Incentives likely for solar panel making, net-metering

Published June 11, 2024 Updated June 11, 2024 07:38am

KARACHI: The government may provide some incentives to encourage local assembly of solar panels in the budget 2024-25.

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

He said the government has been trying to lure Chinese manufacturers of different products to relocate their units in Pakistan after reports of some restrictions or curbs imposed on China by various countries.

Mr Zakir said that despite the government’s strong commitment to promoting solarisation in the country, “no memorandum of understanding (MoU) had been signed, though multiple agreements had been inked between Chinese and local entrepreneurs in different sectors.”

No MoU signed to attract solar investment during PM’s China visit

He was of the view that after a recent hue and cry, the government may not take any negative measures on net-metering, like reducing the power purchase rate from the current Rs21 to Rs12 per unit.

He said Chinese investors, in interactions during the visit, had said that Pakistan needed to impose an import duty on the arrival of completely built-up (CBU) solar panels so that the local panel manufacturers could work in a healthy environment.

He added that this would also promote fresh investment in the solar industry.

He added that when Chinese companies export to Pakistan or other countries, they get a rebate, which is the same as what they want from Pakistan after investing in the solar sector.

Some solar panel dealers said that the government is unlikely to touch the net-metering issue, which had already forced the government to clarify the situation after multiple media reports regarding the imposition of a fixed tax on citizens who produce energy through solar systems, a cut in the power purchase rate for domestic net-metering consumers, and the replacement of net metering with a gross-metering mechanism.

Federal Minister for Energy Awais Khan Leghari said in the third week of May that the government had no plans to end the solar net-metering policy.

The policy was introduced in 2017, and few people applied for net-metering owing to the high prices of solar panels. Mr Leghari assured that consumers who had already installed solar power and had a net-metering contract with Disco “would not be affected at all.”

He added that the government will also encourage net-metering in the future, and any change in the policy will be made after taking all stakeholders into confidence.

Leghari claimed that 0.3pc of the total electricity consumers have rooftop solar net-metering connections. “The number of total net metering connections has reached 113,000.”

Published in Dawn, June 11th, 2024

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Budget for stabilisation
Updated 13 Jun, 2024

Budget for stabilisation

The proposed steps lack any “disruptive policy changes", especially to "right-size" the govt, and doubts remain on authorities' ability to enforce new measures.
State of the economy
13 Jun, 2024

State of the economy

THE current fiscal year is but another year lost. Going by the new Pakistan Economic Survey, which maps the state of...
Unyielding onslaught
Updated 13 Jun, 2024

Unyielding onslaught

SEVEN soldiers paid the ultimate price in Lakki Marwat on Sunday when their vehicle was blown up in an IED attack,...
X diplomacy
Updated 12 Jun, 2024

X diplomacy

Both states can pursue adversarial policies, or come to the negotiating table and frankly discuss all outstanding issues, which can be tackled through dialogue.
Strange decisions
12 Jun, 2024

Strange decisions

THE ECP continues to wade deeper and deeper into controversy. Through its most recent decision, it had granted major...
Interest rate cut
Updated 11 Jun, 2024

Interest rate cut

The decision underscores SBP’s confidence that economic stability is gaining traction.