Power Division denies reports of fixed tax on solar power

ISLAMABAD: The Power Division refuted reports on Saturday regarding the imposition of a fixed tax on solar power, terming them baseless and misleading.

In a statement, it clarified that no such summary has been sent to the government regarding the imposition of a fixed tax on solar power. It said that the subsidy of Rs1.90 per unit is borne by the government, affecting around 2.5 to 3 crore poor consumers and imposing an undue burden on them.

If this trend continues, poor consumers will have to bear an additional burden of at least Rs3.35 per unit, the power division warned. It highlighted that the Net Metering Policy of 2017 aimed to promote alternative energy sources in the system, which has witnessed a rapid increase in solarisation since then. Furthermore, the division mentioned that it is studying the entire system and considering proposals and amendments to protect the poor from further burden.

The division also assured that it would safeguard the investments of 1.5 to 2 lac net metering consumers. This statement came after sources reported Friday that the Central Power Purchasing Agency (CPPA) proposed to the federal government the imposition of a tax on individuals using solar panels for residential or commercial purposes. According to sources familiar with the development, the CPPA had proposed a tax of Rs2,000 per kilowatt on residential and commercial consumers installing 12 kilowatts or more. The reports also indicated that the CPPA’s recommendation, forwarded to the Ministry of Energy Power Division for approval, would be submitted to Prime Minister Shehbaz Sharif for a final approval.