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The Renewable Energy Act of 2008 (RA 9513) is the Philippine law that seeks to fast-track the exploration and development of renewable energy (RE) sources. It sets up a broad structure to encourage sustainable energy in several ways and through certain policies and procedures.
Main Provisions of the Renewable Energy Act
- Declaration of Policies
The Act highlights the need to harness RE resources in a bid to decrease the country’s reliance on fossil fuels, decrease the emission of dangerous gases, and boost the socio-economic activities in rural areas. - Incentives for Renewable Energy Projects
- Income Tax Holiday (ITH): RE developers are allowed a seven-year ITH from the beginning of commercial operations.
- Duty-Free Importation: Items that are used in the development of RE are not subjected to import taxes.
- Tax Credit on Domestic Capital Equipment: RE machinery, equipment and materials that are bought domestically are given tax credits.
- Special Realty Tax Rates: RE facilities have the privileged of paying a special real estate tax of 1.5% on civil works, equipment, and machinery.
- Net Metering for Renewable Energy: RE installation owners can sell electricity generated in excess to the grid with the only condition that the price to be charged cannot be lower than the average price of retail electricity.
- Renewable Portfolio Standards (RPS): Mandates the electric power industry participants to purchase a certain quantity of electricity from RE sources.
- Support for Research and Development The Act also supports the allocation of money for the RE technologies’ research, development, and implementation, thereby promoting the growth of technology and local knowledge.
- Environmental and Social Considerations RE projects should follow the standards set by the environment as well as contribute to the welfare of the people in the aspect of electricity services and employment.
Impact and Implementation
The establishment of RA 9513 has led to growth in the RE sector in the Philippines especially in solar, wind, and geothermal energy. The Department of Energy supports these measures through different programs and collaborations.
Source: Salient Provisions And Incentives Of Renewable Energy Act Of 2008