Solar Panels Manufacturing Policy offers incentives for investors

ISLAMABAD, August 2 (Gwadar Pro)-Pakistan intends to develop solar industry under the “Made in Pakistan” initiative. The Engineering Development Board (EDB) proposes “Solar Panels & Allied Equipment Manufacturing Policy”, and is all set to submit the policy document to the Government in August.

Currently, the local manufacturers are producing solar PV panels, solar inverters, DC cables, and other equipment/parts, and except for raw material of Solar PV Panels i.e. Solar Cells. Pakistan imports almost 70-80% of PV equipment from China.

According to the draft of the policy, instead of low-frequency technology the solar inverters should be produced on “high-frequency technology” while all the raw-material and boards procured locally and imported from abroad should be exempt from sales tax and duties. Maximum Power Point Tracking (MPPT) should be encouraged for the manufacturing of Solar Charge Controllers, adding, “Maximum incentives need to be given to designers of Solar Charge Controllers, on import of raw material and parts,” as per the proposed policy.

The purchase of raw materials for mounting frames/ structures/wires, cable trays, conduits and as well as sale of finished goods should be exempt from sales tax in order to make the installation of PV Solar Systems more affordable for the masses.

The policy also encourages the manufacturing of Combiner Boxes, Power Distribution Boards, Circuit Breakers and Surge Protection Devices.

There is also a proposal for the reduction in customs duty on import of raw materials, sub-components, components, sub-assemblies used for the manufacture of solar panels and Allied Equipment and solar PV manufacturing machinery/production line equipment.

According to the policy, some solar power plants are being constructed under the China-Pakistan Economic Corridor (CPEC) in Pakistan. Six solar power projects of 430 MW are operational, and projects of capacity 460.8 MW are in various stages of planning, thus creating demand for the utility sector in the country.

In-depth interviews with solar energy experts suggest that China, with a dominant position throughout the solar supply chain in the world, will have to play a pivotal role in making Pakistan’s solar industry a success.

Chinese investors should be given maximum incentives like a ten-year tax holiday to attract them to invest in the PV Sector in Pakistan. For setting up manufacturing plants, the Special Economic Zones (SEZs) under CPEC are suitable platforms for Chinese and other foreign investors.