Pakistan govt urged to incentivise local production in solar energy policy

Islamabad: Solar energy experts and stakeholders have asked the Pakistan government to increase support and incentives such as tax reductions and subsidies to promote local production and pave the way for a renewable energy future.

Sharing their concerns at a gathering hosted by the Engineering Development Board (EDB), the field experts said that the local producers are facing heavy taxes on components and raw materials making their products more costly and less attractive, and unaffordable to customers.

During an interaction with the Federal Minister for Industries and Production Makhdoom Syed Murtaza Mahmood, the energy investors and manufacturers also asked the government to devise a long-term and sustained solar policy with a stable and effective system in place.

The minister assured investors and experts that the government is working on ways to remove hurdles to encourage the manufacturing of solar panels in Pakistan besides offering incentives such as tax holidays, and duty-free import of input materials, plants and machinery which would expedite the transition move towards solar energy. He said that the prime minister had already approved the National Solar Energy Initiative to generate 10,000 MW of electricity through solar power to overcome the energy crisis, cut the country’s huge import bill and reduce reliance on non-renewable energy resources.

Climate-friendly policies needed

Talking to Gulf News, Asmat Khan, director of Karachi-based Paksolar Renewable Energy company said that Pakistan “urgently needs climate-friendly policies that are sustainable for the businesses, affordable for people and also power economic growth.”

He deplored the current policies, the Letters of Credit (LC) issue which hampers imports, and frequent price fluctuations are not good for business. “We need incentives and economic stability to grow our business,” he stressed. Khan says that there is growing awareness of solar energy among Pakistanis but says the high costs of initial investment often discourage people.

Local production of solar panels urged

Entrepreneurs and industrialists have also demanded the government “to promote and incentivize local manufacturing of solar panels and allied equipment” in the new policy on solar panels that the government is expected to announce soon.

However, experts say that the country’s local solar industry cannot grow without help from allied industries. “Several industries need to be set up locally to meet the demand for aluminium, copper, glass, silicon and other materials,” to set up the solar manufacturing chain in the country and achieve self-reliance, says Asmat.

Another crucial element for industry growth is solar workforce development which includes training, curriculum development, and research and development (R&D) funding that prepares the country’s workforce for solar technologies.

“The government needs to offer new research capacity to students and researchers to keep up with the latest approaches because solar panel technology is evolving very fast globally,” said Asmat whose company has been offering renewable energy solutions across Pakistan since 2015.

Pakistan needs to tap its solar energy potential

Pakistan is one of the countries that are highly dependent on energy imports and have low foreign exchange reserves, leading to a mix of energy and economic crisis. This leads to high energy bills, inflation, low socio-economic development, eventually limiting industrial and national growth.

Environmentalists and energy say that sustainable and renewable energy sources are required to address the crisis. Pakistan is endowed with potential renewable energy resources such as wind, solar, hydro, and biomass - which remain untapped. Experts say that the country requires political will to support and incentives to tap solar power more efficiently and diversify energy sources. This would ensure that the country has affordable and reliable energy supplies.

The three primary solar technologies are: Solar photovoltaics (PV) that directly convert light to electricitySolar thermal electricity Solar heating and cooling system