Republic Act No. 9513

Republic of the Philippines
Congress of the Philippines

Metro Manila
Fourteenth Congress
Second Regular Session
Begun and held in Metro Manila, on Monday, the twenty-eight day of July, two thousand eight.
REPUBLIC ACT NO. 9513
AN ACT PROMOTING THE DEVELOPMENT, UTILIZATION AND
COMMERCIALIZATION OF RENEWABLE ENERGY RESOURCES AND FOR
OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled::
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".
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 fluctuations 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 efficient 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. Definition of Terms. - As used in this Act, the following terms are herein defined:
(a) "Biomass energy systems" refer 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" refer 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 including sugarcane and
coconut, rice hulls, 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" refer 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;
(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;
(n) "Energy Regulatory Commission" (ERC) refers to the independent quasi-judicial regulatory agency created
pursuant to Republic Act No. 9136;
(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 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" refer to machines or other equipment that converts geothermal energy into
useful power;
(s) "Geothermal Resources" refer to mineral resources, classified 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 fluids artificially 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" refer to any power or energy generation facility which makes use of two 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 RE component;
(x) "Hydroelectric Power Systems" or "Hydropower Systems" refer 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" refer 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 LGUs 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 (100) kilowatts;
(cc) "Missionary Electrification" 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;
(hh) "Non-power applications" refer 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" refer to energy systems which convert ocean or tidal current, ocean thermal
gradient or wave energy into electrical or mechanical energy;
(jj) "Off-Grid Systems" refer 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 systems 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 PEM Board;
(mm) "Philippine National Oil Company" (PNOC) refers to the government agency created pursuant to
Presidential Decree No. 334, as amended;
(nn) "Power applications" refer 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" refer to individual/s or a group of
individuals 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 the RE certificates 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
identifies among others, the goals and targets for the development and utilization of renewable energy in the
country;
(ss) "Renewable Portfolio Standards" 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 financial 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) refer 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 indefinite 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) refer to energy systems which convert RE resources into
useful energy forms, like electrical, mechanical, etc.;
(ww) "Rural Electrification" 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" refer 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
defined under Republic Act No. 9136 by TRANSCO or its buyer/concessionaire in accordance with its franchise
and Republic Act No. 9136;
(ccc) "Wind Energy" refers to the energy that can be derived from wind that is converted into useful electrical or
mechanical energy;
(ddd) "Wind Energy Systems" refer 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 fixed 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 specific 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 Certificates corresponding to energy
generated from eligible RE facilities. Such certificates 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, may be
imposed by PEMC.
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 qualified end-users who will be installing 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 Certificate resulting from net-metering
arrangement with the qualified 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 ancillary 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 qualified third parties in off-grid areas shall, in the performance of its mandate to provide
missionary electrification, source a minimum percentage of its total annual generation upon recommendation of
the NREB 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 Certificates
defined 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 (100) kilowatts.
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.
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 certified by the DOE, in consultation with the BOI, shall be entitled
to the following incentives:
(a) Income Tax Holiday (ITH) - For the first 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 first ten (10) years upon the
issuance of a certification of an RE developer, the importation of machinery and equipment, and materials and
parts thereof, including control and communication equipment, shall not be 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 are 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 first 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 income tax holiday, all RE Developers shall pay a corporate
tax of ten percent (10%) on its net taxable income as defined in the National Internal Revenue Act 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 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:
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 Electrification. - A renewable energy
developer, established after the effectivity of this Act, shall be entitled to a cash generation-based incentive per
kilowatt hour rate generated, equivalent to fifty 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 Certificate (ECC). - Notwithstanding Section 17 (b) (3) (iii) of
Republic Act No. 7160, it would be sufficient for the renewable energy developer to secure the Environmental
Compliance Certificate (ECC) from the corresponding regional office of the DENR.
Section 17. Exemption from the Universal Charge. - Power and electricity 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.
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. Qualified and registered RE generating units with intermittent
RE resources shall be considered "must dispatch" based on available energy and shall enjoy the benefit 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 modified. 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 energy resource is location-specific naturally difficult
to precisely predict the availability of RE energy 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
DOST, DOF and DTI, shall, upon registration with the BOI, be entitled to the privileges set forth under this
section.
Consistent with Article 7, Item (20) of EO 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 qualified RE facilities based
on the implementing rules and regulations that will be developed by DOE. It is further mandated that the
applications for registration will be positively acted upon by BOI on the basis of the accreditation issued by
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
duties and value added tax: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;
(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 and customs 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; and
(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 certified 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, bulk handling 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 DOST, DOE, and 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 fiscal incentives granted under Section 15 of this Act
shall apply to all RE capacities upon the effectivity of this Act. The National Renewable Energy Board, in
coordination with the Department of Energy, shall submit a yearly report on the implementation of this Act to
the Philippine Congress, through the Joint Congressional 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
benefits 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 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 Department of Energy, through the
Renewable Energy Management Bureau. Upon registration, a certification 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.
Section 26. Certification from the Department of Energy. - All certifications 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 Department of Energy, through the Renewable Energy Management Bureau shall issue said certification
fifteen (15) days upon request of the renewable energy developer or manufacturer, fabricator or supplier.
Provided, That the certification issued by the Department of Energy 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 fiscal 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.
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 Office of the Secretary or the
Undersecretary of the Department, as the case maybe, 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 REMB 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:
(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 specific 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 R & D 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 benefits to institutions, entities and
organizations which can extend the promotion and dissemination of RE benefits 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 financial 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 1/2 percent (1.5%) of the net annual income of the Philippine Charity Sweepstakes Office;
(c) One and 1/2 percent (1.5%) of the net annual income of the Philippine Amusement and Gaming
Corporation;
(d) One and 1/2 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 BIR shall assist the DOE in formulating the Rules and Regulations to implement this provision;
(f) One and 1/2 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 financial institutions such as the Development
Bank of the Philippines (DBP), Land Bank of the Philippines (LBP), Phil-Exim Bank and other government
financial institutions shall, in accordance with and to the extent allowed by the enabling provisions of their
respective charters or applicable laws, provide preferential financial 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 to biodegradable
materials such as, but not limited to, animal manure or agricultural waste, into useful energy through processes
such as anaerobic digestion, fermentation and gasification, 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 (100) kwh. The subsidy may be in the form of rebates, refunds and/or
any other forms as may be determined by DOE, DOF and ERC, in coordination with NREB.
The DOE, DOF and ERC, in coordination with the NREB and in consultation with the distribution utilities shall
promulgate the mechanisms to implement this provision within six 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 staffing complement of the REMB shall be determined by the Secretary of the DOE, in
consultation with the Department of Budget and Management, in accordance with existing civil service rules
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 unified data and information base on renewable
energy resources to ensure the efficient 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 efficient 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 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) Non-compliance or violation of the RPS rules;
(b) Willful refusal to undertake net metering arrangements with qualified distribution grid users;
(c) Falsification or tampering of public documents or official records to avail of the fiscal and non-fiscal
incentives provided under this Act;
(d) Failure and willful refusal to issue the single certificate referred to in Section 26 of this Act; and
(e) Non-compliance with the established guidelines that 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 association, partnership or corporations, the penalty shall be imposed on the partner, president,
chief operating officer, chief executive officer, 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 from one (1) year to five (5) years, or a fine 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 fines 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 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, modified 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.
Section 40. Effectivity Clause. - This Act shall take effect fifteen (15) days after its publication in at least two
(2) newspapers of general circulation.
Approved
(Sgd.) PROSPERO C. NOGRALES
Speaker of the House of Representative
(Sgd.) MANNY VILLAR
President of the Senate
This Act which is a consolidation of Senate Bill No. 2046 and House Bill No. 41935 was finally passed by the
Senate and the House of Representative on October 8, 2008.
(Sgd.) MARILYN B. BARUA-YAP
Secretary General
House of Representative
(Sgd.) EMMA LIRIO-REYES
Secretary of the Senate
Approved: December 16, 2008
(Sgd.) GLORIA MACAPAGAL-ARROYO
President of the Philippine
Republic of the Philippines
Department of Energy
DEPARTMENT CIRCULAR No. ______
RULES AND REGULATIONS IMPLEMENTING THE
REPUBLIC ACT No. 9513
Pursuant to Section 33 of Republic Act No. 9513, otherwise known as The

Renewable Energy Act of 2008, the Department of Energy, in consultation
with the Senate and House of Representatives Committees on Energy, the
National Renewable Energy Board, relevant government agencies and all RE
stakeholders, hereby issues, adopts and promulgates the following
implementing rules and regulations.
PART I.
GENERAL PROVISIONS
Rules and Regulations (IRR) of Republic Act No. 9513, otherwise known as
The Renewable Energy Act of 2008 and referred to as the “Act” in this IRR.
The scope of this IRR shall be as follows:

a. It shall cover the exploration, and development of renewable energy
resources such as biomass, solar, wind, hydropower, geothermal and ocean
energy sources, including hybrid systems in the Philippines for the
generation, transmission, distribution, sale and use of fuel and electricity
generated from renewable energy resources and for other purposes;
b. It shall cover renewable energy developers which may be individual or

entities including partnership and corporations registered and/or authorized
to operate in the Philippines;
c. It shall establish the framework for the accelerated sustainable

development and advancement of renewable energy resources, and the
development of a strategic program to increase its utilization; and
d. Further, it shall clarify specific provisions of the Act and the

responsibilities and functions of various government agencies, institutions,
government-owned and -controlled corporations, private sectors, other
stakeholders and their relationship with the National Renewable Energy
Board.
Rule 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 fluctuations 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 efficient and cost effective commercial
application by providing fiscal and non fiscal incentives;
c. Encourage the sustainable 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, safety and the environment; and
d. Establish the necessary infrastructure and mechanism to carry out the

mandates specified in the
Act and other existing relevant and related laws.
Rule 3. Definition of Terms - As used in these rules, the following terms

shall be defined as follows:
a. “Biomass energy systems” refer to energy systems which use biomass

resources to produce heat, steam, mechanical power or electricity through
either thermochemical, biochemical or physicochemical processes, or
through such other technologies which shall comply with prescribed
environmental standards pursuant to this Act;
b. “Biomass resources” refer to non-fossilized, biodegradable organic

material originating from naturally occurring or cultured plants, animals and
micro-organisms, including agricultural products, byproducts and residues
such as, but not limited to, biofuels except corn, soya beans and rice but
including sugarcane and coconut, rice hulls, 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” refer 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. “Cost of goods sold” refers to all include all business expenses directly
incurred to produce the merchandise to bring them to their present location
and use consistent with Section 27. paragraph A7of the National Internal
Revenue Code (IRC) of 1997 as amended by RA 9337;
f. “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 the Act;
g. “Department of Environment and Natural Resources” (DENR) refers to the

government agency created pursuant to Executive Order No. 192;
h. “Department of Finance” (DOF) refers to the government agency created
pursuant to Executive Order No. 127, as amended;
i. “Department of Science and Technology” (DOST) refers to the government

agency created pursuant to Executive Order No. 128;
j. “Department of Trade and Industry” (DTI) refers to the government

agency created pursuant to Executive Order No. 133;
k. “Distributed generation” refers to a system of small generation entities

supplying directly to the distribution grid, any one of which shall not exceed
100 kw in capacity;
l. “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;
m. “Distribution Utility” 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 otherwise referred
to as (DU);
n. “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 NPC otherwise known as “EPIRA”;
o. “Energy Regulatory Commission” (ERC) refers to the independent quasi-

judicial regulatory agency created pursuant to Republic Act No. 9136;
Output of the Pubcon for Government Agencies &
The Private Sector, Miramar Hotel in Manila, Feb. 25 to 26, 2009
p. “Generation Company” refers to any person or entity authorized by the

