands, and conserve valuable foreign exchange.

The budget document indicates that subsidies are being provided for importing goods and components required for manufacturing solar panels, inverters, and batteries. This initiative is intended to stimulate growth in the solar industry and encourage the use of renewable energy sources within the country.

Pakistan has set an ambitious target to generate 60 percent of its energy from clean and renewable sources by 2030. Additionally, the country plans to have 30 percent of its vehicles running on electricity by the same year, aligning with global environmental goals and efforts to reduce reliance on fossil fuels.