Solar power setup import rules tightened to leverage local industry

KARACHI: The Ministry of Commerce and Textile has tightened the rules for the import of solar equipment as part of its efforts to provide a level-playing field to the local manufacturers of renewable energy systems, a notification said on Tuesday.

The government in the Second Supplementary Finance Bill earlier this year had proposed to eliminate taxes associated with manufacturing of solar and wind energy equipment in the country, in an effort to boost the production and use of renewable power and overcome power shortages.

The ministry has now notified that solar equipment including solar or photovoltaic (PV) panels, inverters, PV generators and parts etc, are importable subject to compliance with the quality and safety standards approved by Pakistan Standards and Quality Control Authority (PSQCA).

The additional guidelines in the Import Policy Order (IPO) vide SRO 604(I)/2019 say the test reports and certificate of conformance issued by accredited laboratory/agency in the country of origin or exporting country must accompany the imported goods.

Moreover, Pre-Shipment Inspection (PSI) report should be issued by accredited inspection body in the country of origin or the exporting country for the type of inspections in accordance with the requirements of ISO/IEC 17020.

Pakistan has already waived off taxes and duties on the import of renewable energy products. The country imports more than 95 percent of the solar panels and other renewable energy systems largely from China.

The local manufacturers believe as long as the government does not impose duties on the import of finished products, the local market will not grow, which is making it hard for them to compete with tax-free, low-priced imports of foreign-built solar panels and other renewable energy equipment.

Since the notification of net-metering rules last year, the domestic and captive installations of renewable energy particularly solar are on the rise.

By introducing net-metering system, approximately 2,000MW of clean solar energy can be added to the system without any investment by the government.

With the passage of time and improved consumer confidence, the solar energy through net-metering can be increased to 10,000MW.

Recently, Fauji Cement Company commissioned a 12.5MW captive power plant at its production facility in Punjab.

In addition to this, several other corporate groups such as ENI Pakistan, Total, Indus Motor Company, Sindh Engro Coal Mining, Kohinoor Textile Mills, Abbott Pharmaceuticals, and Unilever Pakistan etc have opted for captive solar power generation.