December 16, 2008

REPUBLIC ACT NO. 9513

AN ACT PROMOTING THE DEVELOPMENT, UTILIZATION AND

COMMERCIALIZATION OF RENEWABLE ENERGY RESOURCES AND FOR OTHER
PURPOSES

CHAPTER I
Title and Declaration of Policies
SECTION 1. Short Title. — This Act shall be known as the "Renewable Energy Act
of 2008". It shall hereinafter be referred to as the "Act".
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SECTION 2. Declaration of Policies. — It is hereby declared the policy of the State

to:
(a) Accelerate the exploration and development of renewable energy resources
such as, but not limited to, biomass, solar, wind, hydro, geothermal and
ocean energy sources, including hybrid systems, to achieve energy self-
reliance, through the adoption of sustainable energy development
strategies to reduce the country's dependence on fossil fuels and thereby
minimize the country's exposure to price uctuations in the international
markets, the effects of which spiral down to almost all sectors of the
economy;
(b) Increase the utilization of renewable energy by institutionalizing the
development of national and local capabilities in the use of renewable
energy systems, and promoting its e cient and cost-effective commercial
application by providing fiscal and nonfiscal incentives;
(c) Encourage the development and utilization of renewable energy resources as
tools to effectively prevent or reduce harmful emissions and thereby
balance the goals of economic growth and development with the
protection of health and the environment; and
(d) Establish the necessary infrastructure and mechanism to carry out the
mandates specified in this Act and other existing laws.
SECTION 3. Scope. — This Act shall establish the framework for the accelerated
development and advancement of renewable energy resources, and the development of
a strategic program to increase its utilization.
SECTION 4. De nition of Terms. — As used in this Act, the following terms are
herein defined.
(a) "Biomass energy systems" refers to energy systems which use biomass
resources to produce heat, steam, mechanical power or electricity through
either thermochemical, biochemical or physico-chemical processes, or
through such other technologies which shall comply with prescribed
environmental standards pursuant to this Act.
(b) "Biomass resources" refers to non-fossilized, biodegradable organic material
originating from naturally occurring or cultured plants, animals and micro-
organisms, including agricultural products, by-products and residues such
as, but not limited to, biofuels except corn, soya beans and rice but
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 including sugarcane and coconut, rice hills, rice straws, coconut husks and
shells, corn cobs, corn stovers, bagasse, biodegradable organic fractions
of industrial and municipal wastes that can be used in bioconversion
process and other processes, as well as gases and liquids recovered from
the decomposition and/or extraction of non-fossilized and biodegradable
organic materials.
(c) "Board of Investments (BOI)" refers to an attached agency of the Department
of Trade and Industry created under Republic Act No. 5186, as amended.
(d) "Co-generation systems" refers to facilities which produce electrical and/or
mechanical energy and forms of useful thermal energy such as heat or
steam which are used for industrial, commercial heating or cooling
purposes through the sequential use of energy.
(e) "Department of Energy (DOE)" refers to the government agency created
pursuant to Republic Act No. 7638 whose functions are expanded in
Republic Act No. 9136 and further expanded in this Act.
(f) "Department of Environment and Natural Resources (DENR)" refers to the
government agency created pursuant to Executive Order No. 192. SEDIaH

(g) "Department of Finance (DOF)" refers to the government agency created

pursuant to Executive Order No. 127, as amended.
(h) "Department of Science and Technology (DOST)" refers to the government
agency created pursuant to Executive Order No. 128.
(i) "Department of Trade and Industry (DTI)" refers to the government agency
created pursuant to Executive Order No. 133.
(j) "Distributed generation" refers to a system of small generation entities
supplying directly to the distribution grid, any one of which shall not
exceed one hundred kilowatts (100 kW) in capacity.
(k) "Distribution of Electricity" refers to the conveyance of electricity by a
Distribution Utility through its distribution system pursuant to the
provision of Republic Act No. 9136.
(l) "Distribution Utility (DU)" refers to any electric cooperative, private corporation,
government-owned utility or existing local government unit which has an
exclusive franchise to operate a distribution system in accordance with its
franchise and Republic Act No. 9136.
(m) "Electric Power Industry Reform Act of 2001" or Republic Act No. 9136
refers to the law mandating the restructuring of the electric power sector
and the privatization of the National Power Corporation (NPC).
(n) "Energy Regulatory Commission (ERC)" refers to the independent quasi-
judicial regulatory agency created pursuant to Republic Act No. 9136. cTDIaC

