Lack of incentives makes solar energy unattractive

Solar energy could very well answer the power supply problems in major urban centers of the country, but the absence of tax and duty incentives renders unviable any investment effort to commercialize solar energy in the Philippines.

By contrast, the huge duty and tax incentives in Japan, Taiwan, Korea, Australia, Thailand (a newcomer in solar energy), the US, Germany and Spain, have resulted in substantial reduction in their energy bills and reduced importation of fossil fuel in addition to the benefit reaped by the environment from such clean energy.

So, how can companies like the Solar Electric Co. Inc. (Solarco) embark on commercializing solar panels in urban centers like Metro Manila when we do not have tax and duty perks enjoyed by our counterparts in these countries?

This question was asked by Robert Lopez Puckett, president and CEO of Solarco, which has been commercializing solar, wind and micro hydro power in the country. Solarco wants to shift its focus in the urban centers after three decades of propagating renewable energy in far-flung provinces on its own or in collaboration with government and foreign-funded projects.

"It is time we concentrate on the urban centers to make a little money for us so that we will have more to spend for our corporate social responsibility (CSR) thrusts in the provinces," Puckett said.

Countries that are now heavily using solar energy—in response to the need for cleaner fuel use to forestall global warming— "are eating up all the solar panels being produced in the world, leaving very little supply for smaller users like the Philippines. Even Thailand has joined the band for cleaner fuels," he added.

In these "green" countries, homes or buildings use a combination of fuel-fired electricity and solar energy (stored in batteries) such that excess energy from solar energy are sold back to the power provider in a scheme called net metering, Puckett explained.

Germany , Japan and the US are the biggest buyers of solar energy in the world, thereby reducing the disastrous effects of global warming in their countries.

"We can do the same thing here. But we need to legislate this or Malacanang to issue an order calling for net metering so that the amount of unused (which should be agreed upon) will be deducted on the electricity to be paid by consumers. Meralco, being the distributor of grid-sourced electricity, will thus deduct the amount of unused solar power to the final bill of the consumers," he said.

With the expected increased use of solar energy, then dependence on imported bunker fuel will be substantially reduced thereby saving for the country scarce dollars now being used to buy this dirty fossil fuel, Puckett said. 

Worldwide, we are again lagging behind our neighbors in the use of green fuels, he added noting that Thailand, though new in the field, has been aggressively adopting renewable energy in its development programs.

With the recent celebration of World Environment Month, it is time we look at our green fuel options more seriously and adopt them instead of just talking endlessly about them.

"Our Senate has not even acted upon the renewable energy bill pending before it and neither has there been a serious attempt to adopt the bio-fuels law—which call for use of energy from plants and other sources for a cleaner and greener environment in the planet," he said.

Puckett said the solar panels by themselves are exempt from tariff but not the 12 percent EVAT. But collaterals like inverters, controllers and batteries (to store the energy from solar panels) are slapped 25 percent import duties aside from the 12 percent EVAT.