In 2026, the solar incentive landscape in Pakistan is undergoing a major transformation. While direct cash subsidies for general households are rare, the focus has shifted toward targeted provincial programs, interest-free financing, and a high-stakes transition from Net Metering to Net Billing.
Here is the current breakdown of solar incentives and subsidies as of February 2026.
1. Major Provincial Schemes (Punjab 2026)
The Punjab government is currently leading with the most aggressive direct-aid programs.
- CM Punjab Free Solar Scheme (Roshan Gharana):
- Incentive: 100% free 1kW to 2kW solar systems for low-income households.
- Eligibility: Domestic consumers using 0–200 units of electricity per month.
- Phase 2 Update: Phase 2 (for 101–300 units) has just launched in early February 2026.
- Punjab Solar Tubewell Scheme:
- Incentive: Up to 80% subsidy on solar systems for farmers to replace diesel-powered tubewells.
- Deadline: The first phase registration closed on January 31, 2026, with installations currently rolling out.
2. Federal Tax & Custom Exemptions
To keep hardware costs manageable, the federal government maintains several tax-related incentives:
- Import Duties: Photovoltaic (PV) cells and panels remain largely exempt from heavy custom duties to encourage adoption, though there were proposals in the 2025-26 budget to review these for commercial importers to protect local manufacturing.
- Manufacturing Incentives: A 5-year tax holiday is currently active for local manufacturers of solar panels and wind equipment to reduce Pakistan’s 95% reliance on Chinese imports.
Solar Energy and the Environment: What You Need to Know
3. The “Net Metering” Crisis of 2026
This is the most critical update for residential prosumers. In February 2026, NEPRA (the regulator) notified the Net Metering Regulations 2026, replacing the old system with Net Billing.
| Feature | Old System (2015) | New Net Billing (2026) |
| Exchange Rate | 1:1 Unit Exchange (Unit-for-Unit) | Sold at Wholesale Rate (approx. Rs. 11/unit) |
| Import Cost | Net difference in units | Full Retail Rate (Rs. 37–75/unit) |
| Contract Length | Long-term (often 7+ years) | Capped at 5 years |
Note: Following a massive public outcry in February 2026, Prime Minister Shehbaz Sharif has ordered a review petition to protect existing solar contract holders from being retroactively moved to the less profitable Net Billing system.
4. Solar Financing & Loans
Since upfront costs are the biggest barrier, the State Bank of Pakistan (SBP) and commercial banks have expanded their financing “incentives”:
- SBP Refinance Scheme: Offers low-interest loans (approx. 6%–8% total markup) for renewable energy projects.
- Meezan Solar Financing: A popular Shariah-compliant option requiring a minimum 15%–30% down payment and a minimum monthly income of Rs. 100,000 for salaried individuals.
Government Solar Scheme Pakistan : Subsidy & Eligibility Guide
Summary Table: Eligibility & Benefits
| Incentive | Provider | Target Audience | Primary Benefit |
| Free Solar Panels | Govt. of Punjab | Low-usage users (0-200 units) | 100% Free Hardware & Install |
| Tubewell Subsidy | Govt. of Punjab | Farmers (1+ acre land) | 80% Cost Coverage |
| Low-Interest Loans | SBP / Banks | Salaried & Business Owners | Interest-free or 6% markup loans |
| Tax Exemption | Federal Govt. | Local Manufacturers | 5-Year Income Tax Holiday |
Frequently Asked Questions (FAQs)
Q: Is the Federal 100% Free Solar Scheme available in Sindh or KPK? A: Currently, the massive “100% Free” initiative is primarily a Punjab-based scheme. Other provinces are expected to announce similar pilot programs in their respective upcoming provincial budgets for the 2026-27 cycle.
Q: Does Net Billing mean my solar system is no longer profitable? A: It is still profitable, but the Payback Period has increased from 1.5 years to approximately 3–4 years. In 2026, the most profitable strategy is to add Lithium batteries to consume your own power rather than selling it back to the grid for a low price.
Q: How do I apply for the PM Solar Scheme 2026? A: Applications are handled through the official portal: cmsolarscheme.punjab.gov.pk. You will need your CNIC and your electricity reference number.+1
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