The rise of phoenix: solar panels import uncertainty and the supply chain performance of solar energy businesses

Purpose This study investigates the influence of macro-economic uncertainties, government policy fluctuation and the informal market on the supply chain performance (SCP) of the solar energy business in Pakistan. Design/methodology/approach A mixed-method approach was employed, integrating monthly secondary macro-economic data (monthly from 2018 to 2023) with survey responses from 173 solar companies in Pakistan registered with Alternate Energy Development Board (AEDB) and Pakistan Solar Association. Statistical analyses, performed with SPSS 27 software to assess the relationship among exchange rate fluctuation (ERF), tariff rate electricity, tariff rates customs, energy shortfalls (ESFs) and SCP key performance indicators (KPIs). Findings Contrary to conventional economic expectation, the study finds that currency devaluation and increase in custom tariff are positively impact and increases the import of solar panels. This counterintuitive result is primarily attributed to surging demand, the prevalence of informal supply chain channels and limited regulatory enforcement. Import demand largely fulfilled by unregistered companies, rendering government import restrictions of solar panels ineffective. Research limitations/implications The study only focused on formal registered companies with AEDB, excluding the informal companies, which significantly affect the market, and survey response rate was only 58%. The variables of import uncertainty found in literature were limited from eight to three in this study. Practical implications The finding informs policymakers on the unintended consequences of existing tariffs and currency policies. They also reveals the critical importance of supporting formal supply chain through incentives, streamlining import regulations and curbing informal imports and trade to stabilize SCP in the solar energy sector. Originality/value The study provides original insight into supply chain risk, renewable energy policy and informal market dynamics within a developing economy. It contributes to the performance management literature by empirically linking macroeconomic uncertainty, such as ERF and tariff shifts with firm level supply chain metrics. By extending institutional theory and resource-based view, the study conceptualizes how informal market responses can serve as adaptive mechanism to policy shocks, particularly a weak institutional environment. Using Pakistan's solar energy sector as a case, the research contextualized these theoretical contributions within broader emerging market dynamics, thereby enriching the discourse on supply chain resilience and strategic performance management.