Examples of Legal Texts and Regulations to Lift Import Duties for PV Products

Introduction

Many countries across the world have built up a policy framework which is aimed at supporting the development of renewable energy technologies, including PV and picoPV products. Fiscal incentives, such as tax exemptions, are an effective way of supporting these technologies. This article summarises the legal texts and regulations in some of these countries as well as links to the original government legislation documents, whenever possible. Countries are sorted alphabetically within each continent section. Currently, most of the information gathered in this document is on policies within Latin American countries, with only a small section on policies in few African countries.

The information found in this article might be useful for countries who are thinking about implementing similar policies and are interested in learning how other countries have formulated their legal texts aimed at fostering PV products. This might make it easier for who currently have no such legislation in place countries to adapt new policies and thereby have a positive effect on the distribution of PV production world-wide. 

The IEA/IRENA Joint Policies and Measures Database

In the database you find an overview of 136 countries and the policies they have implemented. It is a very useful database since, as well as giving a short description of each policy, it shows when the policy was enacted, whether or not it is still in force and whether it was superseded by a new law. The original wordings of the legal texts are not shown, however, in most cases, a link to the government legislation is provided.

Furthermore, IRENA published a report in 2015: “Renewable Energy in Latin America 2015: An Overview of Policies” . This article outlines the different types of policies that exist to promote renewable energies and then briefly states, for each which Latin American countries have put these policies in place as well as sometimes going in to a bit more detail as to how effective the policy was. However, this report does not include any quotations of actual policies and legislation and therefore does not show the wordings used by different countries. But you can find an overview organized by policy type rather than by country.

Climate Scope Database

The climate scope policies database list renewable energy policies put in place by 54 different countries. The data can be filtered by country, state/province and by the policy status (Ongoing, Abandoned, Proposed etc.). As such the database provides a great overview of policies and the tax exemption policies can easily be found for each county. For each policy there is a short description, including information about when the policy was put in place, what it is about, which law or decree it is written in as well as listing the renewable energy sectors which are affected by it. In most cases a link to the original government legislation document is provided.

Africa

East African Community Customs Management Act, 2004

The East African Community Customs Management Act, 2004 FIFTH SCHEDULE (s 114) EXEMPTIONS REGIME

Link to Legislation:

• http://www.revenue.go.ke/customs/pdf/Fifth_Schedule_Exemptions.pdf

Inserted by Legal Notice No. EAC/12/2006 of 30th June 2006

“26. Specialised solar equipment and accessories

Specialised Solar powered equipment and accessories including deep cycle sealed batteries which exclusively use and/or store solar power.”

Inserted by: Legal Notice No. EAC/23/2014. Of 20th June, 2014

Paragraph 26 of Part B is amended by deleting the paragraph under that item and replacing it with the following paragraph;

“26 Specialised Solar and Wind Energy Equipment

Specialised equipment for development and generation of Solar and Wind Energy, including accessories, spare parts and deep cycle batteries which use and/or store solar power.”

Rwanda

Specifically exempt is energy supply equipment appearing on the list made by the Minister in charge of energy and approved by the Minister in charge of taxes. Find the list below:

 

List of energy supply equipment exempted from Value Added Tax

"Pursuant to the law n° 37/2012 of 09/11/2012 establishing the Value Added Tax, as modified and complemented to date, especially in its article 6, 10°,

The Minister of Finance and Economic Planning approves the following list of energy supply equipment exempted from Value Added Tax.

Energy Efficiency equipment:

1. Energy saving lamps
   
2. Solar water-heating systems and accessories only related to solar water-heating:
   
3. Improved cookstoves and related equipment and efficient fuels listed below:
   
   1. Solid biomass fuels produced in Rwanda in the form of densified pellets (or similar densified forms);
      
   2. Cookstoves that meet ISO/IWA 11:2012 Tier 2-3 emission on standards and fuel efficiency;
      
   3. Vermiculite (used as filler material for maximum insulation in installation of Institutional stoves and assembling household stoves);
      
   4. Equipment, tools, machinery, and replacement parts specifically designed for biomass densification pellet production.
      

1. Laboratory equipment listed below for energy efficiency and supplies for testing cook stove emissions and efficiencies:
   
   1. Laboratory electronic weighing balances (for taking measurements);
      
   2. Thermocouples (for measuring moisture contents n in the laboratory)
      
   3. Desiccators (for measuring micro moisture contents;
      
   4. Laboratory ovens;
      
   5. Equipment for measuring indoor air pollution from ICS (suitable co and respiratory particulate matter (soot) measuring equipment
      

1. Light control equipment listed below:
   
   1. Timer switches
      
   2. Motion sensors
      

1. Solar appliance products listed below:
   
   1. Solar phone chargers
      
   2. Solar pest control devices
      
   3. Solar irons
      
   4. Solar powered refrigerators
      
   5. Solar fans
      
   6. Solar powered water pumps
      
   7. Solar powered TVs and radios

Clean Energy

1. Renewable power generation equipment listed below:
   
   1. PV modules
      
   2. Charge regulators for use with PV
      
   3. Batteries (deep cycle tubular or modulate cycle, maintenance free sealed or vented)
      
   4. Inverters (pure and modified sine wave and AC coupled)
      
   5. PV monitoring equipment
      
   6. DC combiner boxes
      
   7. PV trackers
      
   8. PV protection equipment and switching devices listed below:
      1. DC fusing and DC breakers
         
      2. Dump load controllers
         
      3. Heat sinks and shunts for use with PV
         

1. 1. Wind power generation equipment and accessories
   2. Equipment, tools, machinery, replacement parts, and appliances specifically designed for use in the supply of bio-gasification energy (SI)
      
