Solar Prices Expected to Rise After Govt Considers 18% GST in Budget 2026

Consumers across Pakistan may soon face a major increase in solar energy costs as the government is reportedly considering raising the General Sales Tax (GST) on solar panels and related equipment from 10% to 18% in the upcoming Budget 2026.

The proposed tax hike could significantly raise the overall cost of installing solar systems for households, businesses and farmers who have increasingly sought renewable energy solutions as electricity bills keep rising and power shortages persist, local media reports said.

Solar Energy Users Fear Higher Installation Costs

Once approved, the costs of solar panels, inverters, batteries, and other critical components will likely increase, adding further financial strain on consumers facing inflation and high utility bills.

The rise in GST may hamper the country’s gradual transition to clean and affordable energy sources, industry experts warn. In recent years, the use of solar energy has grown significantly because of the declining costs of the equipment, tax incentives, and increasing electricity costs.

The renewable energy industry feels that the 18% GST could deter middle income families and small businesses from purchasing solar systems, resulting in a drop in local demand.

Solar Industry Voices Serious Concerns

Some traders, importers, and solar market representatives have raised concerns about the potential effects of the proposed tax measure. They believe that the decision would inflict damage on the renewable energy sector at a time when Pakistan is desperately seeking alternative power generation sources to curb heavy reliance on costly conventional power.

The country has seen a gradual rise in rooftop solar systems as consumers demand relief from load shedding and increasing electricity bills, experts say. But they worry that if taxes go up, they would undermine all of this, making solar power inaccessible for the masses.

Budget 2026 Expectations

The final decision regarding the GST increase is expected to be announced during the presentation of the federal Budget 2026. Those in the renewable energy value chain are waiting with anticipation for the government to rethink the plan for the growth of clean energy in Pakistan.

The possible tax increase has already raised questions in the local solar market, and many people are already looking at what solar energy costs are now before an official announcement.