The House Committee on Ways and Means chaired by Tarlac Rep. Jesli Lapus endorsed on second reading the approval of a bill that would grant tax incentives to developers, manufacturers, fabricators, and suppliers of locally produced renewable energy equipment, components, and materials.

The proposed measure also grants duty free importation of components, parts, and materials for them. Tax credit on domestic capital components, parts, materials, and income tax holidays and exemptions are also being offered under the proposal.

Lapus said additional incentives for developers include special tax rates on equipment and machinery, accelerated depreciation exemption from the universal charge, and Value-Added Tax exemption.

Earlier, the House Committee on Energy chaired by Rep. Alipio Badelles (NPC, Lanao del Norte) approved the bill authored by Rep. Rafael Nantes (LP, Quezon).

Nantes said the bill aims to accelerate the development of renewable energy resources such as biomass, solar, wind, hydro, geothermal, and ocean energy or hybrid system to allow the country to attain self-reliance.

He added that in order that these objectives can be achieved, fiscal and non-fiscal incentives should be granted to all renewable energy activities.

Lapus explained that as far as producers and developers of alternative energy are concerned, "this is a needed shot in the arm."

During a recent hearing on the bill, Badelles said shifting to renewable energy sources would lessen the high cost of electricity in the country. He said that compared to other countries in Asia, the Philippines has the third largest cost of electricity because of its dependence on imported oil.

Badelles stressed that the country has enough potential to be self-reliant on its power needs through renewable energy resources.

"If we can develop the equipvalent of 2,500 megawatts, our renewable energy resources in the country from 2006 to 2014, the country stands to gain as much as .2 billion. This would come from savings on imported fuel, carbon trading credits, and cost reduction on greenhouse gas emissions," he said.

He also dispelled fears that the grant of incentives to investors would result in reduced government revenues in the renewable energy sector since the bill is rather intended to entice investment in developing idle renewable resources.

Badelles said the set of incentives proposed under the bill is attuned to the provisions of Republic Act 9337 or the Expanded Value-Added Tax Reform Law of 2005.