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By Web Desk — With the removal of tax exemptions on imports of solar panels and related equipment through the mini-budget mid-January 2022, the cost of setting up solar power projects in Pakistan has risen by 30% to Rs70 per unit (watt).
This is a one-time cost for solar projects with a lifespan of 25 years.
“The cost shot up following the withdrawal of exemption from 17% sales tax and 3% additional sales tax on import of solar power equipment,” Pakistan Solar Association (PSA) Chairman M Saleem Memon told a press conference at Karachi Press Club.
According to PSA Vice-Chairman Naveed Karar, Pakistan imported solar equipment worth 2,380 megawatts in 2021.
He said the end of tax exemptions may appear to be a major obstacle to the government’s vision of a “Clean and Green Pakistan”.
Prior to this, the government set a target of increasing the share of renewable energy (solar and wind power) in total electricity generation to 30% (equivalent to 24,000MW) by 2030.
“Almost 90% of solar power projects are funded by the World Bank and USAID,” an office-bearer of the association, Zakir Ali, said, adding that the high cost may make it impossible to increase the share of renewable energy.
Digital Investment in Pakistan
“Some 1,200-1,300 containers containing solar panels and related equipment (mostly from China) have arrived at Karachi ports,” Ali said.
Karar emphasized that since the orders had been placed a couple of months before the new tax measures were implemented, the government must clear the equipment without charging taxes.
It has been reported that foreign buyers are increasing pressure on Pakistani exporters to reduce carbon emissions and invest in renewable energy.
Global Climate Risk Index ranked Pakistan as the fifth most climate-vulnerable country, with 152 extreme weather episodes over the past decade.
How Much Does a 5KW Solar System Cost in Pakistan?
With the best quality Solar Panels and Solar Inverters, a 5KW Solar System Cost in Pakistan can be up to Rs. 750,000/- PKR.
Which Capacity Makes the Best Solar System For Home in Pakistan?
Solar energy systems are available in several capacities irrespective of the system type you are installing. The required capacity of the system depends upon the electricity usage of the consumer. If the electricity usage is higher, the system capacity will be greater as well.
