The so-called RD 100% Renewable Coalition, made up of cooperatives, companies, and entities linked to the environment, announced yesterday a plan for installing solar panels in 180,000 homes and small businesses throughout the country to generate 600 megawatts of electricity in three years.
Santo Domingo – Tax incentives for solar panels represent a cost of US$250 million for the State in the last decade. The proliferation of solar panels costs electricity distribution companies (EDE) almost US$90 million per year, with excellent growth potential.
In the Dominican Republic, the National Energy Commission (CNE) has granted the definitive concession to three contracts for the installation of solar parks located in different regions of the
This law outlines specific incentives, including exemptions from import duties, value-added taxes (VAT), and income taxes for renewable energy systems, which make solar panel and battery installations more affordable. For homeowners, the Dominican government offers attractive incentives to encourage residential solar power.
Current tax incentives for individual solar panels, costing approximately $250 million in the last decade for the State and taxpayers, have also been highlighted as a concern. Despite reduced installation and generation costs, these incentives may no longer be justified for profitable solar panel investments, according to research conclusions
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Santo Domingo – Tax incentives for solar panels represent a cost of US$250 million for the State in the last decade.The proliferation of solar panels costs electricity distribution companies (EDE) almost US$90 million per year, with excellent growth potential.
This cost is due to three aspects: self-consumption (customers stop using the distributors’ network), the non-charging of power to many customers, and the fact that panel customers are being overpaid for the energy they inject into the system.
The data appears in the study “Solar Panels in the Electric Systems: Study on Distributed Generation and its Impact on Public Finances,” prepared by the firm Ecomod Business Consulting, led by the economist Magín Díaz, with the collaboration of the international consultant Jerónimo Roca, expert in public policies.
They pointed out that tax incentives for solar panels in individual solutions, including import tax exemptions and tax credits, have represented a cost of approximately US$250 million in the last decade for the State and taxpayers.
Of this amount, US$132.9 million corresponds to income tax (ISR), US$42 million to tariffs, and US$71.9 million to the Tax on the Transfer of Industrialized Goods and Services (Itbis).
They said the number of solar panel clients went from 112 in 2012 to almost 13,700 in August 2023, and the installed capacity went from less than 2 megawatts to 324 megawatts.
They stated that, given this situation, the country needs urgent regulatory changes so that distributed generation -mainly composed of individual solar panel solutions- continues to develop, but with a more equitable distribution of the costs that this segment of the electricity supply implies.
They emphasized that the cost-benefit of installing solar panels is negative since the lower CO2 emissions do not offset the tax expenditure incurred by the government.
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Santo Domingo.- Urgent regulatory changes are imperative for the sustainable development of distributed generation, predominantly consisting of individual solar panel solutions. The current model, affecting distributors with approximately $90 million, needs restructuring for equitable cost distribution, according to the technical document “Solar Panels in Electrical Systems: Study on Distributed Generation and its Impact on Public Finances” by Ecomod Business Consulting.
The proposal, detailed in the study led by economist Magín Díaz and international consultant Jerónimo Roca, advocates for regulatory and legislative modifications to foster balanced growth in solar panel generation, ensuring system stability, reliability, and equity in the electricity market.
During an economic press event organized by the Macro Ideas keynote program, Ecomod Business Consulting recommended revisiting the existing tariff scheme, the charge for distributor networks, and the incentive policy. The study emphasizes that solar technology maturity makes it unnecessary to maintain current tax facilities.
The prevailing global trend is shifting from net metering to net billing, and a draft of a new regulation proposing this change was mentioned during the event. The regulation aims to establish limits on injected energy to promote self-consumption and mitigate instability in the electrical system.
Due to the lack of effective regulations, solar panels have incurred significant costs for electricity distribution companies (EDEs), reaching around $90 million annually in 2023, mainly due to self-consumption, inadequate power charges, and overcompensation for injected energy.
Current tax incentives for individual solar panels, costing approximately $250 million in the last decade for the State and taxpayers, have also been highlighted as a concern. Despite reduced installation and generation costs, these incentives may no longer be justified for profitable solar panel investments, according to research conclusions presented by Magín Díaz.
Ecomod Business Consulting, a specialized consulting firm in taxes, economics, and finance, advocates for value-added decisions and cost optimization. Macro Ideas conferences, organized by Ecomod Consulting SRL, facilitate discussions among national and international experts to guide decision-making in the economic and financial domain of the Dominican Republic.
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