KAIETEUR NEWS – The Guyana Government has, with effect from March 1, 2021, put in place a financial incentive for the renewable energy industry and has since exempted items to be used in the business, from the payment of any Value Added Tax (VAT).
The Order giving effect to the government inducement was made under the Value Added Tax Act, which restructured the schedules for goods and services that have either been zero rated or exempted all together. The provisions of the Order were signed off by Substantive Minister with responsibility for the Finance Portfolio in the Office of the President, Dr. Ashni Singh.
According to the notice—since published in the Official Gazette and subsequently in sections of the daily newspapers—exempted from VAT payments are machinery and equipment obtained for the generating and utilising of electricity from renewable energy sources. The Order noted that these include solar panels, solar lamps, deep cycle batteries, solar generators, solar cookers, solar water-heaters, solar refrigerators and freezers, solar powered air-conditioners and inverters.
These, in addition to water turbines, wind turbines and energy efficient lighting, including compact fluorescent lamps and light emitting diodes (LED). Additionally, the supply of machinery and equipment for utilising alternate energy technologies and renewable energy options, such as gasifiers to use biomass and harnessing renewable energy through wind, solar and water, as determined by the Commissioner, were also exempted from VAT payments.
The notice of exemption of VAT comes amidst the Guyana Energy Agency’s (GEA) active drive towards the establishment of a domestic energy mix to be developed over the next five years of some 400 mega watts (MW) of installed generation capacity in the country. This is the direction of Guyana’s key energy agency, which falls under the portfolio of the Prime Minister and President.
According to GEA Head, Dr. Mahender Sharma, overall strategy for the agency is rooted in the charge delivered to the opening of the 12th Parliament by the President, Dr. Irfaan Ali, which summarises the thrust of the GEA’s energy policy going forward. He reminded of Dr. Ali’s exhortations that “Guyana’s energy security will be driven by an energy mix that will see solar, wind, hydro, and natural gas, all being key components in making us the energy capital of the region.”
According to Dr. Sharma, included in the specific targets, as articulated by the Prime Minister’s Office, is “development of a world class energy mix, and installation of 400MW of new installed capacity inclusive of hydropower, solar, wind and natural gas.” He noted that natural gas has been factored in to supply some 200MW of the proposed 400MW installed capacity, in the interim only.
Notably the notice comes in wake of the GEA inviting interested companies to bid for the design and installation of a number of mini grid solar systems, and electrical distribution networks. According to the invitation to bid put out by the GEA, the entity is looking for eligible bidders for a 171 kilowatt per hour (kWp) photovoltaic system set up in St. Monica, Region Two. In a separate invitation, the company said it is looking to have a similar installation at the Capoey Mission for some 171 kilowatts per hour while another facility is envisioned at 39.5 kWp for Capoey Lake Top.
Additionally, GEA in recently advertised invitations, had called for companies to provide services for the design, supply, installation and commissioning of a 153 kWp off-grid solar photovoltaic micro-grid system and electrical distribution network in the Mainstay-Whyaka and St. Deny’s Tapakuma communities. The entity has also invited companies to submit their bids for the design, supply, installation and commissioning of a 244 kWp off-grid solar photovoltaic micro-grid system and electrical distribution network in Waramadong, Region Seven.
According to Dr. Sharma, some 39MW would be added to the grid using solar farms and other smaller such systems in the next three years. Dr. Sharma had also indicated that government in recent years has already outfitted some 291 state buildings with solar systems for electricity generation, an initiative that had caused some $500M in savings