The government’s renewable energy tax is off-putting to…


AMMAN — Osama Al-Fayez regrets installing solar panels on his roof to take advantage of renewable energy as a long-term investment and reduce the cost of electricity bills.اضافة اعلان

“We found ourselves in a trap,” sighed Fayez as he described his experience with installing a solar power system in his home.

“Despite just being a simple employee, I managed to pay JD 3,000 to install the system to save on my household electricity bills, but the opposite happened” , he sighed.

The government levies JD2 on each kWh of electricity produced from renewable energies. The tax, which is part of a levy that came into effect on April 1, applies only to households and is not applicable to the economic sector, which excludes factories, banks and commercial enterprises from paying any form of tax on their generated green energy. .

Fayez said the government tax discourages individual efforts to transition to solar energy. He explained that if he had known he would be paying a fee for the energy he generates for his home use, he would not have installed solar panels in the first place.

The government is “cheating citizens by claiming it is promoting renewable energy and then imposing a tax”, he proclaimed.

Alaa Al-Youssef had a similar experience. As he was also struggling with rising electricity bills, he sold his vehicle two years ago and used the money to install a renewable energy system to power his home at a cost of 2,900 JD.

“I’ve seen people switch to renewables, but we’ve all been cheated,” he said. He kept his subscription with the national electricity grid, as he said he might need to supplement his energy needs during winter days, at a cost of 20 to 50 JD per month.

With the renewable energy tax, its electricity consumption costs will be the same in summer and winter. “What is the benefit of renewables, then?” He asked.

Youssef questions why the state encourages people to switch to renewable energy by facilitating subsidized bank loans for this purpose, arguing that it is clean energy.

In Jordan, 400 companies are working on the installation of renewable energy systems. Of the total, 130 operate in the north and 90% of the total specialize in the housing sector.

When the JD2 tax per kWh generated was imposed, the demand for renewable energy systems dropped significantly to almost zero, laying off almost 10,000 employees, namely administrators, technicians, engineers and workers. , and thousands of contractors, including drivers, laborers, suppliers. , and new graduates.

Rami Al-Freih, spokesperson for the Renewable Energy Companies Association, criticized the levying of the JD2 tax per kWh. He said that renewable energy for households only represents 20% of the total renewable energy used in Jordan in 2020, the equivalent of what a shopping center consumes without paying the tax.

Freih says the subsidized electricity cost, which is a reduced rate because the government pays part of the bill, only applies to those who consume a volume of 3.6 kWh and less.

Those wishing to harvest more renewable energy and maintain their national grid subscription pay an unsubsidized fee of 120 fils per kWh, in addition to the fixed JD2 per kWh.

Generation system Monthly amount
3.6kWh JD7.2
10kWh JD20
20kWh JD40

Freih argued that renewable energy systems were not economically feasible. “If people install a 5 or 10 kWh system, it will not cover their monthly consumption and they will have to meet their electricity needs through a national grid subscription at a higher, unsubsidized rate,” he said. he declares.

“It is better to get rid of the renewable energy system and ask for the subsidized tariff that the government started to apply from April,” he said.

Subsidized tariffs: 50 fils for 1 to 300 kWh, 100 fils for 301 to 600 kWh and 200 fils per kWh for more than 600 kWh.

The number of households using renewable energy systems in Jordan has reached 35,000, more than 80% of them will benefit from the subsidized tariffs if they use the electricity grid. The remaining 20% ​​of these system owners will pay the unsubsidized tariff if they draw from the national grid at a rate of 120 fils per kWh.

The head of the Energy and Mineral Resources Regulatory Commission, Hussein Al-Laboun, justified the imposition of the JD2 tax, saying that the installation of a renewable energy system is always very economical for the citizens.

“We encourage their installation by consumers who spend 200 JD per month on electricity. With solar energy, this bill could be reduced by 20 to 30 JD,” he said.

However, renewable solar energy systems do not produce at full capacity during cloudy winter days, their owners would naturally have to draw from the power grid, Laboun explained.

This forces grid operators to bring backup stations online, as owners of renewable energy systems are unwilling to go without power, he added. “All of this comes at a cost,” he noted.

Laboun explained that the goal “is not to punish or deter people from using renewable energy, but to encourage it. At the same time, we want to protect the electricity network which has cost hundreds of millions of dinars, and we must make it sustainable.

If the number of subscribers to the renewable energy system reaches 2 to 3 million, the power grid must be technically capable of accommodating the additional supply to the grid, Laboun said.

This requires additional investment in the grid, and the Energy and Minerals Regulatory Commission is consulting with third-party advisers on how to increase online storage capacity with renewables.

During this year’s Eid al-Fitr, marking the end of the holy fasting month of Ramadan, renewable energy systems had to be disconnected from the grid as they lacked the capacity to accommodate the incoming additional.

The head of the lower house’s energy and mineral resources committee, lawmaker Firas Al-Ajarma, said he believed the imposition of the JD2 tax came as citizens are seen as “the weakest link”.

This, he added, “is proof of the failure of energy officials to impose restrictions on renewable energy owners because they fear a repeat of the electricity blackout. ‘last year”.

The inability of the electrical network to maintain a fully redundant voltage supply could lead to the shutdown of all generating units and the loss of power to all transformers.

Ajarma said, “It is contradictory that the JD2 tax was only imposed on small producers and consumers, and not on large projects that obtained permits to generate 50 MW.”

He explained that the annual revenue generated by this specific tax does not exceed JD3 million, which is “considered insignificant in terms of the state budget”.

Ajarma said he asked the government about the issue but got no response.

Environment Minister Muawieh Al-Radaideh said the JD2 tax was imposed by the Ministry of Energy and Mineral Resources. He said his ministry encourages the use of clean energy, as it helps reduce the country’s carbon footprint, while preserving the environment and nature.

Dureid Al-Mahasneh, chairman of EDAMA’s board of directors for energy, water and the environment, said that any tax on renewable energy is a tax on the environment.

He pointed to licensing complications, which hamper the process of installing solar panels. He blamed the impediments on the government and power companies, whose interest is to maintain revenues from the sale of energy through the grid.

“Imposing taxes is short-sighted at the expense of a clean environment and the future development of renewable energy,” he said.

The procedure for submitting an application to install solar panels, according to Irbid Electricity Company spokesman Alaa Al-Qaraawi, requires submitting an application to the electricity company.

“The company may reject the application for technical reasons, such as network connection incompatibility, which may harm the applicants themselves or others living nearby,” he said. .

But if an approval was given, Qaraawi added, “the contracted company can install the solar panel system and connect it to the household electrical circuit breaker. The power company then inspects the system and connection points to ensure proper operation and to calculate energy input and output. »

This story was published in collaboration with ARIJ.

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