KARACHI: The government’s plan to levy a 17% sales tax on solar panels, inverters, and related equipment may jeopardise the National Renewable Energy Policy’s goal of achieving a 30% renewable energy share in the energy mix by 2030.
The chairman of the Pakistan Solar Association, Rana Ghulam Abbas, claimed that the rise in costs of solar energy systems/equipment is seen as a danger to the renewable energy sector’s advancement, and that all stakeholders expect a significant negative influence on the sector’s future in the nation.
He said at a time when the world is setting targets for a zero-carbon economy, supporting the trade of green products and imposing penalties on the high carbon sector, the government’s decision does not prevail as a favourable idea for its own sustainability.
The country needs to increase exports and earn foreign exchange in order to save the national economy from the current crisis. However, solar energy is becoming costly due to increased taxes, thus pushing up production cost to compete on the international market, he said.
Mr Abbas said solar equipment is an effective import substitution mechanism as it is imported one time and electricity is generated locally for the life of the equipment. He said the progressive economies of the world are developing policies to incentivise and favour the solar industry. On the contrary, the new taxes would only make Pakistan lag behind in the sector but as an economy on a holistic level, he feared.