ISLAMABAD: The Competition Commission of Pakistan (CCP) has proposed a wide-ranging package of fiscal and industrial incentives, including 10-year tax exemptions, subsidized industrial land, export rebates, and local content requirements (LCRs), to promote domestic manufacturing of solar panels in Pakistan.
The recommendations have been presented in the CCP’s latest study on Pakistan’s solar market, which identifies the country’s overwhelming dependence on imported solar panels as a major structural challenge affecting long-term affordability, market stability, and sustainable competition.
According to the study, Pakistan’s solar energy market has expanded rapidly in recent years, but the absence of a strong domestic manufacturing base has left the sector vulnerable to external supply disruptions, exchange rate volatility, and import-related cost pressures.
To address these concerns, the CCP has recommended the introduction of a Production-Linked Incentive (PLI) scheme, inspired by successful policy models implemented in countries such as India, China, and the United States. Under this proposed system, manufacturers would receive financial incentives based on production output and performance, encouraging greater efficiency, innovation, and investment in the sector.
The Commission has also proposed the creation of dedicated Special Economic Zones (SEZs) for renewable energy technologies. These zones would offer long-term tax relief, affordable industrial land, and improved infrastructure to help reduce entry barriers and attract both local and foreign investors into solar panel manufacturing.
The study further highlights the potential role of China-Pakistan Economic Corridor (CPEC) in supporting the localization agenda. The CCP has recommended promoting joint ventures between Pakistani and Chinese firms to facilitate technology transfer, workforce training, and faster development of domestic production capacity.
In addition, the Commission has called for the introduction of export rebates and the enforcement of local content requirements to ensure higher value addition within Pakistan’s economy. It has also stressed the need for stronger support for research and development (R&D) to improve panel efficiency, product quality, and technological innovation.
To overcome financing challenges, the CCP has suggested easy and concessional financing through commercial banks and development finance institutions, enabling investors to establish and expand manufacturing facilities with lower capital constraints.
According to the CCP, building a local solar manufacturing industry could significantly reduce Pakistan’s reliance on imports, generate employment opportunities, lower solar technology costs over time, and create a more competitive and resilient clean energy market.
With solar adoption rising across households, businesses, and industries, the Commission believes that targeted policy support could help Pakistan turn growing energy demand into a long-term industrial opportunity.
