Reason Behind Solar Panel Price Drop in Pakistan

In the past few months, the solar panels’ demand has increased and surprisingly, the supply has also increased. Every household in Pakistan wants to shift to a PV solar system due to the current inflation rate of the country and upcoming challenges in the power sector. The average solar plate price in Pakistan is now touching $0.14 (around Rs. 40)  per watt which is the lower per watt rate so far. Even though we know a house owner who had installed solar panels with the rate of Rs. 93 per watt in July 2023!

The solar panels start producing current when come in front of sunlight. The PV cells of the solar plate move to pass the electricity. Through this procedure, you can generate your won electricity without depending on the electric grid. The declining cost of solar panels is encouraging house owners and commercial users to embrace solar energy and shift to a source of renewable and affordable energy source. Let’s deep dive to explore which factors are affecting and becoming the reason for the solar panel price drop in Pakistan.

Why are the prices of solar panels decreasing?

Increased Competition:

It is notable that every business is fighting to increase its market share. Businessmen invest their money in a business where they see a little gap or potential. Due to the decline in the price of raw materials like silver prices for solar panels, many manufacturers and suppliers are producing solar panels as their private brand and the solar business continues to be bigger. As you know, where a financial matter is involved, the industry keeps becoming more tough and competitive with every passing day. The competition is resulting in the record cost reduction of solar panels for client retention and successful contract purposes.

Ban on the Import:

China is known as the largest supplier of solar panels across the globe and most of the solar panels were imported from Europe to China. Many new suppliers in China have emerged in the solar industry as solar plate manufacturers and are producing high-quality and significant amounts of solar plates at cheap prices. Due to the recent war between Ukraine and Russia, the prices of fuel and gas have increased. To overcome the dependency on fuel and oil, Europe started importing solar panels from China and now around 65% of China’s total exports of solar panels are heading towards Europe. That’s the another reason that cause the cause the solar panel price drop in Pakistan.

Increased Efficiency:

Due to the advancement in solar technology, solar panels are being produced with raw materials that provide high efficiency. The top-notch quality of the PV cells of solar panels converts a high amount of sunlight into solar electricity. As more electricity can be generated from the same surface area of the solar plate, you may need less number of solar plates to install a solar system to meet the needs of your household appliances. That is the another reason for the solar panel price drop in Pakistan.

Unlimited Production of Solar Panels:

Due to the increase in imports in Europe and the newly manufactured production units in China parallelly, in these circumstances, the Chinese warehouses and hubs are full of finished goods of solar panels that are ready to use or dispatch. Moreover, new solar products are also being produced daily that are integrated with modern solar technology which can provide more efficiency and result-oriented.

Solar Industry Fluctuation:

Many European companies have invested a lot of money to compete with the Chinese solar industry but they are unable to compete and near bankruptcy due to lower prices of raw materials in China. The solar panel manufacturing cost in Europe is 3x times higher than China. That’s why European countries are considering either banning the import of solar panels from China or imposing heavy taxes and custom duties on logistics operations on the Chinese imports in order to bear the production expenses. On the other hand, the Chinese suppliers and solar panel producers are taking advantage from the Chinese government on the subsidies and tax relief packages.

Innovation and Creativity:

The solar industry is growing with jet speed and new solar products are also being innovated every year, thanks to the advancement in the solar industry. New manufacturing procedures, use of raw materials, designs, and proven quality ensure the high efficiency and longevity of the solar plates and reduce production costs. Bifacial and thin-film solar panels are examples of the solar technology advancements that have increased the energy outputs and performances of the solar products and decreased the purchasing costs.

Government Subsidies and Schemes:

Because of the high potential in the solar industry, governments encourage citizens to embrace solar energy as their primary renewable energy source. Many governments have introduced subsidies, relief in taxes & duties, and schemes that caused the low price of solar panels. CM Punjab solar panel scheme is the biggest example of it. Due to investment opportunities and potential in the research and development of solar technology, governments offer grants, incentives, credits, loans, and other packages to add value to it.