ERC to operate facilities used in the generation of electricity;
q. “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;
r. “Geothermal energy” as used herein and in the context of the Act, shall be
considered renewable and the provisions of the 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 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;
s. “Geothermal Energy Systems” refer to machines or other equipment that

converts geothermal energy into useful power;
t. “Geothermal Resources” refers to mineral resources, classified 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 fluids
artificially introduced into geothermal formations; (iii) heat or associated

energy found in geothermal formations; and (iv) any by-product derived
from them;
u. “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;
v. “Green Energy Option” refers to the mechanism to empower end-users to

choose renewable energy in meeting their energy requirements;
w. “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;
x. “Gross Income” derived from business shall be equivalent to gross sales

less sales returns, discounts and allowances and cost of goods sold
consistent with Section 27. paragraph A7of the National Internal Revenue
Code (IRC) of 1997 as amended by RA 9337;
y. “Hybrid Systems” refer to any power or energy generation facility which

makes use of two 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 RE component;
z. “Hydroelectric Power Systems or Hydropower Systems” refer to water-

based energy systems which produce electricity by utilizing the kinetic
energy of falling or running water to turn a turbine generator;
aa. “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;
bb. “Hydroelectric Power Resources or Hydropower Resources” refer to water

resources found technically feasible for development of hydropower projects
which include rivers, lakes, waterfalls, irrigation canals, springs, ponds, and
other water bodies;
cc. “Local government share” refers to the amount due the local government
units (LGUs) from the exploitation, development and utilization of naturally
occurring renewable energy resources; Output of the Pubcon for
Government Agencies &
dd. “Micro-scale Project” refers to an RE project with capacity not exceeding

one hundred (100) kilowatts;
ee. “Missionary Electrification” refers to the provision of basic electricity

service in unviable areas with the aim of bringing the operations in these
areas to viability levels;
ff. “National government share” refers to the amount due the national
government from the exploitation, development and utilization of naturally-
occurring renewable energy resources;
gg. “National Power Corporation” (NPC) refers to the government

corporation created under Republic Act No. 6395, as amended by Republic
Act No. 9136;
hh. “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;
ii. “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;
jj. “Non-power applications” refer 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;
kk. “Ocean Energy Systems” refer to energy systems which convert ocean or
tidal current, ocean thermal gradient or wave energy into electrical or
mechanical energy;
ll. “Off-Grid Systems” refer to electrical systems not connected to the wires
and related facilities of the On-Grid Systems of the Philippines;
mm. “On-Grid System” refers to electrical systems 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;
nn. “Philippine Electricity Market Corporation” (PEMC) refers to the

corporation incorporated upon the initiative of the DOE composed of all
WESM Members and whose Board of Directors will be the PEM Board;
oo. “Philippine National Oil Company” (PNOC) refers to the government

agency created pursuant to Presidential Decree No. 334, as amended;
pp. “Power applications” refer to renewable energy systems or facilities that

produce electricity;
qq. “Registered RE Developer” refers to a RE Developer duly registered with

the DOE;
rr. “Renewable Energy (Systems) Developers or RE Developers” refer to

individual/s or a group of individuals formed in accordance with existing
Philippine Laws engaged in the exploration, development and utilization of
RE resources and actual operation of RE systems/facilities. It shall include
existing entities engaged in the exploration, development and/or utilization
of RE resources, or the generation of electricity from RE resources or both;
ss. “Renewable Energy Market” (REM) refers to the market where the
trading of the RE certificates equivalent to an amount of power generated
from RE resources is made; Output of the Pubcon for Government Agencies
&
tt. “Renewable Energy Policy Framework” (REPF) refers to the long-term

policy developed by the DOE which identifies among others, the goals and
targets for the development and utilization of renewable energy in the
country;
uu. “Renewable Portfolio Standards” refer to a market-based policy that

requires electricity suppliers to source an agreed portion of their energy
supply from eligible RE resources;
vv. “Renewable Energy Service (Operating) Contract (RE Contract)” refers to

the service agreement
between the Government, thru 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 financial closing shall
refer to the pre-development stage. The construction and installation of
facilities up to operation phase shall refer to the development stage;
ww. “Renewable Energy Resources” (RE Resources) refer 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 indefinite 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;
xx. “Renewable Energy Systems” (RE Systems) refer to energy systems

which convert RE resources into useful energy forms, like electrical,
mechanical, etc.;
yy. “Rural Electrification” 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;
zz. “Solar Energy” refers to the energy derived from solar radiation that can
be converted into useful thermal or electrical energy;
aaa. “Solar Energy Systems” refer to energy systems which convert solar
energy into thermal or electrical energy;
bbb. “Small Power Utilities Group” (SPUG) refers to the functional unit of the
NPC mandated under Republic Act No. 9136 to pursue missionary
electrification function;
ccc. “Supplier” refers to any person or entity authorized by the ERC to sell,
broker, market or aggregate electricity to the end-users;
ddd. “Transmission of Electricity” refers to the conveyance of electric power

through transmission lines as defined under Republic Act No. 9136 by
TRANSCO or its buyer/concessionaire in accordance with its franchise and
Republic Act No. 9136;
eee. “Wind Energy” refers to the energy that can be derived from wind that
is converted into useful electrical or mechanical energy;
fff. “Wind Energy Systems” refer to the machines or other related equipment
that convert wind energy into useful electrical or mechanical energy;
ggg. “Wholesale Electricity Spot Market” (WESM) refers to the wholesale

electricity spot market created pursuant to Republic Act No. 9136;
PART II.
Renewable Energy Industry Operations and Development
Rule 4. Renewable Energy Service Contract
The DOE, shall, within one (1) month from issuance of this IRR, formulate
and issue the regulatory framework containingguidelines governing the
issuance, management, monitoring and evaluation of Renewable Energy
Service Contracts from pre-development to development/commercial stage.
Rule 5. Government Share and Local Government Share
a. 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;
b. Provided, That for Integrated Geothermal System, the government share

of 1.5% shall be based on the difference between the price of electricity
generated from the system, valuated per kilowatt hour basis, and the cost of
geothermal steam produced.
c. The government will waive its share from the proceeds of micro-scale
projects for communal purposes and non-commercial operations, which are
not greater than one hundred (100) kilowatts;
d. The distribution of the local government share shall be in accordance with

Sections of 289-294 of Republic Act No. 7160 and other existing laws, rules,
regulations and agreements;
e. Twenty percent (20%) of the local government share shall be

appropriated by their respective Sanggunian to finance local government
and livelihood projects pursuant to Section 294 of Republic Act No. 7160.
Rule 6. Incentives for RE Host Communities / LGUs
Pursuant to Section 31 of the Act, 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 does not exceed one hundred kilowatt hour (100) kwh.
Provided, That excess funds, after serving the end users referred to in the
preceding paragraph, shall be used to subsidize the electricity consumption
of consumers of the same class in the host city, municipality or the province
as the case may be.
The subsidy may be in the form of rebates, refunds and/or any other form as
may be determined by DOE, DOF and ERC, in coordination with NREB. The
DOE, DOF and ERC, shall in coordination with the NREB and in consultation
with the distribution utilities, promulgate the mechanisms to implement this
provision within six (6) months from the effectivity of the Act.
Rule 7. Renewable Portfolio Standard (RPS)
Pursuant to Section 6 of the Act, all stakeholders in the electric power

industry shall contribute to the growth of the renewable energy industry of
the country.
The National Renewable Energy Board shall, in consultation, with appropriate

government agencies shall set the minimum percentage of generation from
solar energy, wind power, run of river hydro, biomass, ocean, in accordance
with NREP, and determine to which sector RPS shall be imposed on a per
grid basis within one (1) year from the effectivity of the Act. The NREB may,
in the future, also set a minimum percentage generation from large
hydropower and geothermal energy.
Rule 8. Feed-In Tariff System
Pursuant to Section 7 of the Act, a feed-in tariff system for electricity

produced from wind, solar, ocean, run-of-river hydropower and biomass is
mandated.
Feed in Tariff refers to price premium for the wind, solar; ocean, run-of-river
hydropower and biomass generated electricity as maybe determined by ERC.
The ERC, within one year from the effectivity of the Act, shall, in
consultation with the National Renewable Energy Board (NREB formulate and
promulgate feed-in tariff system rules prescribing the Feed in Tariff price
determination methodology 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; and
c. Determine the fixed 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 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 the Act and in accordance with the RPS rules that will be
established by the DOE.
Rule 9. Renewable Energy Market (REM)
Pursuant to Section 8 of the Act, to expedite compliance with Section 6 of

the Act, the DOE shall establish the REM and shall direct PEMC to implement
changes to the WESM Rules in order to incorporate the rules specific to the
operation of the REM under the WESM.
Under the supervision of the DOE, thru the Renewable Energy Management
Bureau (REMB) and Electric Power Industry Management Bureau (EPIMB),
the PEMC, shall establish a Renewable Energy Registrar within one (1) year
from the effectivity of the Act and shall issue, keep and verify RE Certificates
corresponding to energy generated from eligible RE facilities.
Such certificates shall be used for compliance with the RPS. For this purpose,
PEMC may impose a transaction fee equal to one half of its prevailing as
market fees on WESM members.
Rule 10. Green Energy Option
Pursuant to Section 9 of the Act, a Green Energy Option program, which

provides end-users the option to choose RE resources as their sources of
energy, shall be established by the DOE.
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 of the Green Energy Option program.
The ERC shall issue the necessary regulatory framework to effect and
achieve the objectives of the Green Energy Option program within six (6)
months from the effectivity of this IRR.
Consistent herewith, TRANSCO, its concessionaire, 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 program.

Any end-user who shall enroll under the Green Energy Option Program shall
be informed by way of its monthly electric bill, how much of its monthly
energy consumption and generation charge is provided by RE facilities.
Rule 11. Net Metering for Renewable Energy
Pursuant to Section 10 of the Act, upon request by distribution end-users,

the distribution utilities shall enter into net-metering agreements with
qualified end-users who will be installing RE system subject to technical
considerations, such as the distribution utility’s metering technical standards
for RE system, and without discrimination.
The ERC, within one (1) year from the effectivity of the Act and 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.
The Distribution Utility shall be entitled to any Renewable Energy Certificate

resulting from net-metering arrangement with the qualified 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, its concessionaire 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.
Rule 12. Transmission and Distribution System Development
Pursuant to Section 11 of the Act, the TRANSCO, its concessionaire or its

successors-in-interest 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.
All applications by RE System for interconnection to the transmission or

distribution system shall comply with all the provisions of the Distribution
Services Open Access Rules (DSOAR) and/or Transmission
System (OATS) including but not limited to Distribution or Grid Impact and
Asset Studies Contribution in Aid of Construction (CIAC) and connection
facilities and charges, as well as other connection policies of the distribution
utility or Transco, its concessionaire or successor in interest.
Rule 13. Intermittent RE Resources
TRANSCO, its concessionaire 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.
Whenever there is a capacity that can be taken by any grid, intermittent

generation will be dispatched. TRANSCO, its concessionaire or its
successors-in-interest shall define the maximum penetration limit that the
grid may absorb and provide appropriate information to PEMC. PEMC shall
set the appropriate market rules in relation with the data provided by
TRANSCO, its concessionaire or its successors-ininterest.
The PEMC and TRANSCO, its concessionaire or its successors-in-interest

shall implement technical mitigation and improvements in the system in
order to ensure safety and reliability of electricity transmission.
All provisions under the WESM RULES which are inconsistent with the
objective of this provision shall be deemed amended and modified. As used
in this IRR, 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 energy resource is location-specific naturally difficult to precisely
predict the availability of RE energy 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.
Rule 14. Off-Grid Renewable Energy Development
Pursuant to Section 10 of the Act, NPC-SPUG or its successors-in-interest

and/or qualified third parties in off-grid areas shall, within one (1) year from
the effectivity of the Act, in the performance of its mandate to provide
missionary electrification, source a minimum percentage of its total annual
generation upon recommendation of the NREB from available RE resources
in the area concerned, as may be determined by the DOE.
As used in the 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 entitled for

the issuance of RE Certificates defined in Section 8 of the Act. In the event
that there is 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 the Act.
PART III.
INCENTIVES FOR RENEWABLE ENERGY PROJECTS AND ACTIVITIES
Rule 15. Requirement for Availment of Incentives
Any person intending to avail of the incentives listed in Rule __ shall comply
with the following requirements:
a. Registration of RE Developers and local manufacturers, Fabricators and

Suppliers of Locally– Produced Renewable Energy Equipment - All RE
Developers and local manufacturers, fabricators and suppliers of locally-
produced renewable energy equipment shall register with the Department of
Energy, through the Renewable Energy Management Bureau in order to
qualify for the availment of incentives pursuant to Sec. 25 of the Act. Upon
registration, a Certificate of DOE Registration shall be issued to each RE
Developer and local manufacturer, fabricator and supplier of locally-
produced renewable energy equipment.
b. Certification from the Department of Energy – Pursuant to Sec. 26, all

certifications and/or endorsements required to qualify for the availment of
the incentives provided for under the Act shall be issued by the DOE through
the Renewable Energy Management Bureau, within 15 days upon receipt of
complete requirements from the applicants. Provided, That the certification
issued by the Department of Energy 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 said fiscal incentives.
Rule 16. Period of Grant of Fiscal Incentives. The fiscal incentives granted
under Section 15 of the Act shall apply to all RE capacities from the
effectivity of the Act.
Rule 17. General Incentives -- Pursuant to Section 15 of the Act, 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 certified by the DOE, in consultation with
the BOI, shall be entitled to the following incentives:
a. Income Tax Holiday (ITH) – For the first 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 first ten (10) years upon the issuance of a certification of an RE
developer as provided in Rule 16(a), the importation of machinery and
equipment, and materials and parts thereof, including control and
communication equipment, shall not be 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 part 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.
The DOF and BIR, in consultation with the DOE, shall formulate the
necessary mechanisms/guidelines to implement this provision within six (6)
months from issuance of this IRR.
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 said real property tax of a
maximum of 1.5 % shall only be imposed on the power plant.
d. Net Operating Loss Carry-Over (NOLCO). – The NOLCO of the RE

Developer during the first 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 the Act shall
not be entitled to NOLCO.
e. Corporate Tax Rate – After seven (7) years of income tax holiday, all RE
Developers,shall pay a corporate tax of ten percent (10%) on its net taxable
income as defined in the National Internal Revenue Act 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.
For purposes of this provision, the ERC, in coordination with the DOE, shall
coordinate to determine the appropriate mechanism to implement the power
rate reduction.
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 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:
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, oceanenergy 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.
The DOE, BI|R and DOF, shall formulate the necessary

mechanisms/guidelines to implement this provision within six (6) months
from issuance of this IRR.
h. Cash Incentive of Renewable Energy Developers for Missionary

