The federal government’s decision to impose an 18% sales tax on solar panels in the Budget 2025–26 has triggered a sharp spike in prices, dealing a significant setback to clean energy adoption across Pakistan. The move has caused prices to jump by nearly 20%, making solar installations unaffordable for many households.
With electricity tariffs already straining household budgets, solar energy had emerged as a cost-effective solution. However, following the new tax, consumers report that the price of a standard home solar setup has surged from Rs 350,000 to as high as Rs 600,000. “It’s no longer affordable,” said one buyer. “Paying regular electricity bills now seems cheaper.”
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Retailers, too, are feeling the impact. Many complain that suppliers are withholding stock or charging inflated rates. “We’re buying expensive and have no choice but to sell expensive,” said a shopkeeper in Lahore. Solar panels that were previously sold for Rs 17,000 are now priced at Rs 20,000 or more.
The decision has sparked widespread criticism from environmental advocates and the general public, who are urging the government to reconsider the tax. Critics argue that the move undermines national efforts to transition to renewable energy and ease pressure on the overstretched power grid.
