Pakistan solar imports savings slash fossil fuel dependency as rooftop adoption soars, but a proposed tax hike on panels threatens to undo years of energy progress in the new budget.
Pakistan’s energy story has quietly changed. Oil and LNG imports dropped 40 percent between 2022 and 2024 as rooftop solar adoption accelerated across the country. Pakistan solar imports savings now stand at an estimated $12 billion in avoided LNG costs between 2021 and February 2026. Moreover, analysts project another $6.3 billion in savings if current energy price trends continue. The shift came largely from low-cost Chinese solar panels combined with Pakistan’s zero-rated tariff policy on solar equipment.
The impact on daily life has been tangible. Instead of cutting energy consumption, Pakistanis started using more of it — affordably. Cheaper solar electricity allowed households to run air conditioners more often than before. Furthermore, installed solar capacity reached roughly 53 gigawatts by March 2025, driven primarily by rooftop and distributed systems rather than centralised planning. Therefore, millions of ordinary Pakistanis drove this transformation from the bottom up.
The economic benefits extend beyond cheaper electricity bills. Pakistan reduced its exposure to currency depreciation, inflationary pressure, and external energy shocks. Furthermore, the solar expansion created a meaningful buffer against import disruptions, including risks linked to the Strait of Hormuz. Therefore, rooftop solar quietly became one of Pakistan’s most effective economic stabilisers.
However, that progress now faces a serious threat. The government is reviewing a proposal to raise sales tax on solar panels from 10 percent to 18 percent. Furthermore, if the budget approves this increase, the cost of going solar rises sharply for consumers. Therefore, the very policy that enabled Pakistan’s energy transformation could be reversed just as the benefits are compounding.
The pre-budget report from Renewables First makes the stakes clear. Pakistan saved billions, reduced fossil fuel dependency, and gave millions of households access to affordable cooling. Finally, whether the government protects that progress or sacrifices it for short-term revenue will be one of the most consequential decisions in the June 12 budget.