Electrification -- A renewable energy developer, established after the
effectivity of the Act, shall be entitled to a cash generation-based incentive
per kilowatt hour rate generated, equivalent to fifty 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,
The ERC, in coordination with the ERC, shall develop a mechanism to

implement the provision granting cash incentive of RE DEVELOPERS for
missionary electrification within six (6) months from issuance of this |IR|R.
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 the 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.
The BIR, in coordination with the DOE, shall, promulgate a revenue

regulation governing the granting of tax credit on domestic capital
equipment and services within six (6) months from the effectivity of this
IRR.
Rule 18. Incentives for Energy Developers.- The following incentives may be
availed of by Energy Developers.
a. Exemption from the Universal Charge – All consumers of electricity

generated from their own generating facilities using re system shall be
exempted from paying the Universal Charge.
All consumers supplied thru Renewable Energy System, free of charge, shall
also be exempted from paying the Universal Charge.
b. Payment of Transmission Charge - A registered RE Developer producing

power and electricity from an intermittent RE resource may opt to pay the
transmission and wheeling charges of TRANSCO, its concessionaire or its
successors-in-interests 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.
c. Hybrid and Cogeneration Systems - The tax exemptions and/or incentives

provided for in Section 15 of the 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.
Rule 19. Incentives for RE Commercialization. - Pursuant to Section 21 of

the Act, all manufacturers, fabricators and suppliers of locally-produced RE
equipment and components duly recognized and accredited by the DOE, in
consultation with DOST, DOF and DTI, shall, upon registration with the BOI,
be entitled to the privileges set forth under this section. Consistent with Art.
7, item (20) of EO No. 226, the registration with the BOI, as provided for in
Section 15 and Section 21 of the 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 qualified RE facilities
based on the 14 Section 14 of this implementing rules and regulations. It is
further mandated that the applications for registration will be positively
acted upon by BOI on the basis of the accreditation issued by 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 the Act shall be entitled to the following incentives:
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
duties and value added tax: 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;
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 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; and
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.
Rule 20. Other Incentives – The following incentives may also be availed of
under the Act:
a. Incentives for Farmers Engaged in the Plantation of Biomass Resources -

Pursuant to Section 22 of the 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 certified 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, bulk handling facilities, such as conveyors and mini-loaders,
weighing scales, harvesting equipment, and spare parts of all agricultural
equipment within ten (10) years from the effectivity of the Act. Endorsement
of the DOE must be secured before any importation, sale, transfer or
disposition of any agricultural equipment and machinery referred above is
made.
b. Tax Rebate for Purchase of RE Components – To encourage the adoption

of RE technologies, the DOF, in consultation with DOST, DOE, and 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.
c. Financial Assistance Program - Pursuant to Section 29 of the Act,

government financial institutions such as the Development Bank of the
Philippines (DBP), Land Bank of the Philippines (LBP), Phil- Exim Bank and
other government financial institutions shall, in accordance with and to the
extent allowed by the enabling provisions of their respective charters or
applicable laws, provide preferential financial packages for the development,
utilization and commercialization of RE projects as duly recommended and
endorsed by the DOE.
The concerned government financial institutions (GFIs) shall formulate

programs to implement the provision on granting of preferential financial
packages for RE projects within six months from the effectivity of this IRR
d. 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.
The waste-to-energy technologies shall refer to systems which convert to

biodegradable materials such as, but not limited to, animal manure or
agricultural waste, into useful energy through processes such as anaerobic
digestion, fermentation and gasification, 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).
PART IV.
ORGANIZATION
Rule 21. Lead Agency – Pursuant to Section 5 of the Act, the DOE shall be
the lead agency mandated to implement the provisions of the Act and this
Implementing Rules and Regulations.
Rule 22. Creation of the National Renewable Energy Board - Pursuant to
Section 27 of the Act, the National Renewable Energy Board (NREB) is
created and 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 or their Board 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 nominating organization for the private sector representatives, shall be

duly recognized by concerned government agencies, and confirmed to have
a proven track record by DOE.
The members of the Board and their alternates must be of legal age, of
proven integrity and probity, with a working knowledge and understanding
of RE industry and occupying the level of Director for government agencies
and Manager for private entities.
a. Meetings of the NREB – Regular meetings of the NREB shall be held at

least once every quarter on a date and in a place fixed by the
Board. Provided, That representatives from the National Electrification
Authority, Department of Science and Technology, Department of
Agriculture, and other concerned agencies may be invited to attend the
NREB meetings.
b. Member of the NREB may assign an alternate representative who must be

occupying at least the level of Director in the case of government agencies
or a Manager in the case of the private sector respectively.
c. Remuneration - The NREB shall determine the appropriate compensation /

remuneration of its members in accordance with existing laws, rules and
regulations, and shall make the necessary requests and representations to
the Department of Budget and Management for the allocation and
appropriation of funds necessary to effectively perform its duties and
functions.
d. Technical Secretariat - The NREB shall be assisted by a Technical

Secretariat from the Renewable Energy Management Bureau of the DOE,
created under Section 32 of the Act, and shall directly report to the Office of
the Secretary or the Undersecretary of the Department, as the case maybe,
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 REMB
shall be determined by the Board, subject to existing civil service rules and
regulations and approval by the DBM for the allocation and appropriation of
funds necessary to effectively perform its duties and functions.
9) Powers and Functions - Pursuant to Section 27 of the Act, the NREB shall
have the following powers and functions:
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 specific actions to facilitate theimplementation 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 the Act and administered by the DOE; and
e. Perform such other functions, as may be necessary, to attain the

objectives of the Act.
Rule 23. Creation of the Renewable Energy Management Bureau (REMB) -
Pursuant to Section 32 of the Act, and for the purpose of effectively

implementing the provisions of the Act, a Renewable Energy Management
Bureau (REMB) under the DOE shall be established.
The existing plantilla of the Renewable Energy Management Division of the

Energy Utilization Management Bureau of the DOE shall form the nucleus of
REMB in performing the duties, functions and responsibilities of the said
bureau.
For this purpose the existing REMD is hereby dissolved.
a. Organizational Structure - The DOE, thru the Office of the Secretary shall
within 6 months from effectivity of this IRR, determine the REMB
organizational structure and staffing pattern/staff complement in
consultation with the DBM, in accordance with existing civil service rules and
regulations.
b. Budget - The funds necessary for the creation of the REMB shall be taken
from the current appropriations of the DOE. Thereafter, the budget for the
REMB shall be included in the annual General Appropriations Act.
Rule 24. Powers and Functions of REMB - Pursuant to Section 32 of the Act,
the REMB shall have the
following powers and functions:
(a) Develop, formulate and implement policies, plans and programs such as
NREP related to the accelerated development, transformation, utilization and
commercialization of renewable energy resources and technologies;
(b) Develop and maintain a centralized, comprehensive and unified data and
information base on renewable energy resources to ensure the efficient
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 efficient 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 including standards, guidelines, among others; 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 such as i)
evaluation, processing and approval of service contracts, ii) issuance of
permits, certifications and accreditations; and iii) monitoring
theimplementation of and evaluation for further expansion of,, the NREP
prepared by the DOE pursuant to Rule ___ of this Act. The review of REPF
and NREP shall be done annually.
PART V.
RENEWABLE ENERGY TRUST FUND
Rule 25. Renewable Energy Trust Fund (RETF).
a. Exclusive Fund Administration - Pursuant to Section 28 of the Act, a

Renewable Energy Trust Fund will be established to be administered by the
DOE as a special account in any of the GFIs. The RETF shall be used
exclusively to:
i. Finance the research, development, demonstration, and promotion of the

widespread and productive use of RE systems for power and non-power
applications
ii. 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.
iii. 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;
iv. Conduct nationwide resource and market assessment studies for the
power and nonpower applications of renewable energy systems;
v. Propagate RE knowledge by accrediting, tapping, training, and providing

benefits to institutions, entities and organizations which can extend the
promotion and dissemination of RE benefits to the national and local levels;
and
vi. Fund such other activities necessary or incidental to the attainment of the
b. Fund Utilization: The funds may be used through grants, loans, equity
investments, loan guarantees, insurance, counterpart fund or such other
financial arrangements necessary for the attainment of the objectives of the
Act: Provided, That the use or allocation thereof shall, as far as practicable,
be done through a competitive and transparent manner.
c. Sources: The RETF shall be funded from:
i. Proceeds from the emission fees collected from all generating facilities
consistent with Republic Act No. 8749 or the Philippine Clean Air Act;
ii. One and ½ percent (1.5%) of the net annual income of the Philippine
Charity Sweepstakes Office;
iii. One and ½ percent (1.5%) of the net annual income of the Philippine
Amusement and Gaming Corporation;
iv. One and ½ percent (1.5%) of the net annual dividends remitted to the
National Treasury of the Philippine National Oil Company and its
subsidiaries;
v. 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. To ensure this goal, the
BIR shall assist the DOE in formulating the Rules and Regulations to
implement this provision;
vi. One and ½ percent (1.5%) of the proceeds of the Government share
collected from the development and use of indigenous non-renewable energy
resources;
vii. Any revenue generated from the utilization of the RETF; and
viii. Proceeds from the fines and penalties imposed under the Act.
For this purpose, the DOE shall, within 6 months from approval of IRR,
formulate the guidelines to ensure the competitive and transparent
utilization of the fund.
PART VI.
PROHIBITED ACTS AND SANCTIONS
Rule 26. Prohibited Acts - Pursuant to Section 35 of the Act, any person or
entity found in violation of any of the following shall be subject to
appropriate criminal, civil, and/or administrative sanctions as provided
herein and other existing applicable laws, rules and regulations:
(a) Non-compliance or violation of the RPS rules;
(b) Willful refusal to undertake net metering arrangements with qualified

distribution grid users;
(c) Falsification or tampering of public documents or official records to avail

of the fiscal and nonfiscal incentives provided under the Act;
(d) Failure and willful refusal to issue the certificate referred to in Section 26
of the Act; and
(e) Non-compliance with the established guidelines that the DOE adopted for
the implementation of the Act.
Rule 27. Administrative Liability - Without prejudice to incurring criminal

liability, any person who commits any of the prohibited acts under Section
35 of the Act, this IRR and other issuances relative to the implementation of
the Act shall be subject to the following administrative fines and penalties:
The DOE may impose the penalty ranging from Reprimand to Revocation of
License with corresponding fine depending on the gravity of the offense for
the following offenses:
(1) Non-compliance or violation of the RPS rules;
(2) Willful refusal to undertake net metering arrangements with qualified

distribution grid users; and
(3) Non-compliance with the established guidelines that the DOE adopted for
the implementation of the Act.
The DOE may revoke the license, permit, certification or endorsement and
impose fine on any person or company found to have committed the
falsification or tampering of public documents or official records to avail of
the fiscal and non-fiscal incentives provided under Sec. 35 (c) of the Act,
Any person who shall fail or willfully refuse to issue certificate pursuant to
____ shall be given a warning for first offense, or a penalty of reprimand for
second offense and suspension for third offense.
Administrative actions initiated pursuant to this section shall be separate and
independent from any criminal actions that may arise for violations of
Section 29 of the Act.
Rule 28. Administrative Procedures - The DOE may initiate motu propio, or
upon filing of any complaint for the violation of any prohibited act under
Section 35 of the Act, the IRR or related issuances, an administrative
proceeding against any such person or entity. In the exercise thereof, the
DOE may commence such hearing or inquiry by an order to show cause,
setting forth the grounds for such order.
The administrative proceeding will be conducted before the DOE to

determine culpability of alleged offenders and to determine the applicable
penalties. The administrative proceedings under this IRR shall be governed
by the existing rules of practice and procedure before the DOE.
Rule 29. Criminal Liability - In accordance with Section 36 of the Act, 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.
a. In the case of association, partnership or corporations, the penalty shall

be imposed on the partner, president, chief operating officer, chief executive
officer, directors or officers responsible for the violation.
b. The commission of any prohibited acts provided for under Section 35 of

the Act, upon conviction thereof, shall suffer the penalty of imprisonment of
from one (1) year to five (5) years, or a fine 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.
PART VII.
TRANSITORY AND OTHER PROVISIONS
Rule 30. Transitory Provision - Benefits or incentives extended to RE

developers under existing laws not amended or withdrawn under this Act
shall remain in full force and effect. No provision of this Act shall be taken as
to diminish any right vested by virtue of existing laws or contract. However,
in order to avail of the incentives provided under the Act and this IRR, the
RE Developer is required to register in the DOE pursuant to Rule 15 (a)
within one (1) year from effectivity of this IRR.
Rule 31. Environmental Compliance. - Pursuant to Section 14 of the Act, 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:
Provided, That the RE Developer may secure Environmental Clearance

Certificate from the appropriate regional office of the DENR.
Rule 32. Congressional Oversight Committee – Upon the effectivity of this