(o) "Generation Company" refers to any person or entity authorized by the ERC to
operate facilities used in the generation of electricity.
(p) "Generation Facility" refers to a facility for the production of electricity and/or
thermal energy such as, but not limited to, steam, hot or cold water.
(q) "Geothermal energy" as used herein and in the context of this Act, shall be
considered renewable and the provisions of this Act is therefore
applicable thereto if geothermal energy, as a mineral resource, is produced
through: (1) natural recharge, where the water is replenished by rainfall and
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 the heat is continuously produced inside the earth; and/or (2) enhanced
recharge, where hot water used in the geothermal process is re-injected
into the ground to produce more steam as well as to provide additional
recharge to the convection system.
(r) "Geothermal Energy Systems" refers to machines or other equipment that
converts geothermal energy into useful power.
(s) "Geothermal Resources" refers to mineral resources, classi ed as renewable
energy resource, in the form of: (i) all products of geothermal processes,
embracing indigenous steam, hot water, and hot brines; (ii) steam and
other gases, hot water, and hot brines resulting from water, gas, or other
uids arti cially introduced into geothermal formations; (iii) heat or
associated energy found in geothermal formations; and (iv) any by-product
derived from them.
(t) "Government Share" refers to the amount due the National Government and
local government units from the exploitation, development, and utilization
of naturally-occurring renewable energy resources such as geothermal,
wind, solar, ocean and hydro excluding biomass.
(u) "Green Energy Option" refers to the mechanism to empower end-users to
choose renewable energy in meeting their energy requirements.
(v) "Grid" refers to the high voltage backbone system of interconnected
transmission lines, substations, and related facilities, located in each of
Luzon, Visayas, and Mindanao, or as may otherwise be determined by the
ERC in accordance with Republic Act No. 9136.
(w) "Hybrid Systems" refers to any power or energy generation facility which
makes use of two (2) or more types of technologies utilizing both
conventional and/or renewable fuel sources, such as, but not limited to,
integrated solar/wind systems, biomass/fossil fuel systems, hydro/fossil
fuel systems, integrated solar/biomass systems, integrated wind/fossil
fuel systems, with a minimum of ten (10) megawatts or ten percent (10%)
of the annual energy output provided by the Renewable Energy (RE)
component.
(x) "Hydroelectric Power Systems" or "Hydropower Systems" refers to water-
based energy systems which produce electricity by utilizing the kinetic
energy of falling or running water to turn a turbine generator.
(y) "Hydroelectric Power Development" or "Hydropower Development" refers to
the construction and installation of a hydroelectric power-generating plant
and its auxiliary facilities, such as diversion structure, headrace, penstock,
substation, transmission, and machine shop, among others.
(z) "Hydroelectric Power Resources" or "Hydropower Resources" refers to water
resources found technically feasible for development of hydropower
projects which include rivers, lakes, waterfalls, irrigation canals, springs,
ponds, and other water bodies.
(aa) "Local government share" refers to the amount due the local government
units from the exploitation, development and utilization of naturally-
occurring renewable energy resources.
(bb) "Micro-scale Project" refers to an RE project with capacity not exceeding
one hundred kilowatts (100 kW).
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 (cc) "Missionary Electri cation" refers to the provision of basic electricity service
in unviable areas with the aim of bringing the operations in these areas to
viability levels.
(dd) "National government share" refers to the amount due the national
government from the exploitation, development and utilization of naturally-
occurring renewable energy resources.
(ee) "National Power Corporation (NPC)" refers to the government corporation
created under Republic Act No. 6395, as amended by Republic Act No.
9136.
(ff) "National Transmission Corporation (TRANSCO)" refers to the corporation
created pursuant to Republic Act No. 9136 responsible for the planning,
construction, and centralized operation and maintenance of high voltage
transmission facilities, including grid interconnection and ancillary
services.
(gg) "Net-Metering" refers to a system, appropriate for distributed generation, in
which a distribution grid user has a two-way connection to the grid and is
only charged for his net electricity consumption and is credited for any
overall contribution to the electricity grid.
HSEIAT

(hh) "Non-power applications" refers to renewable energy systems or facilities

that produce mechanical energy, combustible products such as methane
gas, or forms of useful thermal energy such as heat or steam, that are not
used for electricity generation, but for applications such as, but not limited
to, industrial/commercial cooling, and fuel for cooking and transport.
(ii) "Ocean Energy Systems" refers to energy system which convert ocean or tidal
current, ocean thermal gradient or wave energy into electrical or
mechanical energy.
(jj) "Off Grid Systems" refers to electrical systems not connected to the wires
and related facilities of the On-Grid Systems of the Philippines.
(kk) "On-Grid System" refers to electrical system composed of interconnected
transmission lines, distribution lines, substations, and related facilities for
the purpose of conveyance of bulk power on the grid of the Philippines.
(ll) "Philippine Electricity Market Corporation (PEMC) refers to the Corporation
incorporated upon the initiative of the DOE composed of all Wholesale
Electricity Spot Market (WESM) Members and whose Board of Directors
will be the PEMC Board.
(mm) "Philippine National Oil Company (PNOC)" refers to the government agency
created pursuant to Presidential Decree No. 334, as amended.
(nn) "Power applications" refers to renewable energy systems or facilities that
produce electricity.
(oo) "Registered RE Developer" refers to a RE Developer duly registered with the
DOE.
(pp) "Renewable Energy (Systems) Developers" or "RE Developers" refers to
individual/s or a group of individual formed in accordance with existing
Philippine Laws engaged in the exploration, development and utilization of
RE resources and actual operation of RE systems/facilities.
(qq) "Renewable Energy Market (REM)" refers to the market where the trading of
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 the RE certi cates equivalent to an amount of power generated from RE
resources is made.
(rr) "Renewable Energy Policy Framework (REPF)" refers to the long-term policy
developed by the DOE which identi es among others, the goals and
targets for the development and utilization of renewable energy in the
country.
(ss) "Renewable Portfolio Standards (RPS)" refer to a market-based policy that
requires electricity suppliers to source an agreed portion of their energy
supply from eligible RE resources.
(tt) "Renewable Energy Service (Operating) Contract (RE Contract)" refers to the
service agreement between the Government, through the DOE, and RE
Developer over a period in which the RE Developer has the exclusive right
to a particular RE area for exploration and development. The RE Contract
shall be divided into two (2) stages: the pre-development stage and the
development/commercial stage. The preliminary assessment and
feasibility study up to nancial closing shall refer to the pre-development
stage. The construction and installation of facilities up to operation phase
shall refer to the development stage.
(uu) "Renewable Energy Resources (RE Resources)" refers to energy resources
that do not have an upper limit on the total quantity to be used. Such
resources are renewable on a regular basis, and whose renewal rate is
relatively rapid to consider availability over an inde nite period of time.
These include, among others, biomass, solar, wind, geothermal, ocean
energy, and hydropower conforming with internationally accepted norms
and standards on dams, and other emerging renewable energy
technologies.
(vv) "Renewable Energy Systems (RE Systems)" refers to energy systems which
convert RE resources into useful energy forms, like electrical, mechanical,
etc.
(ww) "Rural Electri cation" refers to the delivery of basic electricity services,
consisting of power generation, sub-transmission, and/or extension of
associated power delivery system that would bring about important social
and economic benefits to the countryside.
(xx) "Solar Energy" refers to the energy derived from solar radiation that can be
converted into useful thermal or electrical energy.
(yy) "Solar Energy Systems" refers to energy systems which convert solar energy
into thermal or electrical energy.
(zz) "Small Power Utilities Group (SPUG)" refers to the functional unit of the NPC
mandated under Republic Act No. 9136 to pursue missionary
electrification function.
(aaa) "Supplier'' refers to any person or entity authorized by the ERC to sell,
broker, market or aggregate electricity to the end-users.
(bbb) "Transmission of Electricity" refers to the conveyance of electric power
through transmission lines as de ned under Republic Act No. 9136 by
TRANSCO or its buyer/concessionaire in accordance with its franchise and
Republic Act No. 9136. TaDCEc

