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Incentivize residential rooftop solar installation

Published Jan 13, 2023 12:05 am
EDITORS DESK Bernie Cahiles-Magkilat The Philippines is in a precarious situation with energy generation falling short amid rising demand and the race for clean power. Worse, the government and the private sector are currently engaged in a legal battle over unmet demands for increases in supposedly fixed prices of energy supplies. This situation has put the people at the mercy of rising electricity cost and risks of brownouts. Power interruption means economic opportunity loss. No one asked me, but let me put in my two cents. One immediate solution to boost our energy supply is to mobilize the citizenry to produce their own power source instead of relying on power distribution companies or your debt-laden electric cooperative. How? By empowering individual power users. Technologies and solutions for rooftop solar or photovoltaics (PV) installations abound. The energy from the sun is free, there is no generation charge, no transmission fee, no billing at the end of the month. My boss, Manila Bulletin Editor-in-Chief Loreto Cabañes has installed solar panels on the rooftop for his household’s consumption. The total cost for 21 panels, including installation but no battery storage, was ₱330,000. Before the solar power, Mr. Cabañes was paying ₱13,000 to ₱15,000 a month to Meralco. With the solar panels on his house’s rooftop, his bill was drastically reduced by half or ₱7,000 a month. When he applied for off grid to sell his generated solar power to Meralco, based on net metering, Mr. Cabañes’ bill further went down to ₱3,000 a month. This means he could already recoup his investments in three years ahead of his solar panel’s five-year warranty period. Imagine even if just 50 percent of Filipino households get their power requirement from their own solar rooftop installation? This would drastically reduce power demand from power companies. And what an instant boost to the power supply pool. Solar panel makers have substantially reduced their prices, but the cost is still prohibitive. The key here is for government to device schemes to make residential rooftop solar installations attractive. Incentivize this activity to enable everyone qualified to install their own solar panels on their rooftops to generate power for their own needs. Incentives could be in terms of lower interest rate for loans to be used for solar rooftop installations. It could be higher buying rate when they supply to the grid. It could also be in the form of subsidized prices for solar panels. Anything that will empower all households to have their own power source. And what could be a better ESG (environment, social, governance) than this: an empowered citizenry to generate their own clean and cheaper electricity. In the US, the federal government grants investment tax credit for residential solar photovoltaics (PV). According to the US Department of Energy, a tax credit is a dollar-for-dollar reduction in the amount of income tax you would otherwise owe. For example, claiming a $1,000 federal tax credit reduces your federal income taxes due by $1,000. The federal tax credit is sometimes referred to as an Investment Tax Credit, or ITC, though it is different from the ITC offered to businesses that own solar systems. The federal residential solar energy credit is a tax credit that can be claimed on federal income taxes for a percentage of the cost of a solar PV system paid for by the taxpayer. Instead of relying on solar power investors for additional solar power capacity, let us harness each residential rooftop for potential power. Rather than converting our agricultural lands into large solar farms, let us harness the residential rooftops. Solar farms, just like golf courses and large housing developments, are subverting our food production. Their proliferation should be regulated. In fact, a study by the Department of Energy showed that the country’s grand ambition for massive solar power installations could result in weaker food sustainability as solar farms take away agricultural lands. The DOE study noted that the targeted influx of solar farm projects “reduces agricultural land since it is the most viable land for solar use as it is under flatlands, where solar radiation is easily captured.” As a rule of thumb, every 1.0-megawatt of solar PV installation will require at least one hectare of land. While there is no concrete data yet as to the number of hectares converted to solar farms, initial estimate points to 896 MW of solar capacity are being generated as of December 2022. Given this predicament, the DOE noted the need for a land use policy for agriculture vis-à-vis energy use to “mitigate the negative impact of VRE (variable renewable energy) on food security.” With that, the energy department already sounded off the need for further study on RE resource assessment, including those for solar rooftop installations, to minimize land area conversion into industrial solar parks. The Philippine Energy Plan (PEP) 2020-2040, last revised in 2021, sets a target, under the Clean Energy Scenario, for renewable energy to provide 35 percent of the power generation mix by 2030, and 50 percent by 2040. But advocates for RE must also realize that food security and clean energy are not interchangeable. Food shortages is real in this largely agricultural country. We have production shortfall in basic food as rice, sugar, and now, onions following decades of neglect. Let us prevent further overly insensitive encroachment into our agricultural lands. (The author is the assistant Business Editor of Manila Bulletin.)

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Incentivize residential rooftop solar installation editors desk BERNIE CAHILES-MAGKILAT
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