Govt dismisses reports of fixed tax on solar power

ISLAMABAD: In response to mounting speculation, the Power Division swiftly refuted claims of an impending fixed tax on solar power, issuing a statement on Saturday to quash the rumors.

“The reports of imposing a fixed tax on solar power are entirely unfounded,” the Power Division asserted. “Neither the Central Power Purchasing Agency (CPPA) nor the Power Division has proposed such a measure to the government.”

Highlighting the pivotal role of the Net Metering Policy of 2017 in fostering the adoption of alternative energy sources, the Division stressed the recent surge in solarisation across the nation. However, it acknowledged the need for careful consideration of proposals and amendments to prevent undue financial strain on vulnerable segments of society.

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The scrutiny of solar-generated power intensified following a report by Business Recorder, which suggested a potential revision of net metering electricity buyback rates from the current Rs21 per unit to Rs11 per unit. Sources cited concerns about the growing disparity in the adoption of net metering, with wealthier individuals disproportionately benefitting at the expense of lower-income consumers.

“The government recognises the importance of solarisation in our energy landscape, but current tariff rates are deemed unsustainable,” remarked government sources. The looming prospect of reduced buyback rates sparked widespread criticism, particularly among advocates for renewable energy and climate action.

Despite longstanding calls for greater investment in renewable energy and lower power tariffs, the government faces mounting pressure to address overcapacity and idle charges in the energy sector. Critics argue that slashing buyback rates for solar power could exacerbate existing challenges, undermining efforts to transition to cleaner energy sources and mitigate climate change impacts.