Amicus Curiae

Richmund C. Sta. Lucia

The law on renewable energy

Richmund C. Sta. Lucia

August 26, 2015

Renewable energy offers an alternative to traditional fossil fuels (e.g., coal, natural gas, and petroleum). The trend is to shift to renewable energy, also known as “green energy” or “clean energy”.

Recently, rooftops of new commercial buildings in France are required by law to be covered either with plants or solar photovoltaic panels. These “green roofs” are also popular in Germany, Canada, and Australia.
Here in the Philippines, we can be proud of our very own Leandro Leviste from Yale University, who at his young age, is the president of Solar Philippines. In November 2014, his company activated SM North Edsa’s solar-powered rooftop -- the biggest in the world.

By definition, the term “renewable energy resources” or, simply, “renewables”, refers to energy resources that do not have an upper limit on the total quantity to be used. These include biomass, solar, wind, geothermal, ocean energy, and hydropower, among others, which conform with internationally accepted standards.

In December 2008, the Philippines enacted Republic Act (RA) No. 9513, also known as the Renewable Energy Act of 2008. The Implementing Rules and Regulations were issued in May 2009. The law affirmed the government’s commitment to accelerate the exploration and development of Philippine renewable energy resources.

RA 9513 declared the State’s policy to achieve energy security by reducing reliance on fossil fuels and minimizing exposure to price fluctuations in oil markets. The government agencies tasked to implement the law include the Department of Energy, the Energy Regulatory Commission, and the National Renewable Energy Board.

RA 9513 also seeks to increase the utilization of renewable energy resources by developing national and local capabilities in the use of renewable energy systems, and promoting their efficient and effective application by offering fiscal and non-fiscal incentives.

These incentives include: (1) income tax holiday; (2) duty-free importation of renewable machinery, equipment, and materials; (3) special realty tax rates; (4) net operating loss carry-over; (5) corporate tax rate of 10%; (6) accelerated depreciation of plant, machinery, and equipment; (7) 0% value-added tax rate; (8) tax exemption on carbon credits; and (9) cash incentive for missionary electrification.

In the course of developing sources of renewable energy in the country, certain issues need to be addressed by regulators, industry players, and other stakeholders.

These include: (1) high upfront cost and technologies; (2) non-competitiveness among market players; (3) non-viable renewable energy markets; (4) inaccessible financial packages; and (5) social acceptability.

Moreover, other issues which are inherent in renewable energy regulation (especially in relation to incentives) consist of: (1) implementation of Feed-in Tariff rules; (2) setting of Renewable Portfolio Standards; and (3) formulation of guidelines on other renewable energy policy mechanisms, such as net metering, green energy option, etc.

Even though there are challenges in developing the country’s renewable energy sector, we should not be discouraged; instead, we must continue to find ways to meet those challenges with the hope that, ultimately, it will lead the nation towards the enjoyment of sustainable green and clean energy.

In June 2011 during the launch of the National Renewable Energy Program, President Aquino described the prospects of realizing the promise of renewable energy in the Philippines. He best summed up why our country needs green and clean energy: “Renewable energy will fuel our future.”

Let us tread in this direction.

Richmund C. Sta. Lucia is an Associate of the Litigation and Dispute Resolution Department at the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).