Domestic manufacturing of solar panels: CCP recommends comprehensive package of incentives

ISLAMABAD: The Competition Commission of Pakistan (CCP) has recommended a comprehensive 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.

The recommendations from part of CCP’s latest study on Pakistan’s solar market, which highlights the country’s near-total reliance on imported solar panels as a key structural weakness limiting long-term affordability, market stability, and competitive growth.

The Commission has proposed the introduction of a Production-Linked Incentive (PLI) scheme, modeled on successful global practices in countries such as India, China, and the United States, to encourage local production, improve efficiency, and attract investment into the manufacturing segment.

Under the proposed framework, manufacturers would receive financial incentives tied to output and performance, creating a competitive environment that rewards scale, innovation, and efficiency.

To further support localization, the CCP has recommended the development of dedicated Special Economic Zones (SEZs) for renewable technologies, offering long-term tax relief, access to low-cost industrial land, and reliable infrastructure—aimed at lowering entry barriers for investors.

The study also underscores the importance of leveraging Pakistan’s strategic partnership with China under the China-Pakistan Economic Corridor (CPEC), proposing joint ventures between local and Chinese firms to facilitate technology transfer, skill development, and rapid scaling of domestic capabilities.

In addition, the Commission has called for export rebates and enforcement of local content requirements to ensure value addition within the country, alongside targeted support for research and development to enhance panel efficiency and innovation.

Easy and concessional financing through banks and development finance institutions has also been proposed to address capital constraints faced by potential investors in the manufacturing segment.

According to the CCP, developing a domestic solar manufacturing base would not only reduce import dependence but also create jobs, lower costs over time, and foster a more competitive and resilient energy market.

Copyright Business Recorder, 2026