Tuesday is the day that President Gloria Macapagal Arroyo will sign into law the much anticipated Renewable Energy (RE) Bill. Dubbed as the Renewable Energy Act of 2008 it gives incentives to investors and energy producers to build renewable energy power plants instead of fossil fuel based ones. And with Philippine power demand targeted to overrun the country’s power supply by 2010, it would be ideal to meet that demand with renewable energy.

The problem with renewable energy power plants is that the cost of setting up is usually higher compared to conventional power plants but with the high price of fossil fuel in the recent months, investing in green technology is turning out to be more profitable in the long run.

Guess these Renewable Energy projects that were on hold will now be jumpstarted, hope the scramble for capital will yield results given the credit crunch we’re experiencing right now.

Benefits to be given by the RE law to Renewable Energy developers are:

1. Seven year income tax holiday
2. Carbon credits generated from renewable energy sources will be free from taxes. A 10% corporate income tax, as against the regular 30%, is also provided once the income tax holiday expires.
3. Energy self-sufficiency to 60% by 2010 from 56.6% in 2005, by tapping resources like solar, wind, hydropower, ocean and biomass energy
4. Renewable energy facilities will also be given a 1.5% realty tax cap on original cost of equipment and facilities to produce renewable energy.
5. The bill also prioritizes the purchase, grid connection and transmission of electricity generated by companies from renewable energy sources.
6. Power generated from renewable energy sources will be value added tax-exempt.
7. A net metering scheme will give capable consumers the option to generate their own power. Net metering will allow renewable energy producers to earn from the power they contribute to the grid, and are also charged for electricity drawn from the grid.

Update: Photo below of President Macapagal Arroyo and select legislators during the signing

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