   3. Equipment, tools, machinery, replacement parts, and appliances specifically designed to be powered by solid densified biomass fuels sustainably produced in Rwanda in the form of densified pellets (or similar densified forms) (SI)
      

1. LPG, gas cylinders and accessories;
   
2. Kerosene intended for domestic use, premium and gasoil.”

Sierra Leone

The Finance Act, paragraph 26, 2011

1. The importation of photovoltaic system equipment and low energy or energy efficient appliances for resale or use by third parties shall be duty-free for a period of three years.
   
2. For purposes of subsection (1), "photovoltaic" refers to the method of generating electrical power by converting solar radiation into direct current electricity, using semi-conductors that exhibit the photovoltaic effect”

Link to Legislation:

• http://www.sierra-leone.org/Laws/2011-12.pdf

The three-year period was lifted in 2016.

The Finance Act, Changes to Paragraph 26 in 2016

“The Finance Act, 2011 is amended by the repeal and replacement of section 26 with the following new section –

1. The importation of photovoltaic System Equipment and low energy or energy efficient appliances for resale or use by third parties shall be duty-free.
   
2. For the purposes of subsection (1), “photovoltaic” refers to the method of generating electrical power by converting solar radiation into direct current electricity, using semi-conductors that exhibit the photovoltaic effect.”

Link to Legislation:

• nra.gov.sl/sites/default/files/Finance Act 2016.pdf

Latin America

Argentina

 

Law No. 26.190: Renewable Energy Incentives Law (6th December 2006)

“Fiscal incentives were included in both Law 26.190 and its predecessor Law 25.019, which allowed for deferred tax payments and provided 15 years of “fiscal stability” to existing projects whereby, during that period, the overall fiscal burden of renewable energy projects cannot be increased by means of augmented, modified, new or additional taxes and fees. Decree 562/2009, which regulates Law 26.190, provided for accelerated depreciation and for VAT refunds after 3 years. Federal laws on renewable energy invites provinces to adhere to the legislation and develop their own province-level incentives. For instance, Decree 562/2009 developing Law 26.190 of 2006 invited provinces to adhere to Law 25.019 and to establish provincial fiscal incentives such as exemptions from revenue tax, local and administrative fees and property taxes.” 

Link to Legislation:

• Argentina Law No. 26.190 - Renewable Energy Incentives Law
  
• Argentina Decree No. 562 - Regulating Renewable Energy Incentives Law

 

 Some Province-level Policies Include:

• "Province of Chubut – Law 4389 of 1998 exempts renewable energy projects from province taxes for 10 years and provides USD 5/MWh for wind power complying with a set of local content requirements
  
• Province of Mendoza – Law 7822 of 2008 sets a target of 15% renewable electricity consumption by 2023 and provides exemption from provincial taxes to renewable energy projects.
  
• Province of Santa Cruz – Law 2796 of 2005 provides exemption from property tax and all province taxes.”

Law No. 27.191: Renewable Energy Target (23rd September 2015)

“On 15 October 2015, the Law No. 26.190 was revised and updated in the approved Law No. 27.191, which complemented and updated incentives regime for the development of renewable energy project in Argentina based on tax-incentive schemes, established in the past law. The Law No. 27.191 was regulated on 31 March 2016.

Article 4 of Law No. 27.191 grants renewable energy projects in Argentina the following tax-based incentives, valid for projects with effective execution up to 31 December 2017: 

1. Value-Added Tax (Impuesto al Valor Agregado - IVA) rebate on new goods, except vehicles, included in the project, and infrastructure works.
   
2. Accelerated depreciation incurred on Income Tax (Impuesto a las Ganancias). The investors have two options to apply this incentive:
   
   1. Starting from the new goods fiscal license period, according to the articles 83 and 84 of Law Impuestos a las Ganancias and its modifications.
      
   2. In acquired depreciable movables, processed, manufactured or imported in that period, with at least two (for investments before 31 December 2016) or three (for investments before 31 December 2017) equal and consecutive installments, and in infrastructure works started in that period, with at least, in the annual amount, equal and consecutive installments arising from considering life reduced to fifty percent (investments before 31 December 2016) or sixty percent (investments before 31 December 2017) of the estimated. 
      

1. Exempt companies tax on the distribution of dividends or income to the extent they are reinvested in a new infrastructure project in the country.
   
2. The goods affected by the activities promoted by this law will not integrate the tax base of the tax on minimum presumed income established by law 25.063.

It is allowed to apply for VAT and accelerated depreciation incentives, simultaneously.”

Link to Legislation:

• http://www.infoleg.gob.ar/infolegInternet/anexos/250000-254999/253626/norma.htm
• Argentina Law No. 27.191 - Renewable Energy Target
• Argentina Decree No. 531 - Regulating Law 27.191

English:

• http://www.trsym.com/en/renewable-energy-regulation-of-laws-no-26-190-and-no-27-191/