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RECEIVED ©
6 JAN 204

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
SEVENTEENTH CONGRESS
Second Regular Session

House Bill No. 6960

Introduced by Representative Jose Enrique S. Garcia III

EXPLANATORY NOTE

Republic Act No. 9513 otherwise known as the “Renewable Energy Act of 2008”
established the framework for the accelerated development and advancement of
renewable energy resources and sought to institutionalize the development of national
and local capabilities in the use of renewable energy systems by providing, among
others, fiscal and non-fiscal incentives.

Whilst the Act provides generous incentives to developers of renewable energy
facilities as well as manufacturers, fabricators and suppliers of locally-produced
renewable energy equipment and components, the incentive package for small
renewable energy systems, like solar energy installed by residential consumers, is not
as attractive. The Act merely provides tax rebates for all or part of the tax paid for the
purchase of renewable energy equipment for residential, industrial, or community use
for such period as may be prescribed by the Department of Finance.

Almost a decade after the “Renewable Energy Act of 2008” became effective, a
shift, or at least a growing interest towards the installation of small renewable energy
systems by residential, or even industrial end-users, is yet to become prevalent. These
are mainly due to the prohibitive cost of putting up renewable energy systems and the
considerable number of years within which to recoup the investment. This is further
exacerbated by the minimal incentive program offered by the government to
consumers.

One of the current Administration’s goals is to transition early to clean energy.
It was reported that the Administration is bent on the eventual phase out of coal power
plants and other plants that use harmful fuels, and steer the country for more
investments in renewable energy. Just recently, President Rodrigo Roa Duterte



inaugurated the first Filipino-owned solar panel factory that would enable homes to
cut their electricity by thirty percent (30%). The factory would also produce panels
which would allow individuals to acquire a solar panel for their own homes payable on
installment.

‘The aforementioned development raises the prospect of reducing the cost for
installing solar energy systems in homes and residential buildings. Complemented by
a state-sponsored attractive incentive package and affordable financing facilities,
residential end-users would be encouraged to install small solar power systems and
gradually reduce their dependence on electricity produced by conventional fuels.

In view of the foregoing, the passage of this bill is earnestly sought.

(Ati

JOSE (QUE S. GARCIA III
Second District, Bataan


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Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezon City
SEVENTEENTH CONGRESS
Second Regular Session

House Bill No. 8960

Introduced by Representative Jose Enrique S. Garcia III

AN ACT
PROMOTING THE USE OF RENEWABLE ENERGY IN HOMES
BY PROVIDING INCENTIVES AND CREDIT FACILITIES FOR
CONSUMERS UTILIZING SMALL SOLAR POWER SYSTEMS

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Short Title. - This Act shall be known as the “Small Solar Power
System Incentives Act.”

SECTION 2. Declaration of Policy. - It is the policy of the State to promote the
utilization of renewable energy resources to reduce dependence on imported energy,
and to promote its efficient and cost-effective commercial application by providing
fiscal and non-fiscal incentives to effectively prevent or reduce harmful emissions, and
thereby balance the goals of economic growth and development with the protection of
health and the environment.

SECTION 3. Definition of Terms. - For purposes of this Act, the following
terms shall mean:

A) Small Solar Power System - rooftop-installed solar-powered equipment,
devices, and systems, for residential use to generate electricity, light, or heat water;


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B) Eligible Participant - any individual who owns a house and who the
government determines to be appropriate pursuant to the purposes of this Act;

C) Rebates - the refund or repayment by the government to a taxpayer who has
duly paid his taxes. The rebate shall be in the form of cash or similar instrument that
could be readily available for use by the beneficiary;

D) Net Metering — refers to a system, appropriate for distributed generation, in
which a distribution grid user has a two-way connection to the grid and is only charged
for his net electricity consumption and is credited for any overall contribution to the
electricity grid;

SECTION 4. Fiscal Incentives.

A) Subject to existing laws, rules, and regulations, incentives granted to
renewable energy developers as provided for in Republic Act No. 9513, otherwise
known as the Renewable Energy Act, shall be applied to eligible participants using
small solar power systems.

B) The Department of Finance (DOF) and concerned agencies shall draw-up
appropriate mechanisms for the grant of subsidies, establishment of guarantee funds,
and/or tax credits on the purchase and installation of small solar power system for
residential use. These incentive mechanisms shall be implemented in tranches
beginning from a subsidy of 75% of the basic cost for the installation of small solar
power systems on the first three years of this Act’s implementation, 50% on the next
three years, and 25% on the seventh year onward.

©) To encourage the adoption of renewable energy technologies, the DOF in
consultation with Department of Science and Technology (DOST), Department of
Energy (DOE), and Department of Trade and Industry (DTD), shall provide rebates for
all or part of the tax paid for the purchase of small solar power system for residential
or community use. These rebates shall also be implemented in tranches beginning
from a rebate of 50% of the taxes paid for the purchase of the small solar power system
on the first three years of this Act’s implementation, 75% on the next three years, and
100% on the seventh year onward.


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D) The installation of small solar power system shall be granted expedited plan
checks and shall be exempt from the payment of building permit fees. The total cost of
the solar power system shall further be excluded from the computation and payment
of real property taxes.

E) All eligible participants shall be entitled to any or all of the foregoing
incentives, as may be applicable; Provided, That, in no case shall a participant be
allowed to avail or recover total incentives and rebates in excess of the actual cost
incurred in installing the small solar power system.

SECTION 5. Financial Assistance. - There is hereby established under this Act
a program, to be jointly administered by the National Renewable Energy Board
(NREB), the Home Development Mutual Fund (HDMF), the Government Service
Insurance System (GSIS), and the Social Security System (SSS), which shall provide
for a solar rooftop credit and financing program, accessible to all eligible HDMF, GSIS,
and SSS members. Such program shall include the installation of small solar power
systems among the costs for home construction and improvement eligible for
financing.

SECTION 6. Net Metering. - Residential users of small solar power systems
with installed capacity in excess of their domestic consumption shall be allowed to
enter into net metering arrangements with distribution utilities without
discrimination. The NREB shall promulgate the mechanics for this purpose within one
year from the effectivity of this Act.

SECTION 7. Implementing Rules and Regulations. - The DOF in cooperation
with DOST, DOE, and NREB shall issue the necessary rules and regulations for the
implementation of this Act.

SECTION 8. Separability Clause. - If any provision of this Act is held invalid
or unconstitutional, the same shall not affect the validity and effectivity of the other
provisions hereof.

SECTION 9. Repealing Clause. - All laws, decrees, orders, and issuances, or
portions thereof, which are inconsistent with the provisions of this Act, are hereby
repealed, amended, or modified accordingly.


1 SECTION 10. Effectivity Clause. - This Act shall take effect fifteen (15) days
2 after its publication in the Official Gazette or in two (2) newspapers of general
3 circulation.

Approved.