Policy on the anvil for solar panel manufacturing in Pakistan: WealthPk


ISLAMABAD: Pakistan has enormous potential to generate electricity from solar power to meet its increasing energy needs. However, the country produces just 1.16% of its electricity through this abundant source of clean, green, and cheap energy.

Talking to WealthPK, Raza Abbas Shah, CEO of the Engineering Development Board (EDB), said they had initiated the task of formulating a policy for “Solar Panels and Allied Equipment Manufacturing” to promote the solar sector.

The policy stipulates no taxation for the imported plant equipment and machinery utilized in the generation of alternative renewable energy. The other recommendations include a five-year tax holiday for setting up new plants and provision of land or infrastructure to solar park developers.

The strategy will encourage investment, create job opportunities, save foreign exchange reserves through import substitution, and enhance capability for green, cheap, and affordable electricity, he added.

Engr. Asim Ayaz, Policy Manager at EDB, told WealthPK that the government had set an ambitious target of generating 30% of its electricity from renewable sources by 2030.

To achieve this target, he said, massive localization of solar components is required which would consequently decrease prices. Efforts to reduce power generation from inefficient thermal plants (in particular heavy fuel oil) must also continue, he added.

The government’s decision to eliminate 17 percent General Sales Tax (GST) on the import of solar equipment, according to the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), will promote their use in the country.

Pakistan receives solar energy almost the whole year, providing the country with a phenomenal opportunity to exploit this natural source of energy from its most irradiated areas with foreign investment.

According to the World Bank, Pakistan’s current electricity demand could be met by using only 0.071 percent of the country’s land for solar photovoltaic (solar PV) power output.

The Alternative Energy Development Board (AEDB) is pursuing 22 solar PV projects with a capacity of almost 890.80MW. The following six projects of 430MW capacity are fully functional. In January 2022, an agreement was approved between China and Pakistan to install 3,200 solar panel units in Gwadar by the end of March 2022.

In June 2021, a project worth Rs450 million was approved to shift as many as 155 railway stations to solar power.

Promoting alternative sources of energy is an urgent need of the hour. Building solar power is well within the nation’s capabilities if there is adequate political will and government investment to encourage development.