(ccc) "Wind Energy" refers to the energy that can be derived from wind that is
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 converted into useful electrical or mechanical energy.
(ddd) "Wind Energy Systems" refers to the machines or other related equipment
that convert wind energy into useful electrical or mechanical energy.
(eee) "Wholesale Electricity Spot Market (WESM)" refers to the wholesale
electricity spot market created pursuant to Republic Act No. 9136.
CHAPTER II
Organization
SECTION 5. Lead Agency. — The DOE shall be the lead agency mandated to
implement the provisions of this Act.
CHAPTER III
On-Grid Renewable Energy Development
SECTION 6. Renewable Portfolio Standard (RPS). — All stakeholders in the
electric power industry shall contribute to the growth of the renewable energy industry
of the country. Towards this end, the National Renewable Energy Board (NREB), created
under Section 27 of this Act, shall set the minimum percentage of generation from
eligible renewable energy resources and determine to which sector RPS shall be
imposed on a per grid basis within one (1) year from the effectivity of this Act.
SECTION 7. Feed-In Tariff System. — To accelerate the development of emerging
renewable energy resources, a feed-in tariff system for electricity produced from wind,
solar, ocean, run-of-river hydropower and biomass is hereby mandated. Towards this
end, the ERC in consultation with the National Renewable Energy Board (NREB) created
under Section 27 of this Act shall formulate and promulgate feed-in tariff system rules
within one (1) year upon the effectivity of this Act which shall include, but not limited to,
the following:
(a) Priority connections to the grid for electricity generated from emerging
renewable energy resources such as wind, solar, ocean, run-of-river
hydropower and biomass power plants within the territory of the
Philippines;
(b) The priority purchase and transmission of, and payment for, such electricity
by the grid system operators;
(c) Determine the xed tariff to be paid to electricity produced from each type of
emerging renewable energy and the mandated number of years for the
application of these rates, which shall not be less than twelve (12) years;
(d) The feed-in tariff to be set shall be applied to the emerging renewable energy
to be used in compliance with the renewable portfolio standard as
provided for in this Act and in accordance with the RPS rules that will be
established by the DOE.
SECTION 8. Renewable Energy Market (REM). — To facilitate compliance with
Section 6 of this Act, the DOE shall establish the REM and shall direct PEMC to
implement changes to the WESM Rules in order to incorporate the rules speci c to the
operation of the REM under the WESM.
The PEMC shall, under the supervision of the DOE, establish a Renewable Energy
Registrar within one (1) year from the effectivity of this Act and shall issue, keep and
verify RE Certi cates corresponding to energy generated from eligible RE facilities.
Such certi cates will be used for compliance with the RPS. For this purpose, a
transaction fee, equal to half of what PEMC currently charges regular WESM players,
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 may be imposed by PEMC. AIcECS

SECTION 9. Green Energy Option. — The DOE shall establish a Green Energy
Option program which provides end-users the option to choose RE resources as their
sources of energy. In consultation with the NREB, the DOE shall promulgate the
appropriate implementing rules and regulations which are necessary, incidental or
convenient to achieve the objectives set forth herein.
Upon the determination of the DOE of its technical viability and consistent with
the requirements of the green energy option program, end-users may directly contract
from RE facilities their energy requirements distributed through their respective
distribution utilities.
Consistent herewith, TRANSCO or its successors-in-interest, DUs, PEMC and all
relevant parties are hereby mandated to provide the mechanisms for the physical
connection and commercial arrangements necessary to ensure the success of the
Green Energy Option. The end-user who will enroll under the energy option program
should be informed by way of its monthly electric bill, how much of its monthly energy
consumption and generation charge is provided by RE facilities.
SECTION 10. Net-metering for Renewable Energy. — Subject to technical
considerations and without discrimination and upon request by distribution end-users,
the distribution utilities shall enter into net-metering agreements with quali ed end-
users who will be installing the RE system.
The ERC, in consultation with the NREB and the electric power industry
participants, shall establish net-metering interconnection standards and pricing
methodology and other commercial arrangements necessary to ensure success of the
net-metering for renewable energy program within one (1) year upon the effectivity of
this Act.
The distribution utility shall be entitled to any Renewable Energy Certi cate
resulting from net-metering arrangement with the quali ed end-user who is using an RE
resource to provide energy and the distribution utility shall be able to use this RE
certificate in compliance with its obligations under RPS.
The DOE, ERC, TRANSCO or its successors-in-interest, DUs, PEMC and all relevant
parties are hereby mandated to provide the mechanisms for the physical connection
and commercial arrangements necessary to ensure the success of the Net-metering
for Renewable Energy program, consistent with the Grid and Distribution Codes.
SECTION 11. Transmission and Distribution System Development. — TRANSCO
or its successors-in-interest or its buyer/concessionaire and all DUs, shall include the
required connection facilities for RE-based power facilities in the Transmission and
Distribution Development Plans: Provided, That such facilities are approved by the DOE.
The connection facilities of RE power plants, including the extension of transmission
and distribution lines, shall be subject only to ancilliary services covering such
connections.

