Solar panel rates have further decreased in Pakistan following a significant drop in prices in April due to increased demand in the country.
In April, the solar panels cost dropped to Rs40 per watt, marking a further decline from earlier this year. Just two years ago, solar panels that were available at Rs80 per watt can now be purchased for Rs37, according to media reports.
This reduction in prices has made solar energy systems more affordable for consumers. The cost of a five-kilowatt solar system has decreased to Rs215,000 compared to 2022 while a 10-kilowatt system is priced at Rs430,000. A 180-watt solar panel can be obtained for as low as Rs6,660.
It merits here to note that there has been no significant decrease in the prices of inverters and batteries, which are essential for installing solar systems. Solar panel dealers attribute the price decline to an increase in supply.
They claim that due to a surplus in the market, solar panel rates have dropped by 30% within just six months. Furthermore, such dealers suggest that the prices of solar panels may experience further decreases soon.
The sudden affordability of solar panels, which were previously considered expensive, raises the question of how this change occurred. The primary reason can be traced back to a large-scale solar energy utilisation plan initiated in Europe. European authorities intended to produce solar panels within the region, but Chinese companies overwhelmed the market by manufacturing and introducing a significant number of solar panels. As a result, the prices of solar panels started to decline consistently.
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Moreover, the prices of solar panels could decrease even further as a consequence of a deteriorating market. After facing market disruptions, European authorities have abandoned their plans to subsidise solar energy usage domestically. Consequently, the local solar panel manufacturing industry in Pakistan has suffered a setback, and only Chinese solar panels are available in the market.
While the affordability of solar panels is beneficial to the public, it poses challenges for Pakistani solar panel manufacturers who are now operating at a loss.