Act, the Joint Congressional Power Commission created under Section 62 of
RA 9136 shall exercise oversight power over the implementation of this Act.
Rule 33. Reportorial Requirements. - The NREB, shall, in coordination with

the Department of Energy, shall submit a yearly report on
the implementation of the Act to the Philippine Congress, through the Joint
Congressional 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 benefits 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
review of the incentives as provided for in the Act towards ensuring the full
development of the country's RE capacities under a rationalized market and
incentives scheme.
Rule 34. Appropriations. -Funds necessary to finance the activities of

concerned government agencies as provided in the Act and this IRR shall be
included in the annual General Appropriations Act.
Rule 35. Separability Clause. If any provision of this IRR is declared

unconstitutional, the remainder of the Act or the provision not otherwise
affected shall remain valid and subsisting.
Rule 36. Repealing Clause. Pursuant to Section 39 of the Act, and

consistent with Section 13 of the 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.
Rule 37. Effectivity. This IRR shall take effect fifteen (15) days after its
publication in at least two (2) newspapers of general circulation
Signed this _____ of ______200__ at the DOE, Energy Center, Merritt Road,
Fort Bonifacio,
DOE CIRCULAR NO. DC2009-05-0008
RULES AND REGULATIONS IMPLEMENTING REPUBLIC ACT NO. 9513
Pursuant to Section 33 of Republic Act No. 9513, otherwise known as

the "Renewable Energy Act of 2008", the Department of Energy, in
consultation with the Senate and House of Representatives Committees on
Energy, relevant government agencies, and all Renewable Energy (RE)
stakeholders, hereby issues, adopts and promulgates the following
implementing rules and regulations. aCTADI
PART I
General Provisions
RULE 1
Title, Declaration of Policies and Definition of Terms
SECTION 1. Title and Scope. —
This Department Circular shall be known as the "Implementing Rules
and Regulations (IRR) of Republic Act No. 9513", otherwise known as the
"Renewable Energy Act of 2008", and hereinafter referred to as the "Act" in
this IRR.
The scope of this IRR is to provide rules, regulations, and guidelines for
the:
(a) Exploration, development, utilization and commercialization of
renewable energy resources such as biomass, solar, wind,
hydropower,geothermal and ocean energy sources, including
application of hybrid systems and other emerging renewable
energy technologies in the Philippines for the generation,
transmission, distribution, sale and use of electricity, and fuel
generated from renewable energy resources;
(b) Establishment of the framework for the accelerated sustainable
development and advancement of renewable energy resources,
and the development of a strategic program to increase its
utilization;
(c) Clarification of specific provisions of the Act and the responsibilities
and functions of various government agencies, institutions,
government-owned and controlled corporations and local
government units, the private sector and other stakeholders, and
their relationships with the National Renewable Energy Board
(NREB); and
(d) Direction and support for existing and new renewable energy
developers and manufacturers, fabricators and suppliers of
locally-produced renewable energy equipment.
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,
hydropower,geothermal, and ocean energy sources, and
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 fluctuations 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 efficient and cost-
effective commercial application by providing fiscal and non-fiscal
incentives;
(c) Encourage the sustainable 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 promotion of health and safety, and the
protection of the environment;
(d) Promote the full development and use of renewable energy as a tool
to address the cross-cutting issues of gender, poverty, and
economic development; and
(e) Establish the necessary infrastructure and mechanisms to carry out
the mandates specified in the Act and other existing laws. CaHcET
SECTION 3. Definition of Terms. —

As used in the Act and this IRR, the following terms shall be defined as
follows:
(a) "Ancillary Services" refers to support services which are necessary
to support the transmission capacity and transmission of energy
from resources to loads towards maintaining power quality,
reliability, and security of the grid through frequency regulating
and contingency reserves, reactive power support, black start
capability, and other services as may be determined by the
Energy Regulatory Commission (ERC);
(b) "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
the Act;
(c) "Biomass Resources" refers to non-fossilized, biodegradable organic
materials originating from naturally-occurring or cultured plants or
parts thereof, 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 including
sugarcane and coconut, rice hulls, rice straws, coconut husks
and shells, wood chips/residues, forest residues, 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;
(d) "Board of Investments" (BOI) refers to an attached agency of the
Department of Trade and Industry (DTI) created under Republic
Act No. 5186, as amended;
(e) "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;
(f) "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 the
Act;
(g) "Department of Environment and Natural Resources" (DENR) refers
to the government agency created pursuant to Executive Order
No. 192;
(h) "Department of Finance" (DOF) refers to the government agency
created pursuant to Executive Order No. 127, as amended;
(i) "Department of Science and Technology" (DOST) refers to the
government agency created pursuant to Executive Order No.
128;
(j) "Department of Trade and Industry" (DTI) refers to the government
agency created pursuant to Executive Order No. 133; aHcACI
(k) "Distributed Generation" refers to a system of small generation

entities supplying directly to the distribution grid, any one of which
shall not exceed 100 kilowatts in capacity;
(l) "Distribution of Electricity" refers to the conveyance of electricity by a
distribution utility through its distribution system pursuant to the
provisions of Republic Act No. 9136;
(m) "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;
(n) "Electric Power Industry Reform Act (EPIRA) 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);
(o) "Energy Regulatory Commission" (ERC) refers to the independent
quasi-judicial regulatory agency created pursuant to Republic Act
No. 9136;
(p) "Generation Company" refers to any person or entity authorized by
the ERC to operate facilities used in the generation of electricity;
(q) "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;
(r) "Geothermal Energy" as used herein and in the context of the Act,
shall be considered renewable and the provisions of the 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 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; IDSaTE
(s) "Geothermal Energy Systems" refers to machines or other
equipment that converts Geothermal Energy into useful power;
(t) "Geothermal Resources" refers to mineral resources, classified 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 fluids artificially
introduced into geothermal formations; (iii) heat or associated
energy found in geothermal formations; and (iv) any by-product
derived from them;
(u) "Government Share" refers to the amount due the national
government and local government units (LGUs) from the
exploitation, development, and utilization of naturally-occurring
RE resources such as geothermal, wind, solar, ocean, and
hydropower, excluding biomass;
(v) "Green Energy Option" refers to the mechanism to empower end-
users to choose renewable energy in meeting their energy
requirements;
(w) "Grid" refers to the high voltage backbone system of interconnected
transmission lines, sub-stations, 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;
(x) "Host LGU" refers to the local government unit where the energy
resource and/or energy generating facility is located;
(y) "Hybrid Systems" refers to any power or energy generation facility
which makes use of two 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, hydropower/fossil fuel systems, integrated
solar/biomass systems, integrated wind/fossil fuel systems, with a
minimum of ten megawatts (10 MW) or ten percent (10%) of the
annual energy output provided by the RE component;
(z) "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; cEHITA
(aa) "Hydroelectric Power Resources" or "Hydropower

Resources" refers to water resources found technically feasible
for the development of hydropower projects which include rivers,
lakes, waterfalls, irrigation canals, springs, ponds, and other
water bodies;
(bb) "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;
(cc) "Local Government" refers to the political subdivisions established
by or in accordance with the Philippine Constitution pursuant to
Executive Order No. 292 or Republic Act No. 7160, which include
the province, city, municipality and barangay;
(dd) "Local Government Share" refers to the amount due the local
government units (LGUs) from the exploitation, development and
utilization of naturally-occurring renewable energy resources; HCDAcE
(ee) "Micro-Scale Project" refers to an RE project with capacity not

exceeding one hundred kilowatts (100kW);
(ff) "Missionary Electrification" refers to the provision of basic electricity
service in unviable areas with the aim of bringing the operations
in these areas to viability levels;
(gg) "National Government" refers to the entire machinery of the central
government, as distinguished from the different forms of local
governments pursuant to Executive Order No. 292 or the
Administrative Code of 1987;
(hh) "National Government Share" refers to the amount due the national
government from the exploitation, development and utilization of
naturally-occurring RE resources;
(ii) "National Power Corporation" (NPC) refers to the government
corporation created under Republic Act No. 6395, as amended by
Republic Act No. 9136; aTEAHc
(jj) "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;
(kk) "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;
(ll) "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
other applications such as, but not limited to,
industrial/commercial cooling, and fuel for cooking and transport;
(mm) "Ocean Energy Systems" refers to energy systems which convert
ocean or tidal current, ocean thermal gradient or wave energy
into electrical or mechanical energy; EcHTCD
(nn) "Off-Grid Systems" refers to electrical systems not connected to

the wires and related facilities of the on-grid systems of the
Philippines;
(oo) "On-Grid System" refers to the electrical system composed of
interconnected transmission lines, distribution lines, sub-stations,
and related facilities for the purpose of conveyance of bulk power
on the grid of the Philippines;
(pp) "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;
(qq) "Philippine National Oil Company" (PNOC) refers to the
government agency created pursuant to Presidential Decree No.
334, as amended;
(rr) "Power Applications" refers to renewable energy systems or
facilities that produce electricity;
CETDHA
(ss) "Registered RE Developer" refers to an RE developer duly

registered with the DOE;
(tt) "Renewable Energy (RE) Certificate" refers to a certificate issued by
the RE Registrar to electric power industry participants showing
the energy sourced, produced, and sold or used. RE certificates
may be traded in the RE Market in complying with the RPS;
(uu) "Renewable Energy (Systems) Developers" or "RE
Developers" refers to individual/s or juridical entity created,
registered and/or authorized to operate in the Philippines in
accordance with existing Philippine laws and engaged in the
exploration, development and utilization of RE resources and
actual operation of RE systems/facilities. It shall include existing
entities engaged in the exploration, development and/or utilization
of RE resources, or the generation of electricity from RE
resources, or both; aEHIDT
(vv) "Renewable Energy Market" (REM) refers to the market where the
trading of the RE certificates equivalent to an amount of power
generated from RE resources is made;
(ww) "Renewable Energy Policy Framework" (REPF) refers to the long-
term policy developed by the DOE which identifies, among
others, the goals and targets for the development and utilization
of renewable energy in the country;
(xx) "Renewable Energy (RE) Registrar" refers to an entity that issues,
keeps and verifies RE certificates corresponding to energy
generated from eligible RE facilities and sold to or used by end-
users;
(yy) "Renewable Energy Service/Operating Contract (RE
Contract)" refers to the service agreement between the
Government, through the President or the DOE, and an RE
Developer over an appropriate period as determined by the DOE
in which the RE Developer has the exclusive right to explore and
develop a particular RE area. 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 financial closing shall refer to the pre-
development stage. The construction and installation of facilities
up to the operation phase shall refer to the development
stage; cHAaEC
(zz) "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 indefinite 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;
(aaa) "Renewable Energy Systems" (RE Systems) refers to energy
systems which convert RE resources into useful energy forms,
like electrical, mechanical, etc.;
(bbb) "Renewable Portfolio Standards" (RPS) refers to a market-based
policy that requires electric power industry participants, including
suppliers, to source an agreed portion of their energy supply from
eligible RE Resources;
(ccc) "Rural Electrification" 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;
(ddd) "Solar Energy" refers to the energy derived from solar radiation
that can be converted into useful thermal or electrical energy; acITSD
(eee) "Solar Energy Systems" refers to energy systems which convert

solar energy into thermal or electrical energy;
(fff) "Small Power Utilities Group" (SPUG) refers to the functional unit of
the NPC mandated under Republic Act No. 9136 to pursue
missionary electrification function;
(ggg) "Supplier" refers to any person or entity authorized by the ERC to
sell, broker, market or aggregate electricity to the end-users;
(hhh) "Transmission of Electricity" refers to the conveyance of electric
power through transmission lines as defined under Republic Act
No. 9136 by TRANSCO or its buyer/concessionaire in
accordance with its franchise and Republic Act No. 9136;
(iii) "Wind Energy" refers to the energy that can be derived from wind
that is converted into useful electrical or mechanical energy;
(jjj) "Wind Energy Systems" refers to the machines or other related
equipment that convert wind energy into useful electrical or
mechanical energy; and EcDSHT
(kkk) "Wholesale Electricity Spot Market" (WESM) refers to the

wholesale electricity spot market established by the DOE
pursuant to Republic Act No. 9136.
PART II
Renewable Energy Industry Development and Operations
RULE 2
Renewable Energy Policy Mechanisms
SECTION 4. Renewable Portfolio Standards. —
The Renewable Portfolio Standards (RPS) is a policy which places an
obligation on electric power industry participants such as generators,
distribution utilities, or suppliers to source or produce a specified fraction of
their electricity from eligible RE Resources, as may be determined by NREB.
(a) Purpose: The purpose of the RPS is to contribute to the growth of
the renewable energy industry by diversifying energy supply and
to help address environmental concerns of the country by
reducing greenhouse gas emissions. DaTICE
(b) Mandate: RPS shall be imposed on the electric power industry
participants, serving on-grid areas, on a per grid basis, as may be
determined by the NREB.
(c) Formulation of RPS Rules: The NREB shall, in consultation with
appropriate government agencies and in accordance with the
National Renewable Energy Program (NREP), set the minimum
percentage of generation from eligible RE Resources based on
the sustainability of the RE Resources, the available capacity of
the relevant grids, the available RE Resources within the specific
grid, and such other relevant parameters. The NREB shall, within
one (1) year from the effectivity of the Act, determine to which
sector the RPS shall be imposed on a per grid basis, in
accordance with the NREP.
Upon the recommendation of the NREB, the DOE shall, within six (6)
months from the effectivity of this IRR, formulate and promulgate
the RPS Rules which shall include, but not be limited to, the
following:
(1) Types of RE Resources, and identification and certification of
generating facilities using said resources that shall be
required to comply with the RPS obligations;
(2) Yearly minimum RPS requirements upon the establishment of
the RPS Rules;
(3) Annual minimum incremental percentage of electricity sold by
each RPS-mandated electricity industry participant which is
required to be sourced from eligible RE Resources and
which shall, in no case, be less than one percent (1%) of its
annual energy demand over the next ten (10) years; CIaASH
(4) Technical feasibility and stability of the transmission and/or

