Solar energy users in Pakistan are facing a sudden increase in prices, with the cost per watt of solar panels rising by PKR 8–11 in recent days. This increase comes despite winter traditionally being a low-demand season for the solar industry, surprising both consumers and investors.
Reasons Behind the Price Hike
Experts attribute the price surge to global and industrial factors. According to solar industry analyst Sharjeel Ahmed Salehri, Chinese solar module manufacturers have increased prices internationally, and the impact is directly visible in Pakistan’s local market.
A key factor is the reduction in China’s Value Added Tax (VAT) export rebate on solar modules, which is expected to be fully phased out in the second quarter of 2026. This move has increased export costs, pushing import prices higher.
Other contributing factors include:
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Rising global prices of raw materials such as polysilicon, aluminum, silver, and cables
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Upgrading of older solar technology to higher-efficiency modules, which reduces production of older panels and creates supply shortages
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Financial losses in the previous year have prompted manufacturers to adjust prices to cover costs and improve profit margins
Local Market Impact
Hassanat Khan, Senior Vice-Chairman of the Pakistan Solar Association, confirmed that the VAT rebate reduction is the primary reason for the rising prices. Although the policy will formally take effect in April, its effects are already being felt in the local market.
Muhammad Gulbaz, another industry expert, added that solar panel prices in Pakistan have already risen by 20–25%, with per-watt costs exceeding PKR 8. For example:
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A 5 kW solar system previously priced around PKR 550,000 now costs PKR 600,000 or more
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3 kW systems are experiencing similar price increases
Outlook for 2026
Industry analysts predict that solar panel prices could increase by an additional PKR 5 per watt later this year due to global supply chain changes and ongoing import costs.
Consumers are advised to plan purchases carefully, as solar energy, though cost-effective in the long run, may see short-term price volatility.
