Solar energy has become a popular alternative in Pakistan over the past few years. With electricity prices soaring and frequent power outages, thousands of households and businesses turned to solar panels as a reliable and cost-saving option. But recent policy changes could make it much harder and more expensive for people to continue switching to solar.
In a surprising move, the federal government plans to introduce an 18% sales tax on imported solar panels in the budget for the fiscal year 2025-26. This tax is part of a broader effort to generate Rs. 200 billion in revenue, in line with the demands of the International Monetary Fund (IMF). However, the decision is being seen as a serious setback for Pakistan’s renewable energy goals.
If this tax is approved, the price of solar panels and related equipment will rise sharply. This means both home users and commercial buyers will face higher upfront costs for solar installation. At the same time, the government is also slashing the benefits of net metering—a policy that allowed users to sell extra electricity back to the national grid at a favorable rate.
Previously, under net metering, consumers could get as much as Rs. 27 per unit for the excess electricity they produced. But now, the government plans to bring that rate down to just Rs. 10 per unit. On top of that, the system will shift from net metering to net billing. Instead of quarterly credits, users will receive monthly cash payments. Also, solar power agreements will now last only five years instead of seven.
Also Read: Massive 20% Eid Discount on Train Tickets Announced by Pakistan Railways
These changes mean that the payback time for a solar investment will increase, and the monthly savings will shrink. As a result, fewer people might be able to afford solar systems, and the country’s progress toward renewable energy targets could slow down.
Experts and environmental advocates are urging the government to rethink these policies. They argue that such measures not only discourage green energy adoption but also hurt long-term efforts to fight climate change and reduce dependency on fossil fuels.
With the national budget announcement just around the corner, all eyes are on the government’s final decision. For now, the future of solar energy in Pakistan hangs in the balance.
