Solar PV Guidebook Philippines

1 Solar PV Guidebook Philippines Legal and administrative requirements for the development and connection of on-grid Solar PV projects in the Philippines Imprint This publication is by the Deutsche Gesellschaft f r Internationale Zusammenarbeit (GIZ) GmbH through the Support to the Climate Change Commission in the Implementation of the National Framework Strategy on Climate Change and the National Climate Change Action Plan Project (SupportCCC), funded by the German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB) under its International Climate Initiative. BMUB supports this initiative based on a decision of the German Parliament. For more information, see As a federally owned enterprise, GIZ supports the German Government in achieving its objectives in the field of international cooperation for sustainable development.

2 Statements from named contributors do not necessarily reflect the views of the publisher. This Guidebook does in no sense claim to be complete or error free. Neither GIZ nor the authors will accept any liability for any kind of damage or loss that might occur to anybody from referring to this Guidebook . Published by Deutsche Gesellschaft f r Internationale Zusammenarbeit (GIZ) GmbH. Registered offices Bonn and Eschborn, Germany 9th Floor PDCP Bank Centre Rufino corner Leviste Streets Salcedo Village Makati City 1227 Philippimes Responsible Mr. Mario C. Marasigan Director Renewable energy Management Bureau Department of energy T: +63 2 840 2268. E: Dr. Bernd-Markus Liss Principal Advisor Support to the Climate Change Commission in the Implementation of the National Framework Strategy on Climate Change and the National Climate Change Action Plan Project T: +63 2 651 5140.

3 E: Authors Jose Edmundo Fajardo, Marilou Ruales, Bruno Wilhelm - Integration Consulting Group Editors Hendrik Meller and F. Mara Mendoza Photo Credits / Sources The photos in this publication are owned by GIZ unless otherwise indicated in the photo. Layout / Design F. Mara Mendoza Printed and distributed by Deutsche Gesellschaft f r Internationale Zusammenarbeit (GIZ) GmbH. Place and date of publication Manila, Philippines August 2014. Citation Fajardo, Jose Edmundo; Ruales, Marilou; Wilhelm, Bruno. 2014: Solar PV Guidebook Philippines : Legal and Administrative Requirements for the Development and Connection of On-grid Solar PV Projects in the Philippines . Manila, Philippines : Deutsche Gesellschaft f r Internationale Zusammenarbeit (GIZ) GmbH.

4 Solar PV Guidebook Philippines Legal and administrative requirements for the development and connection of on-grid Solar PV projects in the Philippines Contents Abbreviations 6. Clarifications 8. Preface from the Department of energy 9. Preface from the Deutsche Gesellschaft f r Internationale Zusammenarbeit (GIZ) GmbH 10. 1 Introduction 11. 2 Business models for on-grid SPV projects 13. Projects availing the feed-in tariff (FIT) 13. Power supply agreements with distribution utilities in on-grid areas (PSA) 15. Net-metering projects 15. Power supply agreements with commercial bulk consumers (B2B) 16. 3 Administrative milestones for the development and implementation of on-grid SPV projects 17.

5 Phases in the development of FIT, PSA and B2B projects 17. Permitting procedure for net-metering projects 18. Comparative overview 20. 4 Administrative milestones for the financing of on-grid SPV projects in the Philippines 21. Exemplary overview of bank procedures aligned with DOE procedures 21. Specific milestones 22. 5 Detailed description of milestones for on-grid SPV project development and implementation 23. 6 Conclusions and recommendations 57. Annex: List of legal documents referred to in the Guidebook 59. Abbreviations ACE ASEAN Centre for energy ADSDPP Ancestral Domain Sustainable Development and Protection Plan BIR Bureau of Internal Revenue BMUB German Federal Ministry for Environment, Nature Conservation.