distribution grid systems; and
(5) Means of compliance by RPS-mandated electricity industry
participant of the minimum percentage set by the
government to meet the RPS requirements including direct
generation from eligible RE Resources, contracting the
energy sourced from eligible RE Resources, or trading in
the REM.
SECTION 5. Feed-in Tariff (FiT) System. —
The Feed-in Tariff system is a scheme that involves the obligation on
the part of electric power industry participants to source electricity from RE
generation at a guaranteed fixed price applicable for a given period of time,
which shall in no case be less than twelve (12) years, to be determined by the
ERC.
(a) Purpose: This system shall be adopted to accelerate the
development of emerging RE Resources through a fixed tariff
mechanism.
(b) Mandate: A FiT system shall be mandated for wind, solar, ocean,
run-of-river hydropower, and biomass energy resources.
(c) Guidelines Governing the FiT System:
(1) Priority connections to the grid for electricity generated from
emerging RE Resources such as wind, solar, ocean, run-
of-river, hydropower, and biomass power plants within the
territory of the Philippines;
(2) The priority purchase, transmission of, and payment for such
electricity by the grid system operators; aTcSID
(3) Determination of the fixed tariff to be paid for electricity

produced from each type of emerging RE Resources and
the mandated number of years for the application of such
tariff, which shall in no case be less than twelve (12) years;
(4) Application of the FiT to the emerging RE Resources to be
used in compliance with the RPS. Only electricity
generated from wind, solar, ocean, run-of-river
hydropower, and biomass power plants covered under the
RPS, shall enjoy the FiT; and
(5) Other rules and mechanisms that are deemed appropriate
and necessary by the ERC, in consultation with the NREB,
for the full implementation of the FiT system.
Within one (1) year from the effectivity of the Act, the ERC shall, in
consultation with the NREB, formulate and promulgate the FiT system rules.
SECTION 6. Green Energy Option Program. —
The Green Energy Option program is a mechanism to be established by
the DOE which shall provide end-users the option to choose RE Resources
as their source of energy.
Within six (6) months from the effectivity of this IRR, the DOE shall, in
consultation with the NREB, promulgate the appropriate implementing rules
and regulations which are necessary, incidental, or convenient to achieve the
objectives of the Green Energy Option program. TDcEaH
The ERC shall, within six (6) months from the effectivity of this IRR,
issue the necessary regulatory framework to effect and achieve the objectives
of the Green Energy Option program.
The TRANSCO, its concessionaire, or its successors-in-interest,
distribution utilities (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 program.
Any end-user who shall enroll under the Green Energy Option program
shall 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 7. Net-Metering for Renewable Energy. —
Net-Metering is a consumer-based renewable energy incentive scheme
wherein electric power generated by an end-user from an eligible on-site RE
generating facility and delivered to the local distribution grid may be used to
offset electric energy provided by the DU to the end-user during the applicable
period.
(a) Purpose: The Net-Metering program shall be implemented to
encourage end-users to participate in renewable electricity
generation.
(b) Mandate: Upon request by distribution end-users, the DUs shall,
without discrimination, enter into Net-Metering agreements with
qualified end-users who will be installing an RE System, subject
to technical and economic considerations, such as the DU's
metering technical standards for the RE System.
As used in this IRR, "Qualified End-users" refers to entities that
generate electric power from an eligible on-site RE generating facility, such
as, but not limited to, house or office building with photovoltaic system that
can be connected to the grid, for the purpose of entering into a Net-Metering
agreement.
Within one (1) year from the effectivity of the Act, the ERC shall, in
consultation with the NREB and the electric power industry participants,
establish net-metering interconnection standards, pricing methodology, and
other commercial arrangements necessary to ensure the success of the Net-
Metering for the RE program.
The DU shall be entitled to any RE Certificate resulting from Net-
Metering arrangements with the qualified end-user who is using an RE
Resource to provide energy. Such RE Certificate shall be credited in
compliance with the obligations of the DUs under the RPS.
The DOE, ERC, TRANSCO, its concessionaire or its successor-in-
interest, DUs, PEMC and all relevant parties are hereby mandated to provide
the necessary mechanisms for the physical connection, consistent with the
Grid and Distribution Codes, and commercial arrangements, necessary to
ensure the success of the Net-Metering for the RE program. HICcSA
SECTION 8. Transmission and Distribution System Development. —

The TRANSCO, its concessionaire or its successor-in-interest, and all
DUs, shall:
(a) Include the required connection facilities for RE-based power
facilities in the Transmission and Distribution Development Plans,
subject to the approval by the DOE; and
(b) Effect connection of RE-based power facilities with the transmission
or distribution system upon receipt of a formal notice of the
approval by the DOE and the start of the commercial operations
of such RE-based power facilities.
The connection facilities of RE power plants, including any extension of
transmission and distribution lines, shall be subject only to ancillary services
covering such connections, pursuant to the ERC Rules and Guidelines on
Open Access Transmission Services.
The ERC shall, in consultation with the NREB, TRANSCO, its
concessionaire or its successors-in-interest, provide the mechanism for the
recovery of the cost of these connection facilities.
SECTION 9. 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 IRR, "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 gasification, 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). TEAaDC
RULE 3
Renewable Energy Market
SECTION 10. Creation of the Renewable Energy Market. —
To expedite compliance with the establishment of the RPS, the DOE
shall establish the Renewable Energy Market (REM). The REM shall be a
sub-market of the WESM where the trading of RE Certificates may be made.
The DOE shall, within six (6) months from the effectivity of this IRR,
establish the framework that will govern the operation of the REM. The PEMC
shall, within one (1) year from the effectivity of the Act, implement changes to
incorporate the rules specific to the operation of the REM under the WESM.
SECTION 11. Establishment of the Renewable Energy Registrar. —
Under the supervision of the DOE, the PEMC shall, within one (1) year
from the effectivity of the Act, establish and operate the Renewable Energy
Registrar and shall issue, keep, and verify RE Certificates corresponding to
energy generated from the eligible RE facilities.
Such RE Certificates shall be credited in compliance with any obligation
under the RPS. For this purpose, the PEMC may impose a transaction fee
equal to half of what the PEMC currently charges regular WESM players.
RULE 4
Off-Grid Development
SECTION 12. Off-Grid Renewable Energy Development. —
Within one (1) year from the effectivity of the Act, the NPC-SPUG or its
successors-in-interest, DUs concerned, and/or qualified third parties in off-grid
areas shall, in the performance of its mandate to provide missionary
electrification, source a minimum percentage of its total annual generation
from available RE Resources in the area concerned as may be determined by
the DOE, upon recommendation of the NREB.
Eligible RE generation in off-grid and missionary areas shall be entitled
to the issuance of RE Certificates pursuant to Chapter III, Section 8 of the Act
and Rule 3, Section 11, of this IRR. In the event that there is no viable RE
Resource in the off-grid and missionary areas, the relevant supplier in off-grid
and missionary areas shall still be obligated to comply with the RPS
requirements provided under Chapter III, Section 6 of the Act and Rule 2,
Section 4, of this IRR.CTIDcA
PART III
Incentives for Renewable Energy Projects and Activities
RULE 5
General Incentives and Privileges for Renewable Energy Development
SECTION 13. Fiscal Incentives for Renewable Energy Projects and
Activities. —
DOE-certified existing and new RE Developers of RE facilities, including
Hybrid Systems, in proportion to and to the extent of the RE component, for
both Power and Non-Power Applications, shall be entitled to the following
incentives:
A. Income Tax Holiday (ITH)
(1) Period of Availment — The duly registered RE Developer shall be
fully exempt from income taxes levied by the National
Government for the period as follows:
(a) Existing RE Projects — seven (7) years from the start of
commercial operations;
All RE Developers that acquire, operate and/or administer
existing RE facilities that were or have been in commercial
operation formore than seven (7) years, upon the effectivity
of the Act, shall not be entitled to ITH, except for any
additional investment.
(b) New investment in RE Resources — seven (7) years from the
start of commercial operations resulting from new
investments; and
(c) Additional investment in the RE Project — not more than three
(3) times the period of the initial availment by the existing
or new RE project or covering new or additional
investments. CTDacA
The maximum period within which an RE Developer may be

entitled to an ITH shall be twenty-one (21) years, inclusive
of the initial 7-year ITH for its new and additional
investments in a specific RE facility.
(2) Entitlement for New and Additional Investments subject to prior
approval by the DOE
(a) New Investment — RE Developers undertaking discovery and
development of new RE Resource distinct from their
registered operations may qualify as new projects, subject
to the setting up of separate books of accounts. In such
cases, a fresh package of ITH from the start of commercial
operations shall apply.
(b) Additional Investment — The ITH for additional investments in
an existing RE project shall be applied only to the income
attributable to the additional investment.
Additional investment may cover investments for improvements,
modernization, or rehabilitation duly registered with the
DOE, which may or may not result in increased capacity,
subject to the conditions to be determined by the DOE,
such as, but not limited to, the following:
(i) Identification of the phases/stages of production
scheduled for modernization/rehabilitation; and
(ii) Improvements such as reduced production/operational
costs, increased production/operational efficiency,
and better product quality of the RE facilities.
B. Exemption from Duties on RE Machinery, Equipment, and Materials
Within the first ten (10) years from the issuance of a Certificate of
Registration to an RE Developer, the importation of machinery and
equipment, and materials and parts thereof, including control and
communication equipment, shall be exempt from tariff duties.
(1) Conditions for Duty-Free Importation — An RE Developer may
import machinery and equipment, materials and parts thereof
exempt from the payment of any and all tariff duties due thereon
subject to the following conditions:
(a) The machinery and equipment are directly and actually
needed and will be used exclusively in the RE facilities for
the transformation of and delivery of energy to the point of
use;
(b) The importation of materials and spare parts shall be
restricted only to component materials and parts for the
specific machinery and/or equipment authorized to be
imported; acHTIC
(c) The kind of capital machinery and equipment to be imported

must be in accordance with the approved work and
financial program of the RE facilities; and
(d) Such importation shall be covered by shipping documents in
the name of the duly registered RE Developer/operator to
whom the shipment will be directly delivered by customs
authorities.
(2) Sale or Disposition of Capital Equipment — Any sale, transfer,
assignment, donation, or other modes of disposition of originally
imported capital equipment/machinery including materials and
spare parts, brought into the RE facilities of the RE Developer
which availed of duty-free importation within ten (10) years from
date of importation shall require prior endorsement of the DOE.
Such endorsement shall be granted only if any of the following
conditions is present:
(a) If made to another RE Developer enjoying tax and duty
exemption on imported capital equipment;
(b) 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;
(c) Exportation of the used capital equipment, machinery, spare
parts or source documents or those required for RE
development; and
(d) For reasons of proven technical obsolescence as may be
determined by the DOE.
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 require
prior endorsement by the DOE and shall no longer be
subject to the payment of taxes and duties. DaIACS
Within six (6) months from the issuance of this IRR, the DOF/Bureau of
Customs (BOC) and the Bureau of Internal Revenue (BIR) shall, in
consultation with the DOE, formulate the necessary mechanisms/guidelines to
implement this provision.
C. Special Realty Tax Rates on Equipment and Machinery
Realty and other taxes on civil works, equipment, machinery, and other
improvements by 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 the case of an integrated RE resource development and Generation Facility
as provided under Republic Act No. 9136, the real property tax shall be
imposed only on the power plant.
As used in this IRR, "Original Cost" shall refer to (1) the tangible cost of
construction of the power plant component, or of any improvement thereon,
regardless of any subsequent transfer of ownership of such power plant; or
(2) the assessed value prevailing at the time the Act took into effect or at the
time of the completion of the power plant project after the effectivity of the Act,
as the case may be, and in any case assessed at a maximum level of eighty
percent (80%), whichever is lower. DTcACa
"Net Book Value" shall refer to the amount determined by applying

normal depreciation on the original cost based on the estimated useful life.
D. Net Operating Loss Carry-Over (NOLCO)
The NOLCO of the RE Developer during the first three (3) years from
the start of commercial operation 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, subject to the following conditions:
(a) The NOLCO had not been previously offset as a deduction from
gross income; and
(b) The loss should be a result from the operation and not from the
availment of incentives provided for in the Act.
E. Corporate Tax Rate
After availment of the ITH, all Registered RE Developers shall pay a
corporate tax of ten percent (10%) on their net taxable income as defined in
the National Internal Revenue Code (NIRC) of 1997, as amended by Republic
Act No. 9337: Provided, That the RE Developers shall pass on the savings to
the end-users in the form of lower power rates. cCEAHT
All RE Developers that acquire, operate, and/or administer existing RE

facilities that were or have been in commercial operation for more than seven
(7) years, upon the effectivity of the Act, shall pay a corporate tax rate of 10%
on their net taxable income, upon registration with the DOE.
Towards this end, the ERC shall, in coordination with the DOE,
determine the appropriate mechanism to implement the power rate reduction.
(a) DOE Technical Study — Pursuant to Section 15 (e) of the Act, the
DOE shall conduct a technical study on the appropriate
mechanisms to determine the savings actually realized directly on
account of this incentive.
(b) Scope — The mechanisms shall be applied on RE development
projects and bilateral supply agreements in commercial operation
as of the effectivity of the Act.
(c) Guidelines — In developing the mechanisms to implement the
power rate reduction under the preceding paragraphs, the DOE
shall take into account the following:
(i) preservation of the purpose of Section 15 (e) of the Act;
(ii) non-erosion of the competitive nature of the generation sector
of the electric power industry under Section 6 of the
EPIRA;
(iii) due consideration of the income tax regimes applicable to
different RE Developers under existing or applicable laws,
rules, and government undertakings or obligations under
existing agreements; and ATcaHS
(iv) application of the various forms by which the savings may be

implemented including, but not limited to, value-added
services that reduce the DU's cost of service translating to
lower retail rates and discounts that are required by
regulations of the ERC to be passed through in the retail
rate to end-users.
(d) Determination of Savings — The DOE shall, in coordination with the

