Pakistan may face a sharp rise in solar panel prices due to the ongoing Middle East crisis, warn local importers. The conflict between Iran and Israel has disrupted shipping routes and caused freight costs to surge. Experts say if tensions continue, solar imports could become significantly costlier, putting pressure on consumers already burdened by high electricity rates.
According to Muhammad Faaz Diwan, Director at Diwan International Pvt Ltd, shipping costs have doubled in two months. Freight charges rose from $1,200 to $2,500 per container and could hit $3,000 if hostilities persist. Diwan added that importers now pay a 3% advance tax, and if the government reintroduces a 10% import tax, the overall burden would rise to 13%, pushing the cost per watt from Rs28 to Rs32.
Although the government reduced the proposed tax on imported solar panels from 18% to 10% in the 2025–26 budget, confusion around taxation persists. Inverex CEO Muhammad Zakir Ali said the uncertainty has rattled both businesses and consumers. Pakistan imported 17 gigawatts of solar panels in 2024 and 8 gigawatts so far in 2025, reflecting high demand amid rising power bills and load shedding.
Industry leaders argue that almost 98% of solar panels in Pakistan are imported. The remaining 2% are locally made but often fail to meet international standards. Diwan and others insist that imposing taxes without a functioning tier-1 manufacturing facility could harm the industry. They emphasized the need for government-backed incentives and clarity in tax policy to support local production.
Fusion Tech Chairman Salim Memon urged the government to launch full-scale solar panel manufacturing and bank financing schemes. He criticized the current assembly-only setup, calling it inadequate for long-term growth. Memon stressed that building a local industry is not only vital for energy independence but would also create jobs and reduce reliance on costly imports.