DOE ready to adjust feed-in-tariff rates

MANILA, Philippines - The Department of Energy (DOE) said it is ready to adjust the feed-in-tariff (FIT) rates in order to compensate for the removal of the income tax holiday (ITH) for investments in renewable energy (RE).

In a chance interview at the Board of Investments (BOI) head office, Energy Secretary Jose Rene D. Almendras said the FIT rates may be adjusted given the position of the Department of Trade and Industry (DTI) that when there is already a guaranteed rate, then there will no longer be an ITH because it can be considered as double dipping.

“We can adjust the rates,” he said. The FIT is a subsidy given to RE developers and the government is in the process of determining how much the subsidy should be.

When asked if the ITH for RE projects are provided for in the RE law, Almendras said that he is not sure and that he needs to study the law. “I’m sure the BOI will follow the law,” Almendras said.

He said he also cannot say for certain if there is double dipping in investments if ITH is availed when there is already a guaranteed rate. “I don’t know. I’m not a tax expert but we need to study the law.”

Earlier, the DTI warned against double dipping of incentives, saying that when there is a guaranteed rate of return the investors are no longer entitled to ITH.

Trade Secretary Gregory Domingo said that for the FIT, if the investors already have subsidies, then they can no longer avail of the ITH. “If there is already a guaranteed rate there will be no added incentives anymore. Otherwise there will be double dipping.”

Domingo admitted that there were double dipping in the past, especially in the power sector. However, he said they have already corrected that last year and they no longer give ITH to those that have guaranteed rates.

When asked if the government can go after those that availed of double incentives, Domingo said it was already given and the new anti double dipping policy covers future availments. He said it would be difficult to make it retroactive because the incentive has already been approved and given.