CHAPTER IV
Off-Grid Renewable Energy Development
SECTION 12. Off-Grid Areas. — Within one (1) year from the effectivity of this Act,
NPC-SPUG or its successors-in-interest and/or quali ed third parties in off-grid areas
shall, in the performance of its mandate to provide missionary electri cation, source a
minimum percentage of its total annual generation upon recommendation of the NREB
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 from available RE resources in the area concerned, as may be determined by the DOE.
As used in this Act, successors-in-interest refer to entities deemed technically
and financially capable to serve/take over existing NPC-SPUG areas.
Eligible RE generation in off-grid and missionary areas shall be eligible for the
provision of RE Certi cates de ned in Section 8 of this Act. In the event there are no
viable RE resources in the off-grid and missionary areas, the relevant electricity supplier
in the off-grid and missionary areas shall still be obligated under Section 6 of this Act.
CHAPTER V
Government Share
SECTION 13. Government Share. — The government share on existing and new
RE development projects shall be equal to one percent (1%) of the gross income of RE
resource developers resulting from the sale of renewable energy produced and such
other income incidental to and arising from the renewable energy generation,
transmission, and sale of electric power except for indigenous geothermal energy,
which shall be at one and a half percent (1.5%) of gross income.
To further promote the development of RE projects, the government hereby
waives its share from the proceeds of micro-scale projects for communal purposes
and non-commercial operations, which are not greater than one hundred kilowatts (100
kW).
CHAPTER VI
Environmental Compliance
SECTION 14. Compliance with Environmental Regulations. — All RE explorations,
development, utilization, and RE systems operations shall be conducted in accordance
with existing environmental regulations as prescribed by the DENR and/or any other
concerned government agency. EDaHAT

CHAPTER VII
General Incentives
SECTION 15. Incentives for Renewable Energy Projects and Activities. — RE
Developers of renewable energy facilities, including hybrid systems, in proportion to
and to the extent of the RE component, for both power and non-power applications, as
duly certi ed by the DOE, in consultation with the BOI, shall be entitled to the following
incentives:
(a) Income Tax Holiday (ITH) — For the rst seven (7) years of its commercial
operations, the duly registered RE developer shall be exempt from income
taxes levied by the National Government.

Additional investments in the project shall be entitled to additional

income tax exemption on the income attributable to the investment:
Provided, That the discovery and development of new RE resource shall be
treated as a new investment and shall therefore be entitled to a fresh
package of incentives: Provided, further, That the entitlement period for
additional investments shall not be more than three (3) times the period of
the initial availment of the ITH.
(b) Duty-free Importation of RE Machinery, Equipment and Materials — Within the
rst ten (10) years upon the issuance of a certi cation of an RE developer,
the importation of machinery and equipment, and materials and parts
thereof, including control and communication equipment, shall not be
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 subject to tariff duties: Provided, however, That the said machinery,
equipment, materials and parts are directly and actually needed and used
exclusively in the RE facilities for transformation into energy and delivery of
energy to the point of use and covered by shipping documents in the name
of the duly registered operator to whom the shipment will be directly
delivered by customs authorities: Provided, further, That endorsement of
the DOE is obtained before the importation of such machinery, equipment,
materials and parts is made.
Endorsement of the DOE must be secured before any sale, transfer
or disposition of the imported capital equipment, machinery or spare parts
is made: Provided, That if such sale, transfer or disposition is made within
the ten (10)-year period from the date of importation, any of the following
conditions must be present:
(i) If made to another RE developer enjoying tax and duty exemption on
imported capital equipment;
(ii) If made to a non-RE developer, upon payment of any taxes and duties
due on the net book value of the capital equipment to be sold;
(iii) Exportation of the used capital equipment, machinery, spare parts or
source documents or those required for RE development; and
(iv) For reasons of proven technical obsolescence.
When the aforementioned sale, transfer or disposition is made
under any of the conditions provided for in the foregoing paragraphs after
ten (10) years from the date of importation, the sale, transfer or
disposition shall no longer be subject to the payment of taxes and duties.
(c) Special Realty Tax Rates on Equipment and Machinery — Any law to the
contrary notwithstanding, realty and other taxes on civil works, equipment,
machinery, and other improvements of a registered RE Developer actually
and exclusively used for RE facilities shall not exceed one and a half
percent (1.5%) of their original cost less accumulated normal depreciation
or net book value: Provided, That in case of an integrated resource
development and generation facility as provided under Republic Act No.
9136, the real property tax shall only be imposed on the power plant.
(d) Net Operating Loss Carry-Over (NOLCO) — The NOLCO of the RE Developer
during the rst three (3) years from the start of commercial operation
which had not been previously offset as deduction from gross income
shall be carried over as a deduction from gross income for the next seven
(7) consecutive taxable years immediately following the year of such loss:
Provided, however, That operating loss resulting from the availment of
incentives provided for in this Act shall not be entitled to NOLCO.
(e) Corporate Tax Rate — After seven (7) years of ITH, all RE Developers shall pay
a corporate tax of ten percent (10%) on its net taxable income as de ned
in the National Internal Revenue Code (NIRC) of 1997, as amended by
Republic Act No. 9337: Provided, That the RE Developer shall pass on the
savings to the end-users in the form of lower power rates.
(f) Accelerated Depreciation — If, and only if, an RE project fails to receive an ITH
before full operation, it may apply for Accelerated Depreciation in its tax
books and be taxed based on such: Provided, That if it applies for
Accelerated Depreciation, the project or its expansions shall no longer be
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 eligible for an ITH. Accelerated depreciation of plant, machinery, and
equipment that are reasonably needed and actually used for the
exploration, development and utilization of RE resources may be
depreciated using a rate not exceeding twice the rate which would have
been used had the annual allowance been computed in accordance with
the rules and regulations prescribed by the Secretary of the Department of
Finance and the provisions of the National Internal Revenue Code (NIRC) of
1997, as amended. Any of the following methods of accelerated
depreciation may be adopted: TIDaCE

