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Mario Marasigan, assistant director of Department of Energy, said during his presentation in Tiwi, Albay said that the use of renewable energy could lower power rates. Marasigan said fiscal and non-fiscal incentives for projects under the Renewable Energy (RE) Act could help reduce electricity rates.

The Energy Regulatory Commission (ERC) would see to it that the benefits of the RE law trickle down to the consumers, assured Marasigan. “It’s the role of the ERC. The reduction will definitely be felt by the consumers. The ERC will determine the impact of all these incentives,” he said.

Marasigan, in saying that the RE law will lower electricity costs, is taking into consideration the tariff cuts spelled out in the implementing rules and regulations (IRRs) of the RE law. “For instance, if a wind energy project is selling P7 per kilowatt hour and after applying the tariff incentives in the RE Act, it went down to P4 to P4.50 per kWh, then it will be translated to lower rates for consumers. It depends on the ERC’s discretion. All rate-related issues are addressed by the ERC,” he said.

Fiscal incentives available to the developers of the renewable energy include:
-    one percent of gross income on RE development projects
-    income tax holiday for seven years
-    corporate tax rate of 10 percent of net taxable income
-    duty free importation
-    10-year exemption from tariff duties
-    Net operating loss carry over
-    Accelerated depreciation
-    Zero percent value-added tax rate
-    Cash incentive for missionary electrification
-    Special realty tax
-    Tax exemption on custom credits, and
-    Tax credit on domestic capital equipment.

Other incentives awaiting RE developers are, 10-year duty free importation and VAT exemption of all types of agricultural equipment and machinery and tax rebates on purchase of RE components.

The country is expecting to generate up to $10 billion in fresh capital from renewable energy development projects in the next 10 years.