September 24, 2021

Norms for power effectivity tasks set at P10-million investment, 15% savings

THE ENERGY department said its endorsement for energy efficiency (EE) projects to the Board of Investments (BoI) will depend on whether the project meets norms like a P10 million minimum investment and 15% energy savings. In its guidelines for recommending EE projects to the BoI,
the Department of Energy (DoE) said in a circular that such projects can be installations on new facilities or retrofitted equipment or modifications to older plants. The BoI is one of the agencies empowered to grant fiscal incentives like income tax holidays (ITHs) in areas of investment that the government deems high priority.
The DoE defines the energy-savings norm of 15% or more as the “project boundary” — the degree to which the installations make their plants more energy-efficient. Projects that can achieve annual energy savings of 15% to 20% are eligible for a 30% ITH based on the cost of the EE equipment; those with yearly savings from 20% to 25% can avail of a 40% ITH, while those with annual savings of 25% up are eligible for a 50% ITH. EE projects with annual energy savings below 15% will not receive the ITH incentive, but their registration will not be cancelled, the DoE said.
Applications for project endorsements to the BoI must be filed with the DoE’s Records Management Division. The evaluation and issuance of endorsement certificates to the BoI must be issued within 20 working days upon receipt of the required documents, the DoE said in its circular. Companies endorsed by the DoE are required to submit completion or commissioning reports within 30 days before the EE project’s commercial operations date; a monthly project progress report; and must allow the DoE to conduct an
“independent verification” of their facilities. Energy Secretary Alfonso G. Cusi signed the circular on May 11. The rules for EE project endorsements will take effect on July 2. In April, Undersecretary Jesus Cristino P. Posadas said that BoI believes that a “healthy ITH must be set in place to lower the costs of capital-intensive projects that are being developed during a global economic slump.” — Angelica Y. Yang

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