(i) Declining balance method; and

(ii) Sum-of-the years digit method.
(g) Zero Percent Value-Added Tax Rate — The sale of fuel or power generated
from renewable sources of energy such as, but not limited to, biomass,
solar, wind, hydropower, geothermal, ocean energy and other emerging
energy sources using technologies such as fuel cells and hydrogen fuels,
shall be subject to zero percent (0%) value-added tax (VAT), pursuant to
the National Internal Revenue Code (NIRC) of 1997, as amended by
Republic Act No. 9337.
All RE Developers shall be entitled to zero-rated value added tax on
its purchases of local supply of goods, properties and services needed for
the development, construction and installation of its plant facilities.
This provision shall also apply to the whole process of exploring and
developing renewable energy sources up to its conversion into power,
including, but not limited to, the services performed by subcontractors
and/or contractors.
(h) Cash Incentive of Renewable Energy Developers for Missionary Electri cation
— A RE developer, established after the effectivity of this Act, shall be
entitled to a cash generation-based incentive per kilowatt-hour rate
generated, equivalent to fty percent (50%) of the universal charge for
power needed to service missionary areas where it operates the same, to
be chargeable against the universal charge for missionary electrification.
(i) Tax Exemption of Carbon Credits — All proceeds from the sale of carbon
emission credits shall be exempt from any and all taxes.
(j) Tax Credit on Domestic Capital Equipment and Services — A tax credit
equivalent to one hundred percent (100%) of the value of the value-added
tax and custom duties that would have been paid on the RE machinery,
equipment, materials and parts had these items been imported shall be
given to an RE operating contract holder who purchases machinery,
equipment, materials, and parts from a domestic manufacturer for
purposes set forth in this Act: Provided, That prior approval by the DOE
was obtained by the local manufacturer: Provided, further, That the
acquisition of such machinery, equipment, materials, and parts shall be
made within the validity of the RE operating contract.
SECTION 16. Environmental Compliance Certi cate (ECC). — Notwithstanding
Section 17 (b) (3) (iii) of Republic Act No. 7160, it would be su cient for the renewable
energy developer to secure the Environmental Compliance Certi cate (ECC) from the
corresponding regional office of the DENR.
SECTION 17. Exemption from the Universal Charge. — Power and electricity
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 generated through the RES for the generator's own consumption and/or for free
distribution in the off-grid areas shall be exempted from the payment of the universal
charge provided for under Section 34 of Republic Act No. 9136.
SECTION 18. Payment of Transmission Charges. — A registered renewable
energy developer producing power and electricity from an intermittent RE resource may
opt to pay the transmission and wheeling charges of TRANSCO or its successors-in-
interest on a per kilowatt-hour basis at a cost equivalent to the average per kilowatt-
hour rate of all other electricity transmitted through the grid.
IaHCAD

SECTION 19. Hybrid and Cogeneration Systems. — The tax exemptions and/or
incentives provided for in Section 15 of this Act shall be availed of by registered RE
Developer of hybrid and cogeneration systems utilizing both RE sources and
conventional energy: Provided, however, That the tax exemptions and incentives shall
apply only to the equipment, machinery and/or devices utilizing RE resources.
SECTION 20. Intermittent RE Resources. — TRANSCO or its successors-in-
interest, in consultation with stakeholders, shall determine the maximum penetration
limit of the Intermittent RE-based power plants to the Grid, through technical and
economic analysis. Quali ed and registered RE generating units with intermittent RE
resources shall be considered "must dispatch" based on available energy and shall
enjoy the bene t of priority dispatch. All provisions under the WESM Rules, Distribution
and Grid Codes which do not allow "must dispatch" status for intermittent RE resources
shall be deemed amended or modi ed. The PEMC and TRANSCO or its successors-in-
interest shall implement technical mitigation and improvements in the system in order
to ensure safety and reliability of electricity transmission.
As used in this Act, RE generating unit with intermittent RE resources refers to a
RE generating unit or group of units connected to a common connection point whose
RE resource is location-speci c, naturally di cult to precisely predict the availability of
RE resource thereby making the energy generated variable, unpredictable and irregular
and the availability of the resource inherently uncontrollable, which include plants
utilizing wind, solar, run-of-river hydro or ocean energy.
SECTION 21. Incentives for RE Commercialization. — All manufacturers,
fabricators and suppliers of locally-produced RE equipment and components duly
recognized and accredited by the DOE, in consultation with the DOST, the DOF and the
DTI, shall, upon registration with the BOI, be entitled to the privileges set forth under
this section.
Consistent with Article 7, item (20) of Executive Order No. 226, the registration
with the BOI, as provided for in Section 15 and Section 21 of this Act, shall be carried
out through an agreement and an administrative arrangement between the BOI and the
DOE, with the end-view of facilitating the registration of quali ed RE facilities based on
the implementing rules and regulations that will be developed by the DOE. It is further
mandated that the applications for registration will be positively acted upon by the BOI
on the basis of the accreditation issued by the DOE.
The Renewable Energy Sector is hereby declared a priority investment sector that
will regularly form part of the country's Investment Priority Plan, unless declared
otherwise by law. As such, all entities duly accredited by the DOE under this Act shall be
entitled to all the incentives provided herein.
(a) Tax and Duty-free Importation of Components, Parts and Materials — All
shipments necessary for the manufacture and/or fabrication of RE
equipment and components shall be exempted from importation tariff and
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 duties and value-added tax (VAT): Provided, however, That the said
components, parts and materials are: (i) not manufactured domestically in
reasonable quantity and quality at competitive prices; (ii) directly and
actually needed and shall be used exclusively in the
manufacture/fabrication of RE equipment; and (iii) covered by shipping
documents in the name of the duly registered manufacturer/fabricator to
whom the shipment will be directly delivered by customs authorities:
Provided, further, That prior approval of the DOE was obtained before the
importation of such components, parts and materials. TAHIED

