Energy Secretary Vincent S. Perez has issued a circular directing the DOE and its attached agencies and other government financial institutions to provide subsidies to solar PV projects.
Perez said the issuance of the circular will help the national government to achieve the 100-percent electrification target by 2006.
So far, solar PV is considered as the most cost-effective and environment-friendly technology in providing electricity service in far-flung areas of the country.
Based on the new ruling, the DOE wants government energy agencies and the private sector, including donor institutions, to streamline and rationalize the grant of subsidies to these projects.
Perez said the new circular will help ensure the sustainability of these projects, pointing out that the government has limited resources to provide lifetime subsidies.
"We are ready to provide the capital investments and other costs to put up the necessary systems for electrification in the countryside. But we are also calling on the households to give their share by helping maintain the systems themselves," he said.
Citing various projects that "do not give due consideration to economic efficiency, financial prudence and institutional capacity," Perez said the move would ensure that the solar PV projects would be implemented more efficiently in the unenergized, remote, dispersed and unviable areas of the country.
Perez said the guidelines are likewise seen to attract more investments in the local solar industry.
Under the new policy, government subsidy on solar PV projects will be determined by the DOE in consultation with other energy firms and donor agencies. The amount will be based on factors such as the electricity consumption and willingness to pay of consumers; cost, capacity, delivery mechanism and number of installations of solar PV systems; and contribution to community development.
Perez, however, noted that the utilization of solar PV systems will be according to a least-cost approach and must be consistent with the government’s Missionary Electrification Development Plan (MEDP). The MEDP contains the program for the provision of capital investment and operations regarding capacity additions in existing missionary areas.