ISLAMABAD: Pakistani Prime Minister Shehbaz Sharif said on Tuesday no new duties would be imposed on solar panels, reiterating his government’s commitment to pursue renewable energy projects in a country considered one of the most vulnerable to climate change.

Local media outlets have widely reported in recent weeks that the government had decided to amend net metering regulations, a billing mechanism that credits solar energy system owners for the electricity they add to the grid, and would impose new tariffs on the sale and purchase of solar energy produced by users. The reports also claimed the government was planning to impose a fixed tax on those who installed solar panels.

“No new duty will be imposed on solar panels to ensure common man’s access to renewable solar energy,” Sharif was quoted as saying in a statement released by his office after a meeting of the federal cabinet. “Will deliver low-cost renewable solar energy to every citizen.”

Earlier this month, Minister of State for Power Ali Pervaiz Malik also rejected reports of new taxes on solar panels.

“There has been no decision related to the imposition of any tax or duty on solar panels or to generate money by imposing a tax on electricity production by people who have installed these panels,” Malik said.

In the proposed budget 2024-25, in a bid to promote local production of solar panels, inverters, and batteries, the government plans to slash import duties on raw materials needed to manufacture these key components.

Finance Minister Muhammad Aurangzeb also highlighted during his budget speech that the government was offering tax concessions to support the import of plant machinery and related equipment and raw materials necessary for the manufacturing of solar panels to foster local production and meet both export and domestic demands, thereby conserving valuable foreign exchange.

The budget document says subsidies are being provided on the import of goods and components required for manufacturing solar panels, inverters, and batteries to stimulate growth in the solar industry and encourage the use of renewable energy sources within the country.

Pakistan has set an ambitious target to generate 60 percent of its energy from clean and renewable energy sources by 2030. The country also plans to have 30 percent of its vehicles running on electricity by the same year, aligning with global environmental targets and efforts to reduce reliance on fossil fuels.