NREB, determine as to whether or not savings are actually
realized with respect to each RE Developer. In such case, the
extent thereof shall be determined in accordance with the pass-
on mechanism as may be appropriate based on the results of the
DOE Technical Study. In cases where the RE Developer charges
generation rates that are lower than that of a non-RE facility,
savings are deemed to have been passed on but only to the
extent of the relevant supply contract.
The DOE and the RE Developer may also provide for the appropriate
mechanism in determining the savings in the RE
Service/Operating Contract. The DOE and the NREB shall, where
necessary, coordinate with the ERC for the purpose of
implementing the applicable mechanism.
F. Accelerated Depreciation
If an RE project fails to receive an ITH before full operation, the RE
Developer may apply for accelerated depreciation in its tax books and be
taxed on the basis of the same.
If an RE Developer applies for accelerated depreciation, the project or
its expansions shall no longer be eligible to avail of the ITH.
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 DOF and the
provisions of the NIRC of 1997, as amended. Any of the following methods of
accelerated depreciation may be adopted: SDHTEC
(a) Declining balance method; and

(b) Sum-of-the years digit method.
G. Zero Percent Value-Added Tax Rate
The following transactions/activities 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:
(a) Sale of fuel from RE sources 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;
(b) Purchase of local goods, properties and services needed for the
development, construction, and installation of the plant facilities of
RE Developers; and
(c) Whole process of exploration and development of RE sources up to
its conversion into power, including, but not limited to, the
services performed by subcontractors and/or contractors.
The DOE, BIR and DOF shall, within six (6) months from issuance of
this IRR, formulate the necessary mechanisms/guidelines to implement this
provision.
H. Tax Exemption of Carbon Credits
All proceeds from the sale of carbon emission credits shall be exempt
from any and all taxes.
I. Tax Credit on Domestic Capital Equipment and Services Related to the
Installation of Equipment and Machinery
A tax credit equivalent to one hundred percent (100%) of the value of
the value-added tax (VAT) and customs duties that would have been paid on
the RE machinery, equipment, materials and parts had these items been
imported shall be given to a registered RE Developer who purchases
machinery, equipment, materials, and parts from a domestic manufacturer,
fabricator or supplier subject to the following conditions:
CaSAcH
(a) That the said equipment, machinery, and spare parts are reasonably
needed and shall be used exclusively by the Registered RE
Developer in its registered activity;
(b) That the purchase of such equipment, machinery, and spare parts is
made from an accredited or recognized domestic source, in
which case, prior approval by the DOE should be obtained by the
local manufacturer, fabricator, or supplier; and
(c) That the acquisition of such machinery, equipment, materials, and
parts shall be made within the validity of the RE
Service/Operating Contract.
Within six (6) months from the effectivity of this IRR, the BIR shall, in
coordination with the DOE, promulgate a revenue regulation governing the
granting of tax credit on domestic capital equipment.
Any sale, transfer, assignment, donation, or other mode of disposition
of machinery, equipment, materials, and parts purchased from domestic
source, if made within ten (10) years from the date of acquisition, shall require
prior DOE approval. AaDSTH
SECTION 14. Hybrid and Co-generation Systems. —

The tax exemptions and/or incentives provided for in Section 13 and
item D, Section 17 of this IRR shall be availed of by a registered RE
Developer of hybrid and cogeneration systems utilizing both RE sources and
conventional energy. However, the tax exemptions and incentives for hybrid
and cogeneration systems shall apply only to the equipment, machinery,
and/or devices utilizing RE Resources.
SECTION 15. Incentives for RE Commercialization. —
All manufacturers, fabricators, and suppliers of locally-produced RE
equipment and components shall be entitled to the privileges set forth below:
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
duties and value-added tax (VAT): Provided, That the said components, parts,
and materials are:
(1) Not manufactured domestically in reasonable quantity and quality at
competitive prices;
(2) Directly and actually needed and shall be used exclusively in the
manufacture/fabrication of RE equipment; and
(3) Covered by shipping documents in the name of the duly registered
manufacturer/fabricator to whom the shipment will be directly
delivered by customs authorities.
Prior approval of the DOE shall be required before the importation of
such components, parts and materials.
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 customs 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 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. aHDTAI
C. Income Tax Holiday and Exemption

For seven (7) years starting from the date of recognition/accreditation
provided under Section 18 of this IRR, 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 RE
equipment shall be subject to zero-rated value-added tax on their transactions
with local suppliers of goods, properties, and services.
SECTION 16. Incentives for Farmers Engaged in the Plantation of
Biomass Resources. —
All individuals and entities engaged in the plantation of crops and trees
used as Biomass Resources shall be entitled to duty-free importation and
exemption from payment of value-added tax (VAT) on all types of agricultural
inputs, equipment, and machinery within ten (10) years from the effectivity of
the Act, subject to the certification by the DOE and the following conditions: SIcCTD
(a) That the crops and trees such as, but not limited to, jatropha,
coconut, and sugarcane shall be actually utilized for the
production of Biomass Resources; and
(b) That the agricultural inputs, equipment and machinery such as, but
not limited to, fertilizers, insecticides, pesticides, tractors, trailers,
trucks, farm implements and machinery, harvesters, threshers,
hybrid seeds, genetic materials, sprayers, packaging machinery
and materials, bulk handling facilities, such as conveyors and
mini-loaders, weighing scales, harvesting equipment, and spare
parts of all agricultural equipment shall be used actually and
primarily for the production of said Biomass Resources.
SECTION 17. Other Incentives and Privileges. —
A. Tax Rebate for Purchase of RE Components
To encourage the adoption of RE technologies, the DOF shall, in
consultation with DOST, DOE, and DTI, provide rebates for all or part of the
tax paid for the purchase of RE equipment for residential, industrial, or
community use. For this purpose, the DOF shall, within one (1) year from the
effectivity of the Act, also prescribe the procedure, mechanism, and
appropriate period for granting the tax rebates.
B. Financial Assistance Program
Government financial institutions (GFIs) such as the Development Bank
of the Philippines (DBP), Land Bank of the Philippines (LBP), Philippine Exim
Bank and others shall, in accordance with and to the extent allowed by the
enabling provisions of their respective charters or applicable laws, provide
preferential financial packages for the development, utilization, and
commercialization of RE projects that are duly recommended and endorsed
by the DOE.
The concerned GFIs shall, within six (6) months from the effectivity of
this IRR, formulate programs to implement the provision on the grant of
preferential financial packages for RE projects.
C. Exemption from the Universal Charge
As used in this IRR, "Universal Charge" refers to the charge, if any,
imposed for the recovery of the stranded cost and other purposes pursuant to
Section 34 of Republic Act No. 9136.
All consumers shall be exempted from paying the Universal Charge
under the following circumstances:
(1) If the power or electricity generated through the RE System is
consumed by the generators themselves; and/or
(2) If the power or electricity through the RE System is distributed free
of charge in the off-grid areas.
D. Cash Incentive of Renewable Energy Developers for Missionary
Electrification
An RE Developer registered pursuant to Section 15 of the Act and
Section 18 of this IRR, shall be entitled to a cash generation-based incentive
per kilowatt-hour rate generated, equivalent to fifty percent (50%) of the
universal charge for the power needed to service missionary areas where it
operates the same, to be chargeable against the universal charge for
Missionary Electrification. This provision shall apply to RE capacities for
Missionary Electrification undertaken upon effectivity of the Act.
Within six (6) months from the issuance of this IRR, the ERC shall, in
coordination with the DOE, develop a mechanism to implement the provision
granting cash incentive to RE Developers for Missionary Electrification.
E. Payment of Transmission Charges
A registered RE Developer producing power and electricity from an
intermittent RE Resource may opt to pay the transmission and wheeling
charges of TRANSCO, its concessionaire or its successor-in-interests 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.
F. Priority and Must Dispatch for Intermittent RE Resource
Qualified and registered RE generating units with intermittent RE
Resources shall be considered "must dispatch" based on available energy
and shall enjoy the benefit of priority dispatch.
TRANSCO or its successor-in-interest shall, in consultation with
stakeholders, determine, through technical and economic analysis, the
maximum penetration limit of the intermittent RE-based power plants to the
Grid.
The PEMC and TRANSCO or its successor-in-interest shall implement
technical mitigation and improvements in the system in order to ensure safety
and reliability of electricity transmission.
"RE generating units with intermittent RE Resources" refers to an RE
generating unit or group of units connected to a common connection point
whose RE Resource is location-specific, naturally difficult to precisely predict
the availability of the 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
hydropower, or ocean energy.
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 modified.
SECTION 18. Conditions for Availment of Incentives and Other
Privileges. —
A. Registration/Accreditation with the DOE
For purposes of entitlement to the incentives and privileges under the
Act, existing and new RE Developers, and manufacturers, fabricators, and
suppliers of locally-produced RE equipment shall register with the DOE,
through the Renewable Energy Management Bureau (REMB). The following
certifications shall be issued:cDAISC
(1) DOE Certificate of Registration — issued to an RE Developer

holding a valid RE Service/Operating Contract.
For existing RE projects, the new RE Service/Operating Contract shall
pre-terminate and replace the existing Service Contract that the
RE Developer has executed with the DOE subject to the
Transitory Provision in Rule 13, Section 39.
The DOE Certificate of Registration shall be issued immediately upon
award of an RE Service/Operating Contract covering an existing
or new RE project or upon approval of additional investment.
Any investment added to existing RE projects shall be subject to prior
approval by the DOE.
(2) DOE Certificate of Accreditation — issued to RE manufacturers,
fabricators, and suppliers of locally-produced RE equipment,
upon submission of necessary requirements to be determined by
the DOE, in coordination with the DTI.
B. Registration with the Board of Investments (BOI)
The RE sector is hereby declared a priority investment sector that will
regularly form part of the country's Investment Priority Plan (IPP), unless
declared otherwise by law.
To qualify for the availment of the incentives under Sections 13 and 15
of this IRR, RE Developers, and manufacturers, fabricators, and suppliers of
locally-produced RE equipment, shall register with the BOI.
The registration with the BOI 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 qualified RE facilities. The
applications for registration shall be favorably acted upon immediately by the
BOI, on the basis of the certification issued by the DOE.
SaTAED
C. Certificate of Endorsement by the DOE

RE Developers, and manufacturers, fabricators, and suppliers of locally-
produced RE equipment shall be qualified to avail of the incentives provided
for in the Act only after securing a Certificate of Endorsement from the DOE,
through the REMB, on a per transaction basis.
The DOE, through the REMB, shall issue said certification within fifteen
(15) days upon request of the RE Developer or manufacturer, fabricator, and
supplier; Provided, That the certification issued by the DOE shall be without
prejudice to any further requirements that may be imposed by the government
agencies tasked with the administration of the fiscal incentives mentioned
under Rule 5 of this IRR.
For this purpose, the DOE shall, within six (6) months from the
effectivity of this IRR, issue guidelines on the procedures and requirements
for the availment of incentives based on specific criteria, such as, but not
limited to:
(1) Compliance with Obligations — The RE Developer or
manufacturers, fabricators, and suppliers of locally-produced RE
equipment shall observe and abide by the provisions of the Act,
this IRR, the applicable provisions of existing Philippine laws, and
take adequate measures to ensure that its obligations thereunder
as well as those of its officers are faithfully discharged;
(2) Compliance with Directives — The RE Developer or manufacturers,
fabricators, and suppliers of locally-produced RE equipment shall
comply with the directives and circulars which the DOE may issue
from time to time in pursuance of its powers under the Act; aIcHSC
(3) Compliance with Pre-Registration/Registration Conditions — The

