20091228
allafrica

The Ministry of Finance and Economic Development (MoFED) lifted duty fees from the importation of solar energy equipment beginning December 14, 2009.

This was an unprecedented, positive step in support of clean solar energy after it was dropped from the Ethiopian Energy Agency's (EEA) second draft of a bill that would allow private entities to sell power they produced from certain renewable sources to the Ethiopian Electric Power Cooperation (EEPCo) at specified rates.

The duty-free items include solar panels, and certain types of batteries, lamps, invertors, and regulators used in solar setups, according to Wasihun Abate, head of the legal department at MoFED.

"The ministry then sent a letter to the Ministry of Mines and Energy (MoME), the Ethiopian Energy Agency (EEA), and the Ethiopian Revenue and Customs Authority on December 14, notifying them that the lift had become effective as of the same day," Wasihun told Fortune. The duty was dropped so that importers could offer the products to buyers at more affordable prices, he said.

The duty-free measure should benefit rural communities who do not have access to the national grid, according to Dereje Walelign, chairman of the Solar Energy Society - Ethiopia, which is awaiting registration. He welcomed the decision as support for access to solar equipment which is safer, healthier and in some cases more practical than other means of electricity generation for homes and small businesses.

"The decision will help the private sector ease access to individual consumers," he said.

He was astonished that while MoFED was lifting duty from solar-related equipment, the EEA had excluded it from the draft feed-in-tariff bill. This bill would have allowed the private sector to engage in small-scale electricity production for the national grid, selling it to EEPCo as is currently done in some countries.

An official at the agency admitted that solar energy, which was incorporated in the first draft, had been entirely excluded from the second draft because stakeholders in the solar energy business complained about the low tariff level, in comparison to other energy sources, listed in the first draft. Solar energy may find a place in the third draft after more comments have been received, but he did not explain why the process is moving forward in this manner. The official requested anonymity saying that he was not authorised to comment on bills in the drafting process.

The Solar Energy Society is working with pubic and private institutions to ensure that solar energy finds its way back into the bill, he said.

The bill is expected to be presented to the house during the current fiscal year for ratification.