Federal Minister for Power Sardar Owais Laghari Clarifies Tax Policy on Rooftop Solar Panels

Federal Minister for Power Sardar Owais Laghari has clarified that there will be no tax on the units sold to the grid from rooftop solar panels. In an interview, he explained that consumers who generate power from rooftop solar panels and export it to the grid will not be subject to any taxes. However, they will be required to pay an 18% tax on electricity drawn from the grid, just like other consumers.

Minister Laghari dismissed the misconception that, under the newly approved solar policy by the Economic Coordination Committee, consumers installing rooftop solar panels would sell electricity to the grid at a reduced rate of 8.88 PKR per unit instead of the previously stated 10 PKR per unit. He clarified that the new policy’s buy-back rate (electricity purchase rate) would remain at 10 PKR per unit.

He also highlighted that based on a 15% plant factor, if rooftop solar panel users consume 25% of solar power and 75% from the grid under the new policy, their investment payback period would range from 3.5 to 4 years.

Furthermore, the federal minister assured that the Prime Minister would soon announce a reduction in electricity tariffs. He revealed that the government had saved 1.4 trillion PKR from revised agreements with IPPs (Independent Power Producers) for the remaining years of the contracts, resulting in an annual saving of 400 billion PKR. This saving will be reflected in the tariff as announced by the country’s Chief Executive.

Minister Laghari also mentioned that the reduction in the discount rate on power sector loans to 12% would contribute to the expected decrease in tariffs.