6 Building and Nuclear Safety BOI Board of Investments B2B Business-to-business CAPEX Capital expenditures CBRED Capacity Building to Remove Barriers to Renewable energy Development CENRO Community Environment and Natural Resources Office CFEI Certificate of Electrical Inspection CNC Certificate of Non-Coverage CNO Certificate of Non-Overlap CoC Certificate of Compliance COC Confirmation of Commerciality COE Certificate of Endorsement CP Certificate of Pre-Condition CPDO City Planning and Development Office CSP Competitive selection process DAR Department of Agrarian Reform DAS Distribution Assets Study DC Department Circular DENR Department of Environment and Natural Resources DIS Distribution impact study DOE Department of energy DSOAR Distribution Services and Open Access Rules DTI Department of Trade and Industry DU Distribution utility ECA Environmentally critical area ECC Environmental Compliance Certificate ECP Environmentally critical project EIA Environmental Impact Assessment EIS Environmental Impact Statement EMB Environmental Management Bureau EPIRA Electric Power Industry Reform Act of 2001.

7 ERC energy Regulatory Commission FBI Field-based investigation FIT Feed-in tariff FLAg Forest Land Use Agreement FMB Forest Management Bureau FPIC Free and Prior Informed Consent GIZ Deutsche Gesellschaft f r Internationale Zusammenarbeit GmbH. GSIS Government Service Insurance System HLURB Housing and Land Use Regulatory Board ICC Indigenous cultural community IMEM Interim Mindanao Electricity Market IP Indigenous people IRR Implementing Rules and Regulations LBP Land Bank of the Philippines LGU Local government unit 6 Solar PV Guidebook Philippines LLDA Laguna Lake Development Authority LMMD Licensing and Market Monitoring Division LUC Land Use Conversion MARO Municipal Agrarian Reform Office MEOT Minimum energy off-take MERALCO Manila Electric Company MIRF Metering Installation Registration Form MOA Memorandum of Agreement MSG Metering Service Group MTD Maintenance and Testing Division MWp Megawatt peak (unit)

8 Of measurement for installed capacity of SPV plants). NIA National Irrigation Administration NCIP National Commission on Indigenous Peoples NGCP National Grid Corporation of the Philippines NPC National Power Corporation NPP New power producer NREB National Renewable energy Board OATS Open Access Transmission Service OCT Original Certificate of Titles O&M Operation & Maintenance OSEC Office of the Secretary of DOE. PARO Provincial Agrarian Reform Officer PCA philippine Coconut Authority PEMAPS Project Environmental Monitoring System and Audit Prioritization Scheme PEMC philippine Electricity Market Corporation PERD Project Evaluation and Registration Department PHP philippine Peso PSA Power Supply Agreement (here referring only to PSAs with DUs in on- grid areas).

9 PSE philippine Stock Exchange PV Photovoltaic QE Qualified end user RCOA Retail competition and open access RA Republic Act RE Renewable energy REMB Renewable energy Management Bureau REPA Renewable energy Payment Agreement RESC Renewable energy Service Contract RESP Renewable energy Support Program RRT Regional Review Team SCADA Supervisory Control and Data Acquisition SESC Solar energy Service Contract Sec. Section SLUP Special Land Use Agreement SO System Operator SPA Special Power of Attorney SPUG Small Power Utilities Group SPV Solar photovoltaic SRA Sugar Regulatory Administration TCT Transfer Certificate of Titles TRANSCO National Transmission Corporation TSA Transmission Service Agreement VAT Value Added Tax WESM Wholesale Electricity Spot Market Solar PV Guidebook Philippines 7.

10 Clarifications This Guidebook addresses project developers and investors in the field of on-grid Solar photovoltaic (SPV) projects in the Philippines . It intends to provide them with a clear overview of major legal and administrative requirements they have to comply with when developing and implementing on-grid SPV projects in the Philippines under the provisions made in Sections 7, 9 and 10 of the Renewable energy Act of 2008 (RE Act, also known as Republic Act 9513, RA 9513) in order to avail the incentives defined in Chapter VII of the RE Act. According to the terminology used in the Philippines , only those SPV installations are on-grid, which are connected to the national high-voltage backbone system of interconnected transmission lines, substations and related facilities.