By Muhammad Mudassar ISLAMABAD, Feb. 24 (INP-WealthPK): The government has withdrawn tax exemption (17%) from solar power panels in the mini-budget last month and imposed an additional 3% sales tax, after which its prices increased by 30%. After implementation of this tax, the prices of solar panels and their related equipment will increase from Rs55 per watt to Rs70 per watt. This was stated by Naveed Karar, Vice-Chairman of Pakistan Solar Association (PSA), while addressing a joint news conference with the Karachi Electronic Dealers Association (KEDA). The surge in prices of solar panels equipment will significantly affect the long-term renewable energy projects in Pakistan. Pakistan is already energy deficient and imports huge quantity of oil for electricity generation, vehicles and other purposes, WealthPK reported. The import bill adds to trade deficit and weakens Pakistan’s currency. Withdrawal of tax exemption would be an obstructer to achieving the goals of government initiative “Clean and Green Pakistan”. The higher price of any commodity always discourages consumers. Pakistan needs to promote and support renewable energy sources with its full capacity. Incentivizing solar panels business and users not only fulfils the need of electricity, but also saves the environment. One of the largest portions of oil (36%) is consumed for electricity generation. According to World Bank, total installed capacity of solar and wind energy is 1,500MW. That is just 4% of total installed capacity. The government has set a goal to generate the 30% of total electricity from renewable energy. Due to low price and environmental-friendly nature, people are inclined towards solar energy. In Pakistan, people usually use solar energy for domestic, commercial and agriculture sectors. The rise in solar panels prices discourages the consumers, so people move on to alternative energy sources like grid electricity. Major portion of that electricity is produced by fossil fuel. Fossil fuel is one of the major factors that hurt the environment. A 1,000MW, Quid-e-Azam Solar Power Project was recently completed under China Pakistan Economic Corridor (CPEC). Domestic sector is the largest consumer of electricity in Pakistan that consumes almost 46.2% of total electricity. The government could give subsidies and loans to purchase solar panels at domestic level. There is a need to launch environmental awareness campaigns to highlight the importance of energy conservation and reducing greenhouse gas emissions. The government should develop a national energy research program. Ample funding should be provided for research and development (R&D) to prepare home-based, energy-efficient solar energy equipment. Research activities should be carried out by university students and research organisations to develop modern and cost-effective solar energy devices for residential and commercial users. As solar energy projects are capital intensive, only the public sector cannot cope with such huge investments. Renewable energy policies should be developed for motivating both local and foreign investors to invest in solar energy projects. Incentives such as exemptions from import duties and tax reductions will be great initiatives in this regard. Policy structure should be reformed by giving more priority to renewable energy sources instead of conventional energy.