Pakistan Solar Association Opposes Proposed GST on Solar Panels

The Pakistan Solar Association (PSA) has strongly opposed the proposed 18% General Sales Tax (GST) on imported solar panels, as outlined in the Federal Budget 2025–2026. In a representation to the Ministry of Power, the PSA warned that this measure could significantly impede Pakistan’s progress in adopting renewable energy.

According to the PSA, implementing this tax could reverse the advancements made in recent years, which have broadened access to affordable, clean energy and strengthened national energy security. The association contends that the GST will elevate the initial expenses of solar installations, potentially making the technology less accessible for households and small businesses already struggling with elevated electricity costs.

PSA Chairman Waqas Moosa stated, “As the world increasingly shifts towards clean and renewable energy sources, this tax might unintentionally hinder solar adoption and compromise our collective energy and climate objectives.”

The association also questioned the justification that the tax would bolster local manufacturing, pointing out that Pakistan lacks a substantial or highly efficient solar panel production sector. Domestic facilities primarily produce lower-wattage panels that do not compete directly with imported technologies, thus minimizing the protective impact of the tax.

In their correspondence, the PSA suggested alternative strategies, including phased incentives for local solar assembly, assistance for research and development, and GST exemptions for residential and small-scale solar consumers to balance industrial growth and clean energy accessibility.

The PSA has urged the government to reconsider the proposed GST, cautioning that increased costs could render solar energy less competitive than fossil fuels, which are environmentally damaging and deplete Pakistan’s foreign exchange reserves. The PSA reiterated its dedication to working with policymakers on sustainable approaches to achieve energy independence and ensure Pakistan’s long-term energy security.