Govt incentivizes local manufacturing of solar panels in budget

ISLAMABAD: A number of measures have been proposed in Pakistan’s 2025-26 budget, announced on Tuesday, to incentivize local manufacturing of solar panels.

The government has announced cut in duty and taxes of the raw material for local manufacturing of solar panels.

Govt has proposed withdrawal of duty on the solar panels manufacturing machinery and its sale. While the duty on aluminum and silver paste for solar panels and lab testing equipment have been brought to zero in the federal budget proposals.

The government has also decided to encourage local manufacturing of lithium batteries and removes duty on its raw material.

Moreover, duty has also been lifted over the lithium batteries seal, copper bar and casing, while the duty on the raw material for DC fans and DC brakers has also been lifted.

Meanwhile, duty brought to zero over the raw material being used in solar panels’ display boards, battery terminal, solar inverters’ parts, control board and power board and solar systems’ monitoring board.

The government has proposed an 18% sales tax on imported solar panels as part of the 2025-26 budget, aiming to support local manufacturers and reduce reliance on imports.

The budget proposal has initiated debate over its potential impact on prices of solar panels and the overall renewable energy market.