The Philippine Solar Power Alliance (PSPA) supports the position of the Department of Energy (DOE) to remove the burden of cleaning the environment from consumers by creating a climate change fund paid for through a carbon tax imposed on heavy polluters such as coal-fired electricity generating plants.
Reacting to the declaration of Energy Secretary Alfonso Cusi that he is reluctant to implement another feed-in tariff (FiT) program that is funded by a customer surcharge, PSPA declared it will work with DOE and Congress in developing a climate change fund that will not only finance the FiT allowance but will also cover health programs in areas near coal power plants as well as finance disaster-mitigation programs.
PSPA President Tetchi Capellan said on Wednesday, “The RE Law didn’t prescribe the FiT-All as a pass-through to the consumers.”
The intention of the law, explained Capellan, “Is not to burden the people but encourage the development of clean energy by providing attractive incentives. Currently, the installed capacity of solar power in the Philippines is almost 1 gigawatt. With the dramatic drop in module prices, solar will be at grid parity in the next six years and incentives will become irrelevant.”
In 2008, the government included the FiT in the Renewable Energy (RE) Law in order to attain energy security and mitigate climate change. This non-fiscal incentive provision granted to implementors of clean energy projects guarantees the payment of the price difference between wholesale electricity market and the FiT. At present, the price gap called the RE Charge is approved by the Energy Regulatory Commission (ERC). It amounts to P0.12 per kilowatt-hour (kWh) and is charged universally to consumers.
PSPA stressed that polluters ought to pay for environment cleanup. “Coal power plants must be responsible for addressing the health issues as well as national disasters affecting the population due to climate changes,” the group said.
Countries like India, Canada, and Australia already levy a carbon tax on heavy emitters. In India for example, the clean energy tax levied on coal power plants raised as much as 25 billion rupees ($535 million) in one year alone. This money helped finance health and renewable energy initiatives.
In the interim, however, PSPA declared in the position paper that, “Industry is prepared to work with government in raising funds that will keep the momentum of RE development in the next six years of the Duterte administration.”
PSPA said it believes some kind of mechanism can un-burden the consumers and solve the problem of funding the renewable energy program of the government as prescribed by the RE Law. The levy would effectively shift the burden of cleaning the environment from the consumers to the polluters. It would also encourage coal power plant owners to re-direct the taxes and invest instead in clean energy projects in order to balance the pollution created by coal power plants.