(b) Tax Credit on Domestic Capital Components, Parts and Materials — A tax
credit equivalent to one hundred percent (100%) of the amount of the
value-added tax (VAT) and custom duties that would have been paid on the
components, parts and materials had these items been imported shall be
given to an RE equipment manufacturer, fabricator, and supplier duly
recognized and accredited by the DOE who purchases RE components,
parts and materials from a domestic manufacturer: Provided, That such
components, and parts are directly needed and shall be used exclusively
by the RE manufacturer, fabricator and supplier for the manufacture,
fabrication and sale of the RE equipment: Provided, further, That prior
approval by the DOE was obtained by the local manufacturer.
(c) Income Tax Holiday and Exemption — For seven (7) years starting from the
date of recognition/accreditation, an RE manufacturer, fabricator and
supplier of RE equipment shall be fully exempt from income taxes levied by
the National Government on net income derived only from the sale of RE
equipment, machinery, parts and services.
(d) Zero-rated Value-Added Tax Transactions — All manufacturers, fabricators
and suppliers of locally produced renewable energy equipment shall be
subject to zero-rated value-added tax on its transactions with local
suppliers of goods, properties and services.
SECTION 22. Incentives for Farmers Engaged in the Plantation of Biomass
Resources. — For a period of ten (10) years after the effectivity of this Act, all
individuals and entities engaged in the plantation of crops and trees used as biomass
resources such as, but not limited to, jatropha, coconut, and sugarcane, as certi ed by
the Department of Energy, shall be entitled to duty-free importation and be exempted
from value-added tax (VAT) on all types of agricultural inputs, equipment and machinery
such as, but not limited to, fertilizer, insecticide, pesticide, tractor, trailers, trucks, farm
implements and machinery, harvesters, threshers, hybrid seeds, genetic materials,
sprayers, packaging machinery and materials, bulkhandling facilities, such as conveyors
and mini-loaders, weighing scales, harvesting equipment, and spare parts of all
agricultural equipment.
SECTION 23. Tax Rebate for Purchase of RE Components. — To encourage the
adoption of RE technologies, the DOF, in consultation with the DOST, the DOE, and the
DTI, shall provide rebates for all or part of the tax paid for the purchase of RE
equipment for residential, industrial, or community use. The DOF shall also prescribe
the appropriate period for granting the tax rebates.
SECTION 24. Period of Grant of Fiscal Incentives. — The scal incentives granted
under Section 15 of this Act shall apply to all RE capacities upon the effectivity of this
Act. The NREB, in coordination with the DOE, shall submit a yearly report on the
implementation of this Act to the Philippine Congress, through the Joint Congressional
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 Power Commission, every January of each year following the period in review,
indicating among others, the progress of RE development in the country and the
bene ts and impact generated by the development and utilization of its renewable
energy resources in the context of its energy security and climate change imperatives.
This shall serve as basis for the Joint Congressional Power Commission's review of the
incentives as provided for in this Act towards ensuring the full development of the
country's RE capacities under a rationalized market and incentives scheme.
SECTION 25. Registration of RE Developers and Local Manufacturers,
Fabricators and Suppliers of Locally-Produced Renewable Energy Equipment. — RE
Developers and local manufacturers, fabricators and suppliers of locally-produced
renewable energy equipment shall register with the DOE, through the Renewable Energy
Management Bureau. Upon registration, a certi cation shall be issued to each RE
Developer and local manufacturer, fabricator and supplier of locally-produced
renewable energy equipment to serve as the basis of their entitlement to incentives
provided under Chapter VII of this Act. AcICHD

SECTION 26. Certi cation from the Department of Energy (DOE). — All
certi cations required to qualify RE developers to avail of the incentives provided for
under this Act shall be issued by the DOE through the Renewable Energy Management
Bureau.
The DOE, through the Renewable Energy Management Bureau shall issue said
certi cation fteen (15) days upon request of the renewable energy developer or
manufacturer, fabricator or supplier: Provided, That the certi cation issued by the DOE
shall be without prejudice to any further requirements that may be imposed by the
concerned agencies of the government charged with the administration of the scal
incentives abovementioned.
CHAPTER VIII
General Provisions
SECTION 27. Creation of the National Renewable Energy Board (NREB).— The
NREB is hereby created. It shall be composed of a Chairman and one (1) representative
each from the following agencies: DOE, DTI, DOF, DENR, NPC, TRANSCO or its
successors-in-interest, PNOC and PEMC who shall be designated by their respective
secretaries on a permanent basis; and one (1) representative each from the following
sectors: RE Developers, Government Financial Institutions (GFIs), private distribution
utilities, electric cooperatives, electricity suppliers and non-governmental organizations,
duly endorsed by their respective industry associations and all to be appointed by the
President of the Republic of the Philippines.
The Chairman shall, within one (1) month from the effectivity of this Act, convene
the NREB. TSDHCc