RE Developers or manufacturers, fabricators, and suppliers of
locally-produced RE equipment shall comply with all the pre-
registration and registration conditions as required by the DOE;
(4) Compliance with Reportorial Requirements — An RE Developer
shall maintain distinct and separate books of accounts for its
operations inside the RE facilities and shall submit technical,
financial and other operational reports/documents to DOE on or
before their respective due dates; and
(5) Remittance of Government Shares and Payment of Applicable
Financial Obligations — An RE Developer shall observe timely
remittance of Government Share, and payment of applicable fees
and other financial obligations to the DOE.
RE Developers or manufacturers, fabricators, and suppliers of locally-
produced RE equipment who comply with the above requirements shall be
deemed in good standing and shall therefore be qualified to avail of the
incentives as provided for in the Act and this IRR.
D. Revenue Regulations
Within six (6) months from the effectivity of this IRR, the BIR shall, in
coordination with DOE, DOF, BOC, BOI and other concerned government
agencies, promulgate revenue regulations governing the grant of fiscal
incentives.
PART IV
Regulatory Framework for the Renewable Energy Industry and Government
Share
RULE 6
Regulatory Framework for the Renewable Energy Industry
SECTION 19. Renewable Energy Service/Operating Contract. —
A. State Ownership of All Forces of Potential Energy
All forces of potential energy and other natural resources are owned by
the State and shall not be alienated. These include potential energy sources
such as kinetic energy from water, marine current and wind; thermal energy
from solar, ocean, geothermal and biomass.
B. Parties to a Service/Operating Contract
The exploration, development, production, and utilization of natural
resources shall be under the full control and supervision of the State.
The State may directly undertake such activities, or it may enter into co-
production, joint venture or co-production sharing agreements with Filipino
citizens or corporations or associations at least sixty percent (60%) of whose
capital is owned by Filipinos. Foreign RE Developers may also be allowed to
undertake RE development through an RE Service/Operating Contract with
the government, subject to Article XII, Section 2 of the Philippine
Constitution.ECaAHS
C. Guidelines on Award of RE Service/Operating Contract

In compliance with this Constitutional mandate, the DOE shall, within
one (1) month from the issuance of this IRR, formulate and promulgate the
regulatory framework containing the guidelines governing a transparent and
competitive system of awarding RE Service/Operating Contracts from pre-
development to development/commercial stage, among others.
RE sectors which are developing or utilizing non-naturally occurring
resources such as, but not limited to, biomass, biogas, methane capture, and
other waste-to-energy technologies, shall be covered by an RE Operating
Contract which shall take into consideration the peculiar conditions and
realities attendant to such sector; Provided, That the biomass sector shall be
covered by an RE Operating Contract wherein the biomass developer
commits to develop, construct, install, commission, and operate an RE
generating facility subject to the terms and conditions as specified therein.
D. Compliance with Existing Laws
The regulatory framework for the award of an RE Service/Operating
Contract will take into consideration existing related laws on the exploration,
development and utilization of RE Resources such as:
(1) RA No. 7160, otherwise known as the "Local Government Code", on
the necessity of prior and periodic consultations with the local
government units before any RE exploration activity is conducted
within their respective jurisdictions. Existing projects shall be
considered compliant with this requirement;
(2) RA No. 8371, otherwise known as the "Indigenous Peoples Rights
Act"; and
(3) Existing environmental laws and regulations as prescribed by the
DENR and/or any other concerned government agency, including
compliance with the Environmental Impact Assessment (EIA)
System.
An Environmental Compliance Certificate (ECC) from the appropriate
regional office of the DENR would be sufficient to comply with the Act and this
IRR.
RULE 7
Government Share
SECTION 20. Government Share. —
A. Government Share in General
The Government Share on existing and new RE development projects
shall be equal to one percent (1%) of the gross income of RE Developers
except for indigenous geothermal energy, which shall be at one and a half
percent (1.5%) of gross income of the preceding fiscal year.
For purposes of determining the government share, the gross income of
RE Developers shall include the proceeds resulting from the sale of RE
produced and such other income incidental to and pricing from RE generation,
transmission, and sale of electric power.
As used in this IRR, "Gross Income" derived from business shall be
equivalent to gross sales less sales returns, discounts and allowances, and
cost of goods sold, consistent with Section 27, Paragraph A (7) of the NIRC of
1997, as amended by Republic Act No. 9337.
"Cost of Goods Sold" shall include all business expenses directly
incurred to produce the merchandise to bring them to their present location
and use, consistent with Section 27, Paragraph A (7) of the NIRC of 1997, as
amended by Republic Act No. 9337.
Except for government-owned and controlled corporations, the
Government Share shall be distributed as follows:
(1) National Government — 60%
(2) Local Government — 40%
B. Share from Geothermal Energy Resources
(1) For an integrated geothermal operation, the Government Share of
one and a half percent (1.5%) shall be based on the Gross
Income from the sale of electricity generated from geothermal
energy. The Cost of Goods Sold shall be the direct cost of the
generation of electricity.
(2) For steamfield development and production only, the Government
Share of one and a half percent (1.5%) shall be based on the
Gross Income from the sale of the geothermal steam. The Cost of
Goods Sold shall be the direct cost of the geothermal steam
production. ETHCDS
(3) For geothermal power plant operation only, the Government Share
of one and a half percent (1.5%) shall be based on the Gross
Income from the sale of electricity generated from geothermal
energy. The Cost of Goods Sold shall be the direct cost of
electricity generated from geothermal energy and the direct cost
of the geothermal steam.
C. Local Government Share
In accordance with Section 292 of Republic Act No. 7160, the allocation
and distribution of the local government share shall be as follows:
(1) Where the natural resources are located in the province:
(i) Province — Twenty percent (20%);
(ii) Component city/municipality — Forty-five percent (45%); and
(iii) Barangay — Thirty-five percent (35%).
(2) Where the natural resources are located in two (2)
or more provinces, or in two (2) or more component cities or
municipalities or in two (2) or more Barangays, their respective
shares shall be computed on the basis of:
(i) Population — Seventy percent (70%); and
(ii) Land area — Thirty percent (30%).
(3) Where the natural resources are located in a highly urbanized or
independent component city:
(i) City — Sixty-five percent (65%); and
(ii) Barangay — Thirty-five percent (35%).
(4) Where the natural resources are located in such two (2)
or more cities, the allocation of shares shall be based on the
formula on population and land area as specified in paragraph (2)
of this Section. DaTEIc
D. Remittance of the Share of Local Government Units

In accordance with Sections 286 and 293 of Republic Act No. 7160, as
amended, the share of local government units from the utilization and
development of national wealth shall be released, without need of any further
action, directly to the provincial, city, municipal or barangay treasurer, as the
case may be, on a quarterly basis within five (5) days after the end of each
quarter, and which shall not be subject to any lien or holdback that may be
imposed by the National Government for whatever purpose.
E. Exceptions on Government Share
No government share shall be collected from the following:
(1) Proceeds from the development of Biomass Resources; and
(2) Proceeds of micro-scale projects for communal purposes and non-
commercial operations, such as community-based RE projects,
which are not greater than one hundred kilowatts (100kW).
SECTION 21. RE Host Communities/LGUs. —
A. Determination of RE Host Communities/LGUs
The LGUs hosting the energy resource and/or energy generating facility
shall have an equitable share in the proceeds derived from the development
and utilization of energy resource and sale of electric power. For the purposes
of this IRR, Host LGU shall refer to the following:
(1) With respect to integrated energy generating facilities, the host LGU
is where the energy-generating facilities and energy resources
are located. The LGU shall be entitled to a share based on the
sale of electric power,CDcHSa
(2) With respect to energy resources, the host LGU is where the
renewable energy resources are located as delineated by
geophysical and exploration surveys. The LGU shall be entitled to
a share based on the sale of renewable energy produced by the
RE Developer; and
(3) With respect to non-integrated generating facilities, the host LGU is
where the energy generating facility is located. The LGU shall be
entitled to a share based on the sale of electric power of the
generating facility.
B. Incentives to RE Host Communities/LGUs
Based on Sections 289 to 294 of Republic Act No. 7160, the
benefits/incentives provided herein, shall be allocated to the Host LGUs
defined in the preceding paragraph as follows:
(1) Eighty percent (80%) of the local government share 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 does not exceed
one hundred kilowatt-hours (100kWh); Provided, That excess
funds shall, after serving the end-users referred to in the
preceding paragraph, be used to subsidize the electricity
consumption of consumers of the same class in the host city,
municipality or the province, as the case may be;
(2) The subsidy may be in the form of rebates, refunds, and/or any
other form as may be determined by the DOE, DOF, and ERC, in
coordination with the NREB within six (6) months from the
effectivity of the Act, the DOE, DOF, and ERC shall, in
coordination with the NREB and in consultation with the DUs,
promulgate the mechanisms to implement this provision; and IDEHCa
(3) Twenty percent (20%) of the local government share shall be utilized
to finance local government and livelihood projects which shall be
appropriated by their respective Sanggunian, pursuant to Section
294 of Republic Act No. 7160.
PART V
Organization and Renewable Energy Trust Fund
RULE 8
The Role of the Department of Energy
SECTION 22. Lead Agency. —
The DOE shall be the lead agency mandated to implement the
provisions of the Act and this IRR. In pursuance thereof and in addition to its
functions provided for under existing laws, the DOE shall:
(a) Promulgate the RPS Rules;
(b) Establish the REM and direct the PEMC to implement changes in
order to incorporate the rules specific to the operation of the REM
under the WESM;
(c) Supervise the establishment of the RE Registrar by the PEMC;
(d) Promulgate the appropriate implementing rules and regulations
necessary to achieve the objectives of the Green Energy Option
program;
(e) Determine the minimum percentage of generation which may be
sourced from available RE Resources of the NPC-SPUG or its
successors-in-interest and/or qualified third parties in off-grid
areas;
(f) Issue certification to RE Developers, local manufacturers, fabricators,
and suppliers of locally-produced RE equipment to serve as basis
for their entitlement to incentives, as provided for in the Act;
IaEASH
(g) Formulate and implement the NREP together with relevant

government agencies;
(h) Administer the Renewable Energy Trust Fund (RETF) as a special
account in any of the government financial institutions identified
under Section 29 of the Act;
(i) Recommend and endorse RE projects applying for financial
assistance with government financial institutions pursuant to
Section 29 of the Act;
(j) Encourage the adoption of waste-to-energy technologies pursuant to
Section 30 of the Act;
(k) Determine the mechanisms in the grant of subsidy to electric
consumers of Host LGUs, together with DOF, ERC, and NREB;
and
(l) Perform such other functions as may be necessary, to attain the
RULE 9
National Renewable Energy Board
SECTION 23. Creation of the NREB. —
Pursuant to Section 27 of the Act, the National Renewable Energy
Board (NREB) is created and 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. AHDacC
The members of the Board and their alternates must be of proven

integrity and probity, with a working knowledge and understanding of the RE
industry, and occupying the position of at least Director and Manager for
government agencies and private entities, respectively.
The NREB shall act as a collegial body primarily tasked with
recommending policies to the DOE and monitoring the implementation of the
Act. As such, its private sector members shall not be required to divest.
However, to avoid conflict of interest, the NREB shall adopt its own Code of
Ethics that shall be observed by all its members.
SECTION 24. Meetings of the NREB. —
Regular meetings of the NREB shall be held at least once every quarter
on a date and in a place fixed by the Board. Special meetings may also be
called by the Chairman or by a majority vote of the Board, as necessary.
Representatives of other government agencies and private entities such
as, but not limited to, the Department of Science and Technology (DOST),
Department of Agriculture (DA), National Water Resources Board (NWRB),
National Commission for Indigenous Peoples (NCIP), National Electrification
Administration (NEA), National Research Council of the Philippines (NRCP),
and the academe may be invited by the NREB as resource persons.
SECTION 25. Remuneration. —
The NREB shall determine the appropriate compensation/remuneration
of its members in accordance with existing laws, rules and regulations, and
shall make the necessary requests and representations with the Department
of Budget and Management (DBM) for the allocation and appropriation of
funds necessary to effectively perform its duties and functions.
SECTION 26. Technical Secretariat. —
The NREB shall be assisted by a Technical Secretariat from the REMB.
The Technical Secretariat shall report directly to the Office 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 REMB shall be
determined by the Board, subject to existing civil service rules and regulations
and approval by the DBM for the allocation and appropriation of funds
necessary to effectively perform its duties and functions.
SECTION 27. Powers and Functions. —
The NREB shall have the following powers and functions:
(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 specific actions to facilitate the implementation of the
NREP to be executed by the DOE and/or 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 (RETF) established pursuant to Section 28 of the Act and
administered by the DOE;
(e) Cause the establishment of a one-stop shop facilitation scheme to
accelerate implementation of RE projects; and
(f) Perform such other functions, as may be necessary, to attain the
RULE 10
Renewable Energy Management Bureau
SECTION 28. Creation of the REMB. —
To effectively implement the provisions of the Act, a Renewable Energy
Management Bureau (REMB) shall be established under the DOE pursuant to
Section 32 of the Act.
To facilitate the application for registration/accreditation of RE
Developers, REMB Desks shall be created in the field offices of the DOE in
Luzon, Visayas, and Mindanao, pursuant to Section 2 (a) and (b) of the
Act.AScTaD
The existing plantilla of the Renewable Energy Management Division

