Cusi to halt FiT scheme for solar power plants

Posted on December 05, 2016
http://www.bworldonline.com/content.php?section=Economy&title=cusi-to-halt-fit-scheme-for-solar-power-plants&id=137288

THE second round of feed-in-tariff (FiT) rates for solar energy will be the last, Energy Secretary Alfonso G. Cusi said, noting that the monthly “allowance” collected from consumers to pay for solar projects has become a burden.

“That’s enough of the FiT for solar,” he said, when asked whether the Department of Energy (DoE) will back a new round of installation target for renewable energy technologies such as solar.

“As long as I don’t violate anything, I will stop the FiT,” he added.

He said he had yet to meet with Jose M. Layug, Jr., who chairs the National Renewable Energy Board (NREB), to discuss the issue. He confirmed that Mr. Layug had received his formal appointment to the post last month.

In July, NREB’s former chairman Pedro H. Maniego recommended a FiT rate of P7.66 per kilowatt-hour (kWh) for another round of 500-megawatts (MW) installation target for solar energy.

“They will look into that,” Mr. Cusi said, referring to the new NREB chair’s mandate.

“We will shoulder that for the next 20 years,” he added.

Under the FiT system, qualified developers of emerging renewable sources are offered a fixed rate per kWh of their exported electricity, but excluding the energy for their own use. Their entitlement is taken from a “feed-in-tariff allowance” billed to all on-grid electricity consumers who are supplied with power through the distribution or transmission network.

In July 2011, the DoE approved a solar installation target of 50 MW, to which the Energy Regulatory Commission (ERC) granted a guaranteed FiT rate of P9.68 per kWh. When the DoE increased the target in April 2014 to 500 MW, the ERC lowered the rate to P8.69 per kWh.

The new rate is applicable until the target is reached but only for projects that qualified by March 15, 2016.

The incentive scheme is called for under Republic Act 9513 or the Renewable Energy Law of 2008.

The FiT system is one of the policy mechanisms provided in the law being implemented by the DoE to encourage the development of the renewable energy industry.

The current FiT rate represents a premium compared to what solar power developers would get if they sell their output via the wholesale electricity spot market. -- Victor V. Saulon