The NREB shall be assisted by a Technical Secretariat from the Renewable

Energy Management Bureau of the DOE, created under Section 32 hereof, and shall
directly report to the O ce of the Secretary or the Undersecretary of the Department,
as the case may be, on matters pertaining to the activities of the NREB. The number of
staff of the Technical Secretariat and the creation of corresponding positions
necessary to complement and/or augment the existing plantilla of the Renewable
Energy Management Bureau shall be determined by the Board, subject to approval by
the Department of Budget and Management (DBM) and to existing civil service rules
and regulations.
The NREB shall have the following powers and functions:
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 (a) Evaluate and recommend to the DOE the mandated RPS and minimum RE
generation capacities in off-grid areas, as it deems appropriate;
(b) Recommend speci c actions to facilitate the implementation of the National
Renewable Energy Program (NREP) to be executed by the DOE and other
appropriate agencies of government and to ensure that there shall be no
overlapping and redundant functions within the national government
departments and agencies concerned;
(c) Monitor and review the implementation of the NREP, including compliance
with the RPS and minimum RE generation capacities in off-grid areas;
(d) Oversee and monitor the utilization of the Renewable Energy Trust Fund
created pursuant to Section 28 of this Act and administered by the DOE;
and
(e) Perform such other functions, as may be necessary, to attain the objectives of
this Act.
SECTION 28. Renewable Energy Trust Fund (RETF). — A Renewable Energy Trust
Fund is hereby established to enhance the development and greater utilization of
renewable energy. It shall be administered by the DOE as a special account in any of the
GFIs. The RETF shall be exclusively used to:
(a) Finance the research, development, demonstration, and promotion of the
widespread and productive use of RE systems for power and non-power
applications, as well as to provide funding for research and development
institutions engaged in renewable energy studies undertaken jointly
through public-private sector partnership, including provision for
scholarship and fellowship for energy studies;

(b) Support the development and operation of new RE resources to improve their
competitiveness in the market: Provided, That the grant thereof shall be
done through a competitive and transparent manner;
(c) Conduct nationwide resource and market assessment studies for the power
and non-power applications of renewable energy systems;
(d) Propagate RE knowledge by accrediting, tapping, training, and providing
bene ts to institutions, entities and organizations which can extend the
promotion and dissemination of RE bene ts to the national and local
levels; and
(e) Fund such other activities necessary or incidental to the attainment of the
objectives of this Act.
Use of the fund may be through grants, loans, equity investments, loan
guarantees, insurance, counterpart fund or such other nancial arrangements
necessary for the attainment of the objectives of this Act: Provided, That the use or
allocation thereof shall, as far as practicable, be done through a competitive and
transparent manner.
The RETF shall be funded from:
(a) Proceeds from the emission fees collected from all generating facilities
consistent with Republic Act No. 8749 or the Philippine Clean Air Act;
(b) One and a half percent (1.5%) of the net annual income of the Philippine
Charity Sweepstakes Office;
(c) One and a half percent (1.5%) of the net annual income of the Philippine
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 Amusement and Gaming Corporation;
(d) One and a half percent (1.5%) of the net annual dividends remitted to the
National Treasury of the Philippine National Oil Company and its
subsidiaries;
(e) Contributions, grants and donations: Provided, That all contributions, grants
and donations made to the RETF shall be tax deductible subject to the
provisions of the National Internal Revenue Code. Towards this end, the
Bureau of Internal Revenue (BIR) shall assist the DOE in formulating the
rules and regulations to implement this provision;
(f) One and a half percent (1.5%) of the proceeds of the Government share
collected from the development and use of indigenous non-renewable
energy resources;
(g) Any revenue generated from the utilization of the RETF; and
(h) Proceeds from the fines and penalties imposed under this Act.
SECTION 29. Financial Assistance Program. — Government nancial institutions
such as the Development Bank of the Philippines (DBP), Land Bank of the Philippines
(LBP), Phil-Exim Bank and other government nancial institutions shall, in accordance
with and to the extent allowed by the enabling provisions of their respective charters or
applicable laws, provide preferential nancial packages for the development, utilization
and commercialization of RE projects as duly recommended and endorsed by the DOE.
SECTION 30. Adoption of Waste-To-Energy Technologies. — The DOE shall,
where practicable, encourage the adoption of waste-to-energy facilities such as, but not
limited to, biogas systems. The DOE shall, in coordination with the DENR, ensure
compliance with this provision.
As used in this Act, waste-to-energy technologies shall refer to systems which
convert biodegradable materials such as, but not limited to, animal manure or
agricultural waste, into useful energy through processes such as anaerobic digestion,
fermentation and gasi cation, among others, subject to the provisions and intent of
Republic Act No. 8749 (Clean Air Act of 1999) and Republic Act No. 9003 (Ecological
Solid Waste Management Act of 2000).
SECTION 31. Incentives for RE Host Communities/LGUs. — Eighty percent (80%)
of the share from royalty and/or government share of RE host communities/LGUs from
RE projects and activities shall be used directly to subsidize the electricity consumption
of end-users in the RE host communities/LGUs whose monthly consumption do not
exceed one hundred kilowatt hours (100 kWh). The subsidy may be in the form of
rebates, refunds and/or any other form as may be determined by the DOE, the DOF and
the ERC, in coordination with the NREB. AIcECS

