THE ENERGY efficiency (EE) industry said it is seeking the inclusion of retrofitting and system upgrade projects in the list of investments deemed strategic in order to be eligible for fiscal incentives.
“We hope that strategic EE investments do not outrightly exclude retrofitting and system upgrades,” Philippine Energy Efficiency Alliance (PE2) President Alexander D. Ablaza told BusinessWorld in a Viber message, adding that the majority of EE projects needing third-party funding are retrofits and upgrades for existing buildings and industrial facilities.
“If we exclude retrofits and upgrades from the strategic EE investment endorsement of the Department of Energy (DoE) to the Board of Investments (BoI), then the Tier III incentives would be limited to a very few green building construction and electric vehicle projects,” he added.
Mr. Ablaza said any such exclusions will not help achieve the broader objective of raising up to P12 trillion in capital to help over 33,000 designated establishments comply with their obligations under the Energy Efficiency and Conservation Act.
During a virtual meeting with the DoE, which was consulting the public on a draft department circular on Jan. 27, Mr. Ablaza reiterated his call for the DoE and BoI to consider EE projects, even those considered non-strategic, as Tier III or to be considered “critical to the structural transformation of the economy.”
Energy efficiency projects involving upgrades have thus far been classified as Tier I. When reclassified under Tier III, companies with such EE projects can avail of one to two additional years of income tax holiday.
This incentive, Mr. Ablaza said, is crucial for EE projects to attract capital from third-party investors, such as energy service companies and third-party project developers. — Marielle C. Lucenio