(REMD) of the Energy Utilization Management Bureau (EUMB) of the DOE
shall form the nucleus of REMB to perform the duties, functions, and
responsibilities of the said bureau. For this purpose, the existing REMD is
hereby dissolved.
SECTION 29. Organizational Structure. —
Within six (6) months from effectivity of this IRR, the DOE through the
Office of the Secretary shall determine the REMB organizational structure and
staffing pattern/staffing complement, in consultation with the DBM, and
subject to existing civil service rules and regulations.
SECTION 30. Budget. —
The funds necessary for the creation of the REMB shall be taken from
the current appropriations of the DOE. Thereafter, the budget for the REMB
shall be included in the annual General Appropriations Act (GAA).
SECTION 31. Powers and Functions of the REMB. —
The REMB shall have the following powers and functions:
(a) Develop, formulate and implement policies, plans and programs
such as the NREP, to accelerate the development,
transformation, utilization, and commercialization of RE
Resources and technologies; HICSaD
(b) Develop and maintain a comprehensive, centralized and unified

data and information base on RE Resources to ensure the
efficient evaluation, analysis, and dissemination of data and
information on RE Resources, development, utilization, demand,
and technology application;
(c) Promote the commercialization/application of RE Resources
including new and emerging technologies for the efficient and
economical transformation, conversion, processing, marketing
and distribution to end-users;
(d) Conduct technical research, socio-economic, and environmental
impact studies of RE projects for the development of sustainable
RE Systems;
(e) Continue to strengthen the Affiliated Renewable Energy Centers
(ARECs) nationwide;
(f) Create a unified database of RE projects for monitoring and planning
purposes;
(g) Supervise and monitor activities of government and private
companies and entities on RE Resources development and
utilization to ensure compliance with existing rules, regulations,
guidelines and standards; DHSCTI
(h) Provide information, consultation, technical training, and advisory

services to RE Developers, practitioners, and entities involved in
RE technology, and formulate RE technology development
strategies including, but not limited to, standards and guidelines;
(i) Develop and implement an information, education, and
communication (IEC) program to heighten awareness of and
appreciation by all stakeholders of the RE industry;
(j) Evaluate, process, approve and issue RE Service/Operating
Contracts, permits, certifications, and/or accreditations as
provided for in the Act and this IRR;
(k) Monitor and evaluate the implementation of the NREP to determine
the need to expand the same; and
(l) Perform other functions that may be necessary for the effective
implementation of the Act and the accelerated development and
utilization of the RE Resources in the country.
RULE 11
Renewable Energy Trust Fund
SECTION 32. Exclusive Fund Administration. —
Pursuant to Section 28 of the Act, the RETF 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 used exclusively to:
(a) Finance the research, development, demonstration, and promotion
of the widespread and productive use of RE Systems for Power
and Non-Power Applications;
(b) Provide funding to qualified 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; CacISA
(c) 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;
(d) Conduct nationwide resource and market assessment studies for
the Power and Non-Power Applications of RE Systems;
(e) Propagate RE knowledge by accrediting, tapping, training, and
providing benefits to institutions, entities, and organizations which
can help widen the promotion and reach of RE benefits at the
national and local levels; and
(f) Fund such other activities necessary or incidental to the attainment
of the objectives of the Act.
SECTION 33. Fund Utilization. —
The funds may be used through grants, loans, equity investments, loan
guarantees, insurance, counterpart fund or such other financial arrangements
necessary for the attainment of the objectives of the Act: Provided, That the
use or allocation thereof shall be, as far as practicable, done through a
competitive and transparent manner.
SECTION 34. Sources of Funds. —
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 (PCSO);
(c) One and a half percent (1.5%) of the net annual income of the
Philippine Amusement and Gaming Corporation (PAGCOR); AEIDTc
(d) One and a half percent (1.5%) of the net annual dividends remitted
to the National Treasury by the Philippine National Oil Company
(PNOC) 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 NIRC. To ensure
this goal, the 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-RE Resources;
(g) Any revenue generated from the utilization of the RETF; and
(h) Proceeds from fines and penalties imposed under the Act.
For this purpose, the DOE, PCSO, PAGCOR, DENR, and DBM shall,
within six (6) months from the approval of this IRR, formulate the necessary
mechanism for the transmittal of the Fund to the DOE.
Furthermore, the DOE shall, within six (6) months from the approval of
this IRR, formulate the guidelines to ensure the competitive and transparent
utilization of the fund.
PART VI
Prohibited Acts, Penal, and Administrative Provisions
RULE 12
Prohibited Acts and Sanctions
SECTION 35. Prohibited Acts. —
Pursuant to Section 35 of the Act, any person or entity found in violation
of any of the following shall be subject to the appropriate criminal, civil, and/or
administrative sanctions as provided in this IRR and other existing applicable
laws, rules and regulations:
(a) Non-compliance with or violation of the RPS rules;
(b) Willful refusal to undertake Net-Metering arrangements with qualified
distribution grid users;
(c) Falsification or tampering of public documents or official records to
avail of the fiscal and non-fiscal incentives provided under the
Act;
(d) Failure and willful refusal to issue the certificate referred to in
Section 26 of the Act; and
(e) Non-compliance with the established guidelines that the DOE
adopted for the implementation of the Act.
SECTION 36. Administrative Liability. —
Without prejudice to incurring criminal liability, any person who willfully
commits any of the prohibited acts and violates other issuances relative to the
implementation of the Act shall be subject to the following administrative fines
and penalties:
(a) The DOE may impose a penalty ranging from Reprimand to
Revocation of License with corresponding fine ranging from a
minimum of One Hundred Thousand Pesos (P100,000.00) to
Five Hundred Thousand Pesos (P500,000.00) depending on the
gravity for the following offenses:
(1) Non-compliance or violation of the RPS rules;
(2) Willful refusal to undertake Net-Metering arrangements with
qualified distribution grid users; and
(3) Non-compliance with the established guidelines that the DOE
adopted for the implementation of the Act.
(b) The DOE may revoke the license, permit, certification, endorsement
or accreditation, terminate RE Service/Operating Contract and/or
impose a fine ranging from a minimum of One Hundred
Thousand Pesos (P100,000.00) to Five Hundred Thousand
Pesos (P500,000.00) on any person or entity found to have
committed the falsification or tampering of public documents or
official records to avail of the fiscal and non-fiscal incentives,
pursuant to Section 35 (c) of the 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.
Any employee of the DOE who shall fail or willfully refuse to issue the
certificate pursuant to Section 26 of the Act shall be given a warning for the
first offense, and meted the penalty of reprimand for the second offense, and
suspension for the third offense.
SECTION 37. Administrative Procedures. —
The DOE may initiate, motu proprio or upon filing of any complaint, an
administrative proceeding against any person or entity who commits any of
the prohibited acts under Section 35 of the Act, Section 35 of the IRR, or other
related issuances. In the exercise thereof, the DOE may commence such
hearing or inquiry by an order to show cause, setting forth the grounds for
such order.
The administrative proceedings will be conducted to determine
culpability of offenders and the applicable penalties in accordance with
existing "Rules and Procedures Before the DOE".
Administrative actions initiated pursuant to this section shall be
separate and independent from any criminal actions that may arise for
violations of the Act.
SECTION 38. Criminal Liability. —
In accordance with Section 36 of the Act, 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 officer, chief
executive officer, directors or officers responsible for the violation.
The perpetrators of any of the prohibited acts provided for under
Section 35 of the Act, upon conviction thereof, shall suffer the penalty of
imprisonment of from one (1) year to five (5) years, or a fine 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.
PART VII
Final Provisions
RULE 13
Transitory and Other Provisions
SECTION 39. Transitory Provisions. —
Benefits or incentives extended to RE Developers, and manufacturers,
fabricators, and suppliers of locally-produced RE equipment under existing
laws not amended or withdrawn under this Act shall remain in full force and
effect. No provision of the Act shall be taken as to diminish any right vested by
virtue of existing laws, contracts, or agreements. However, in order to qualify
for the availment of the incentives provided under Chapter VII of the Act and
this IRR, the RE Developer, and manufacturers, fabricators, and suppliers of
locally-produced RE equipment shall be required to secure a certificate of
registration or accreditation with the DOE.
The fiscal incentives granted under Section 15 of the Act shall apply to
all RE capacities upon the effectivity of the Act.
Pending the issuance of other necessary guidelines, the grant of
provisional certificates of registration by the DOE shall be valid and effective.
SECTION 40. Reportorial Requirements. —
The DOE shall, in coordination with the NREB, submit a yearly report
on the implementation of the Act to the Philippine Congress, through the Joint
Congressional Power Commission (JCPC), every January of each year
following the period in review, indicating among others, the progress of RE
development in the country and the benefits and impact generated by the
development and utilization of renewable energy resources in the context of
energy security and climate change imperatives. cDIHES
This shall serve as basis for the JCPC's review of the incentives as
provided for in the Act towards ensuring the full development of the country's
RE capacities under a rationalized market and incentives scheme.
SECTION 41. Congressional Oversight. —
Upon the effectivity of the Act, the JCPC, created under Section 62 of
Republic Act No. 9136, shall exercise oversight powers over the
implementation of the Act.
SECTION 42. Appropriations. —
Funds necessary to finance the activities of concerned government
agencies, as provided in the Act and this IRR, shall be included in the annual
General Appropriations Act.
SECTION 43. Separability Clause. —
If any provision of this IRR is declared unconstitutional, the remainder of
the Act or the provision not otherwise affected, shall remain valid and
subsisting. HDTcEI
SECTION 44. 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 the Act and this IRR is hereby repealed, modified, or amended
accordingly.
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.
SECTION 45. Effectivity. —
This IRR shall take effect fifteen (15) days after its publication in at least
two (2) newspapers of general circulation.
Signed this 25th of May 2009 at the Department of Energy, Energy
Center, Merritt Road, Fort Bonifacio, Taguig City, Metro Manila.
(SGD.) ANGELO T. REYES

Secretary

Republic Act No. 9513

Uploaded by

Copyright:

Available Formats

Republic Act No. 9513

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Republic Act No. 9513

Uploaded by

Copyright:

Available Formats

Republic of the Philippines

Congress of the Philippines

Republic of the Philippines

DEPARTMENT CIRCULAR No. ______

RULES AND REGULATIONS IMPLEMENTING THE

REPUBLIC ACT No. 9513

Pursuant to Section 33 of Republic Act No. 9513, otherwise known as The

The scope of this IRR shall be as follows:

b. It shall cover renewable energy developers which may be individual or

c. It shall establish the framework for the accelerated sustainable

d. Further, it shall clarify specific provisions of the Act and the

Rule 2. Declaration of Policies - It is hereby declared the policy of the State

a. Accelerate the exploration and development of renewable energy

b. Increase the utilization of renewable energy by institutionalizing the

c. Encourage the sustainable development and utilization of renewable

d. Establish the necessary infrastructure and mechanism to carry out the

Rule 3. Definition of Terms - As used in these rules, the following terms

a. “Biomass energy systems” refer to energy systems which use biomass

b. “Biomass resources” refer to non-fossilized, biodegradable organic

c. “Board of Investments” (BOI) refers to an attached agency of the

d. “Co-generation systems” refer to facilities which produce electrical and/or

f. “Department of Energy” (DOE) refers to the government agency created

g. “Department of Environment and Natural Resources” (DENR) refers to the

i. “Department of Science and Technology” (DOST) refers to the government

j. “Department of Trade and Industry” (DTI) refers to the government

k. “Distributed generation” refers to a system of small generation entities

l. “Distribution of Electricity” refers to the conveyance of electricity by a

m. “Distribution Utility” refers to any electric cooperative, private

o. “Energy Regulatory Commission” (ERC) refers to the independent quasi-

The Private Sector, Miramar Hotel in Manila, Feb. 25 to 26, 2009

p. “Generation Company” refers to any person or entity authorized by the

q. “Generation Facility” refers to a facility for the production of electricity

s. “Geothermal Energy Systems” refer to machines or other equipment that

t. “Geothermal Resources” refers to mineral resources, classified as

artificially introduced into geothermal formations; (iii) heat or associated

u. “Government Share” refers to the amount due the National Government

v. “Green Energy Option” refers to the mechanism to empower end-users to

w. “Grid” refers to the high voltage backbone system of interconnected

x. “Gross Income” derived from business shall be equivalent to gross sales

y. “Hybrid Systems” refer to any power or energy generation facility which

z. “Hydroelectric Power Systems or Hydropower Systems” refer to water-

aa. “Hydroelectric Power Development or Hydropower Development” refers

bb. “Hydroelectric Power Resources or Hydropower Resources” refer to water

The Private Sector, Miramar Hotel in Manila, Feb. 25 to 26, 2009

dd. “Micro-scale Project” refers to an RE project with capacity not exceeding

ee. “Missionary Electrification” refers to the provision of basic electricity

gg. “National Power Corporation” (NPC) refers to the government

hh. “National Transmission Corporation” (TRANSCO) refers to the

ii. “Net Metering” refers to a system, appropriate for distributed generation,

jj. “Non-power applications” refer to renewable energy systems or facilities

mm. “On-Grid System” refers to electrical systems composed of

nn. “Philippine Electricity Market Corporation” (PEMC) refers to the

oo. “Philippine National Oil Company” (PNOC) refers to the government

pp. “Power applications” refer to renewable energy systems or facilities that

qq. “Registered RE Developer” refers to a RE Developer duly registered with

rr. “Renewable Energy (Systems) Developers or RE Developers” refer to

The Private Sector, Miramar Hotel in Manila, Feb. 25 to 26, 2009

tt. “Renewable Energy Policy Framework” (REPF) refers to the long-term

uu. “Renewable Portfolio Standards” refer to a market-based policy that