Taxes on imported equipment threatens energy transition agenda

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Taxes on imported equipment threatens energy transition agenda

The Ghana Chamber of Mines has identified taxes on equipment imported for the use of renewable energy projects as a threat to the government’s energy transition agenda.

The chamber is of the view that these taxes were a disincentive for private companies who wish to switch to renewable energy.

Speaking to the media after the inauguration of the Chamber’s 84 kilowatts Solar PV system, its Chief Executive Officer, Sulemanu Koney urged the government to revoke all taxes on equipment imported for the use of renewable energy projects.

He said the high taxes on the equipment had become a disincentive to the private sector, hence the inability of many to transition to the use of green energy.

Mr Koney said nearly 11 per cent the contract cost of its solar system represented statutory taxes and levies, which was a disincentive to the government’s energy transition agenda.

“You may be aware that the government of Ghana is fully aligned on the global initiative to transition to clean and sustainable energy. However, the ecosystem that is required to encourage households and firms to invest in clean energy is still in an inchoate stage”.

“While the government has exempted imported solar panels from VAT [Value Added Tax] and other levies, the payments for a completed project are still subject to these statutory taxes and levies,” he stated.

He said the absence of a net metering system implies that a consumer would be subsidising the operational cost of the Electricity Company of Ghana anytime the solar plant feeds its excess generation beyond its demand into the national grid.

Switch to solar

The Ghana Chamber of Mines has officially switched to solar power in a bid to join the campaign of transitioning to renewable energy, that is the  chamber’s  Accra secretariat is now relying on solar as its main source of power thereby lessening the pressure on the national grid.

At a total cost of US$122,316.35, the solar system was designed and constructed  to meet the secretariat’s electricity requirements with an installed capacity of 84kWp, and a peak performance of 111,000 kWh, this has reduced the Chamber’s consumption of electricity from the national grid by nearly 75 per cent with a warranty period of 10 years and a performance period of twenty-five (25) years.

Clean energy

For his part, the First Vice President of the Chamber, George Nutor, said the need for the industry to move to clean energy had never been more apparent than in these times of climate change effects.

He said the effects of extreme weather conditions amidst unexpected rain patterns have shown the need for the industry to pay critical attention to issues of clean energy and sustainability.

“Rising commodity, energy, and shipping prices have increased the cost of producing and transporting solar photovoltaic modules, wind turbines and biofuels worldwide, adding uncertainty to a development trajectory that is already far below the Goal 7 ambitions.

“Therefore, achieving energy and climate goals will require continued policy support and a massive mobilization of public and private capital for clean and renewable energy, especially in our beloved country Ghana,” he stated.

Source: Graphiconline