Fozia Azam

To encourage manufacturing and use of solar panels amid the ongoing energy crisis, the government has announced abolition of customs duty on the import of raw material required for the manufacturing of solar panels, batteries and inverters. The proposal of customs duty exemption has been made in the Finance Bill 2023-24, which will be applicable after approval by the National Assembly. The move is aimed to encourage local manufacturing of solar panels and allied equipment in the country, contributing towards the government’s goal of sustainable energy production.

This decision was welcomed by both industry experts and environmentalists. The elimination of customs duty on the import of raw material for these renewable energy infrastructure components is set to have an immediate positive impact on the production cost of solar panels in Pakistan. Mustafa Abdullah, a senior wind and solar energy project developer and Chief Executive Officer (CEO) at Moro Private Company Limited, appreciated the move, saying that the abolition of customs duty is a landmark decision that will accelerate the shift towards renewable energy in Pakistan, and put the country on a path to sustainable and inclusive growth.

"This is a historic decision as it will promote renewable energy, help reduce carbon emissions, and increase job opportunities besides benefiting the local industry," he added. The move is also in line with the Pakistan National Energy Policy, which prioritises the development and promotion of renewable energy sources, including solar power. Experts believe that the gradual approach would attract foreign and domestic investors to set up solar panel assembly facilities, and solar cell manufacturing and conversion plants for ingot production.

Pakistan's solar panel market has grown significantly over the past few years, driven by the country's vast solar potential and increasing demand for clean energy. However, the cost of imported solar panels has limited the scope for mass solarisation. With the abolition of customs duty on the import of raw material for such components, the production cost is expected to drop, thereby resulting in more affordable solar panels for consumers. Furthermore, the decision is expected to boost the local solar panel manufacturing industry, leading to job creation, exports and a significant reduction in the reliance on imports.

Credit: Independent News Pakistan-WealthPk