The DOE, the DOF and the ERC, in coordination with the NREB and in consultation
with the distribution utilities, shall promulgate the mechanisms to implement this
provision within six (6) months from the effectivity of this Act.
SECTION 32. Creation of the Renewable Energy Management Bureau. — For the
purpose of implementing the provisions of this Act, a Renewable Energy Management
Bureau (REMB) under the DOE is hereby established, and the existing Renewable Energy
Management Division of the Energy Utilization Management Bureau of the DOE, whose
plantilla shall form the nucleus of REMB, is hereby dissolved. The organizational
structure and sta ng complement of the REMB shall be determined by the Secretary
of the DOE, in consultation with the DBM, in accordance with existing civil service rules
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 and regulations. The budgetary requirements necessary for the creation of the REMB
shall be taken from the current appropriations of the DOE. Thereafter, the funding for
the REMB shall be included in the annual General Appropriations Act.
The REMB shall have the following powers and functions:
(a) Implement policies, plans and programs related to the accelerated
development, transformation, utilization and commercialization of
renewable energy resources and technologies;
(b) Develop and maintain a centralized, comprehensive and uni ed data and
information base on renewable energy resources to ensure the e cient
evaluation, analysis, and dissemination of data and information on
renewable energy resources, development, utilization, demand and
technology application;
(c) Promote the commercialization/application of renewable energy resources
including new and emerging technologies for e cient and economical
transformation, conversion, processing, marketing and distribution to end
users;
(d) Conduct technical research, socio-economic and environmental impact
studies of renewable energy projects for the development of sustainable
renewable energy systems;
(e) Supervise and monitor activities of government and private companies and
entities on renewable energy resources development and utilization to
ensure compliance with existing rules, regulations, guidelines and
standards;
(f) Provide information, consultation and technical training and advisory services
to developers, practitioners and entities involved in renewable energy
technology and develop renewable energy technology development
strategies; and
(g) Perform other functions that may be necessary for the effective
implementation of this Act and the accelerated development and
utilization of the renewable energy resources in the country.
CHAPTER IX
Final Provisions
SECTION 33. Implementing Rules and Regulations (IRR). — Within six (6) months
from the effectivity of this Act, the DOE shall, in consultation with the Senate and House
of Representatives Committees on Energy, relevant government agencies and RE
stakeholders, promulgate the IRR of this Act.
SECTION 34. Congressional Oversight. — Upon the effectivity of this Act, the
Joint Congressional Power Commission created under Section 62 of Republic Act No.
9136, otherwise known as the "Electric Power Industry Reform Act of 2001" shall
exercise oversight powers over the implementation of this Act.
SECTION 35. Prohibited Acts. — The following acts shall be prohibited:
(a) Noncompliance or violation of the RPS rules;
(b) Willful refusal to undertake net metering arrangements with quali ed
distribution grid users;
(c) Falsi cation or tampering of public documents or o cial records to avail of
the fiscal and non-fiscal incentives provided under this Act;
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 (d) Failure and willful refusal to issue the single certi cate referred to in Section
26 of this Act; and
(e) Noncompliance with the established guidelines that the DOE will adopt for the
implementation of this Act.
SECTION 36. Penalty Clause. — Any person who willfully commits any of the
prohibited acts enumerated under this Act, shall be imposed with the penalties
provided herein. Any person, who willfully aids or abets the commission of a crime
prohibited herein or who causes the commission of any such act by another, shall be
liable in the same manner as the principal.
In the case of associations, partnerships or corporations, the penalty shall be
imposed on the partner, president, chief operating o cer, chief executive o cer,
directors or officers responsible for the violation.
The commission of any prohibited acts provided for under Section 35, upon
conviction thereof, shall suffer the penalty of imprisonment of one (1) year to ve (5)
years, or a ne ranging from a minimum of One hundred thousand pesos (P100,000.00)
to One hundred million pesos (P100,000,000.00), or twice the amount of damages
caused or costs avoided for non-compliance, whichever is higher, or both, upon the
discretion of the court.

The DOE is further empowered to impose administrative nes and penalties for
any violation of the provisions of this Act, its IRR and other issuances relative to this
Act.
This is without prejudice to the penalties provided for under existing
environmental regulations prescribed by the DENR and/or any other concerned
government agency.
SECTION 37. Appropriations. — Such sums as may be necessary for the initial
implementation of this Act shall be taken from the current appropriations of the DOE.
Thereafter, the fund necessary to carry out the provisions of this Act shall be included in
the annual General Appropriations Act.
SECTION 38. Separability Clause. — If any provision of this Act is held invalid or
unconstitutional, the remainder of the Act or the provision not otherwise affected shall
remain valid and subsisting.
SECTION 39. Repealing Clause. — Any law, presidential decree or issuance,
executive order, letter of instruction, administrative rule or regulation contrary to or
inconsistent with the provisions of this Act is hereby repealed, modi ed or amended
accordingly.
Consistent with the foregoing paragraph and Section 13 of this Act, Section 1 of
Presidential Decree No. 1442 or the Geothermal Resources Exploration and
Development Act, insofar as the exploration of geothermal resources by the
government, and Section 10 (1) of Republic Act No. 7156, otherwise known as the
"Mini-Hydro Electric Power Incentive Act", insofar as the special privilege tax rate of two
percent (2%) are hereby repealed, modified or amended accordingly. IaAHCE

SECTION 40. Effectivity Clause. — This Act shall take effect fteen (15) days
after its publication in at least two (2) newspapers of general circulation.
Approved: December 16, 2008

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