Benefits of Solar Panel Price Drop in Pakistan:

The solar panel price drop in Pakistan provides numerous benefits, from the affordability of the solar system to the creation of jobs; it can reduce the stress and depression of any household. Let’s explore the benefits;

Increased Affordability of Solar Energy:

Due to the increase in the affordability of solar energy, now many people in Pakistan will install PV solar systems. A lot of companies, startups, and governments will make investment opportunities in the growing industry of solar. The low prices of solar panels will now encourage all to use solar energy as a clean source of energy. The solar panel price in Pakistan has now reduced to 51% as compared to the last 9 months.

High Demand for Solar Energy:

As the price of solar panels is decreasing, the demand for the solar panel is increasing. This opportunity has encouraged companies to produce more solar panels and generate thousands of jobs in Pakistan. Pakistani solar business is benefiting from solar panel price drop in Pakistan as they are expanding their business growth and jobs which is strengthen for the economy of the country.

Healthier Air Quality:

The conventional energy production procedures such as coal, natural gas, and mining produce pollutants in the air that are dangerous for human health which hurts the air quality of the environment so badly. Adoption of solar energy followed by the solar panel price drop in Pakistan prevents the environment from dangerous pollutants and maintains a healthier and safer eco-system which is beneficial for human health.

Ever wonder that solar panel price drop in Pakistan provides so many benefits such as affordability, high demand of solar energy, job creation, strengthen economy, reduce carbon emissions, and clean up the air quality. These benefits are not limited to accelerate the transition of a renewable energy in Pakistan but also provides strength to the world’s economical system.

How can you take advantage of the decline in solar panel prices?

As the prices of solar panels are coming down instantly, the chances of growth for both house owners and companies are bright. Below are some key points that you should adopt to take full advantage after the solar panel price drop in Pakistan.

Analyze your Electricity Bills:

Every individual in Pakistan is concerned with the rising cost of electricity no matter what background is, whether the individual is a house owner or the CEO of a company. They both pass through the same depression when they pick up their high electricity bills. So, you should take benefit from the solar panel price drop in Pakistan; you must analyze your last 6 months’ electricity bill and make a report of your consumption. After that, your educated decision to install a solar system will provide you with the freedom of energy that aligns with your energy needs.

Compare Pricing and Features:

Always bring three quotations from the solar panel suppliers as it will help you to compare the price and features they are offering. You must go with the product that offers high efficiency, durability, and warranties. As the competition of solar suppliers has increased, they do not want to lose their customers and want to retain them. The vendors will try their best to retain their customers by providing the lower price of solar panels. Most importantly, you should never compromise on the quality of the solar panels due to price. The high quality of solar panels will provide longevity and high efficiency even in low light.

Find for Government Subsidies and Packages:

Due to the solar panel price drop in Pakistan, the government is offering various programs in terms of schemes, taxes, incentives, etc. to promote and encourage solar energy adoption. You must stay updated with the government announcements regarding solar panel schemes and packages. Once you find yourself eligible for the government solar energy program, you will receive solar panels even in more lower prices that will increase the percentage of your return on investment (ROI).

Finance your Solar System Installation:

If the solar panel prices are still a barrier for you, consider financing your initial installation cost with the solar financial institutes. Many financial institutions including commercial and muslim banks, NGOs, foundations, and solar companies are offering solar financing that will bear the initial cost of your system installation in terms of easy loans, power purchase agreements (PPAs), and installments. Thanks to the financial institutions that provide solar loans and other solar schemes. Examining the energy requirements of your household will help you choose the best financial options that align with your financial objectives and future savings.

By adopting the above steps, you can take full advantage of the lower solar panel prices. Comparing pricing, updates on the government schemes, and applying for easy solar loans will help you make an informed and well-educated decision that will reduce your high energy expenses and reduce the carbon emissions on the environment.

Conclusive Thoughts:

So, after analyzing the situation, it has been observed that a turning point has been reached in the solar industry with the ongoing situation solar panel price drop in Pakistan. Following the current circumstances, the experts’ future prediction is that the solar panel price drop in Pakistan will continue to decrease in the next year and these prices will only be slightly changed in the future. Due to this downfall, solar energy has been more widely embraced for both house owners and commercial users.

The people will keep getting solar panels at cheap prices as 83% of the world’s total solar panels are exported and made in China because the raw material of solar plates in China is not as expensive as compared to other countries. Now, a question may arise in your mind, how many solar panels Pakistan will get? So, the answer is that it depends on the country’s import condition, solar importers’ contracts with China and the profit margin of solar importers.