New Budget Proposal Raises Fears Over Future of Pakistan’s Rapid Solar Growth

Pakistan’s rooftop solar market has sharply cut reliance on imported fuels while easing electricity bills for households, though a proposed tax rise in upcoming budget may slow this clean energy shift. A pre-budget assessment by Renewables First indicates imports of oil and liquefied natural gas fell nearly 40 percent from 2022 to 2024 as consumers adopted solar systems. Cheap solar panels sourced from China, paired with supportive tax policies, have enabled millions of homes and businesses to produce electricity and reduce dependence on the national grid. This shift has even encouraged higher usage of energy-intensive appliances like air conditioners. Stakeholders warn increasing sales tax on solar panels from 10 percent to 18 percent in budget could raise installation costs and discourage buyers. Estimates suggest Pakistan has saved $12 billion since 2021, with potential for billions more in future savings if adoption continues. Experts highlight distributed solar offers protection against currency pressure, global price shocks, and supply risks, strengthening energy resilience. Tax decision will determine Pakistan’s renewable energy future and dependence on imported fuels. Industry warns policy clarity essential to sustain solar growth across country.