DOE to endorse energy efficiency projects for perks

Published October 7, 2020, 6:00 AM

by Myrna M. Velasco

The Department of Energy (DOE) will be endorsing energy efficiency projects being undertaken by energy service companies (ESCOs) for their availment of incentives with the Board of Investments.

In a draft Circular issued for public consultation by the department, it stated that it shall be recommending ESCO energy efficiency and conservation (EEC) ventures for investment perks once they have passed the mandated technical and economic evaluation criteria.

As emphasized, energy efficiency projects “which involve the installation of new equipment or system in existing plant, facility or establishment and will realize energy savings…may be qualified for BOI registration and be entitled to income tax holiday and other incentives under EO (Executive Order) 226.” For interested investors, the DOE has laid down application procedures to be channeled through its Energy Utilization and Management Bureau (EUMB) so their projects can be endorsed for warranted incentives.

One of the main criteria set forth by the agency is for the energy efficiency project to “meet at least 15-percent savings threshold” so it can be approved on its application for BOI perks.

“All registered energy efficiency projects shall be granted with pioneer incentive status,” the DOE specified; while adding that “the rate of income tax holiday shall be reckoned from the start of operation of the energy efficiency project.”

The draft circular of the department similarly prescribes that “an ESCO, certified and/or registered with the DOE, which will invest and provide services under a contract with the owner of the plant, facility or establishment, may qualify for BOI endorsement.”

It added that “the type and extent of the incentives for endorsed energy efficiency project under (the) Department Circular, will be subject to final decision of the BOI.”

On the technical evaluation, the DOE noted that “the anticipated savings – due to energy efficiency and conservation measures to be installed or adopted – will be double-checked by the technical staff without prejudice to making a separate calculation.”

In cases wherein there will be discrepancies, the energy department stipulated that “the calculation of the technical staff shall be regarded as final.”

And for the ESCO projects that had been backed for BOI incentives, the DOE has enforced several requirements that they will need to comply with.

The department said recommended ESCOs must submit not later than 30 days, a project completion report to the DOE’s EUMB upon the completion of the energy efficiency project.

They are also mandated to submit semi-annual project progress report; and to subject themselves and their projects to independent verification by the energy department.