Renewable Energy Act of 2008 (RA 9513)
Republic Act No. 9513, the Renewable Energy Act of 2008, is the foundational law governing the development, utilization, and commercialization of renewable energy (RE) resources in the Philippines. Approved 16 December 2008 and effective 30 January 2009 (§40: 15 days after publication) [RA 9513, §40, 2008; Official Gazette, 2008-12-16], it established the statutory and incentive framework that underpins virtually all Philippine RE programs and targets.
Chapter I — Title and Declaration of Policies (§1–4)
Section 2 — Declaration of Policies
| Point | Policy |
|---|---|
| (a) | Accelerate exploration and development of RE resources (biomass, solar, wind, hydro, geothermal, ocean, including hybrid systems) to achieve energy self-reliance and reduce dependence on fossil fuels |
| (b) | Increase RE utilization by developing national and local capabilities; promote efficient and cost-effective commercial application through fiscal and non-fiscal incentives |
| (c) | Encourage RE development as a tool to prevent or reduce harmful emissions, balancing economic growth with environmental protection |
| (d) | Establish the necessary infrastructure and mechanisms to carry out mandates in this Act and existing laws |
[RA 9513, Section 2, 2008]
Section 4 — Key Definitions
| Term | Definition |
|---|---|
| Biomass resources | Non-fossilized, biodegradable organic material (agricultural products, residues, wastes) convertible to energy — excludes corn, soya beans, and rice but includes sugarcane and coconut |
| Distributed generation | Small generation entities supplying directly to the distribution grid, each not exceeding 100 kW |
| Government Share | Amount due the National Government and LGUs from exploitation of naturally-occurring RE resources (geothermal, wind, solar, ocean, hydro — excludes biomass) |
| Green Energy Option | Mechanism empowering end-users to choose RE as their energy source |
| Hybrid Systems | Power facility using ≥2 technologies including conventional and RE, with a minimum of 10 MW or 10% of annual energy output from the RE component |
| Micro-scale Project | RE project with capacity not exceeding 100 kW |
| Net Metering | Two-way grid connection system where a user is charged only for net electricity consumption and credited for overall contribution to the grid |
| Registered RE Developer | RE Developer duly registered with the DOE |
| Renewable Energy Market (REM) | Market where RE Certificates equivalent to power generated from RE resources are traded |
| Renewable Portfolio Standards (RPS) | Market-based policy requiring electricity suppliers to source an agreed portion of energy from eligible RE resources |
| RE Service Contract | DOE-RE Developer agreement — pre-development stage (assessment → financial closing) and development/commercial stage (construction → operation) |
[RA 9513, Section 4, 2008]
Chapter II — Organization (§5)
Section 5 — Lead Agency
The DOE is the lead agency mandated to implement all provisions of this Act. DOE’s functions under RA 7638 and RA 9136 are expanded by RA 9513 [RA 9513, Section 5, 2008].
Chapter III — On-Grid Renewable Energy Development (§6–11)
Section 6 — Renewable Portfolio Standard (RPS)
All stakeholders in the electric power industry shall contribute to RE industry growth. The National Renewable Energy Board (NREB) — created under Section 27 of this Act — shall set the minimum percentage of generation from eligible RE resources and determine to which sector RPS shall be imposed on a per-grid basis within one year of effectivity [RA 9513, Section 6, 2008]. See Renewable Portfolio Standards (RPS) .
Section 7 — Feed-In Tariff (FiT) System
A mandatory FiT system for electricity produced from emerging RE — wind, solar, ocean, run-of-river hydropower, and biomass — is established. Large hydro and geothermal are not covered by FiT (classified as established, not emerging, RE). The ERC in consultation with the NREB shall formulate and promulgate FiT rules within one year [RA 9513, Section 7, 2008].
FiT rules must include [RA 9513, Section 7(a)–(d), 2008]:
| Requirement | Detail |
|---|---|
| (a) | Priority grid connection for wind, solar, ocean, run-of-river hydro, and biomass plants |
| (b) | Priority purchase and transmission of — and payment for — such electricity by grid operators |
| (c) | Fixed tariff per technology for a mandated number of years not less than twelve (12) years; determined by ERC+NREB |
| (d) | FiT applied to RE used for RPS compliance in accordance with RPS rules |
See Feed-in-Tariff (FiT) System .
Section 8 — Renewable Energy Market (REM)
The DOE shall establish the REM to facilitate RPS compliance, and shall direct PEMC to amend WESM Rules to incorporate REM-specific rules [RA 9513, Section 8, 2008].
PEMC shall, under DOE supervision, establish a Renewable Energy Registrar within one year — to issue, keep, and verify RE Certificates corresponding to energy generated from eligible RE facilities. These certificates are the compliance instruments for RPS. A transaction fee equal to half of regular WESM player fees may be imposed by PEMC [RA 9513, Section 8, 2008]. See Renewable Energy Market (REM) .
Section 9 — Green Energy Option (GEO)
DOE shall establish the Green Energy Option program, enabling end-users to choose RE as their energy source. In consultation with the NREB, DOE shall promulgate implementing rules [RA 9513, Section 9, 2008].
Upon DOE determination of technical viability, end-users may directly contract from RE facilities, with energy distributed through their DUs. Their monthly electric bill must show how much of their monthly energy consumption and generation charge is provided by RE facilities. TRANSCO, DUs, PEMC and all relevant parties are mandated to provide mechanisms for physical connection and commercial arrangements [RA 9513, Section 9, 2008]. See Green Energy Option Program (GEOP) .
Section 10 — Net Metering for Renewable Energy
Upon request by distribution end-users, DUs shall enter into net-metering agreements with qualified end-users installing RE systems — without discrimination and subject to technical considerations [RA 9513, Section 10, 2008].
ERC, in consultation with NREB and industry participants, shall establish net metering interconnection standards and pricing methodology within one year. The DU is entitled to any RE Certificate resulting from the net-metering arrangement and may use it for RPS compliance. DOE, ERC, TRANSCO, DUs, PEMC and all parties are mandated to provide physical connection and commercial arrangement mechanisms [RA 9513, Section 10, 2008]. See Net Metering Program .
Section 11 — Transmission and Distribution System Development
TRANSCO (or its buyer/concessionaire) and all DUs shall include required RE connection facilities in their Transmission and Distribution Development Plans, subject to DOE approval. Connection facilities for RE power plants — including extension of transmission and distribution lines — shall be subject only to ancillary services covering such connections (no additional access or connection charges) [RA 9513, Section 11, 2008].
Chapter IV — