ISLAMABAD – Pakistan is set to witness a cut in solar prices despite imposing an 18 percent Sales Tax on Imported units amid a growing trend.
Despite the government’s proposal to impose 18 percent sales tax on imported solar panels in the Federal Budget 2025-26, solar energy prices in Pakistan are expected to come down with major relief package aimed at promoting local manufacturing.
To support the domestic solar industry and reduce reliance on imports, the government announced sweeping cuts in duties and taxes on raw materials and components used in local solar panel and battery production.
Solar Panel Prices Budget 2025-26
- Zero duty on solar panel manufacturing machinery and solar cells
- No duties on aluminum and silver paste, which is important for panel production
- Duty-free import of lab testing equipment for quality control
- Tax exemptions on components for solar inverters, display boards, power boards, and monitoring systems
- Complete exemption of duties on raw materials for lithium batteries, DC fans, and DC breakers
These steps are expected to cut cost of locally manufactured solar systems, potentially offsetting the price impact of the proposed 18% sales tax on imported panels.
According to Finance Minister Muhammad Aurangzeb, sales tax proposal is aimed at encouraging local production and creating self-reliant clean energy sector in Pakistan. The move is part of a broader plan to promote renewable energy and reduce the country’s dependency on expensive fossil fuels.
Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial clarified during a Senate committee briefing that no final decision has been made on increasing the existing tax burden on imported solar panels. He assured that any new measures will carefully consider the impact on consumers and the industry.
Experts and industry stakeholders believe that incentives for local manufacturing will ultimately benefit end users. “This is a smart step. If implemented properly, local production will increase, competition will rise, and prices will go down — even with the new tax on imports,” said a senior official from the Solar Energy Association of Pakistan.
Update on solar panel prices in Pakistan as 18% tax proposed in Budget 2025-26
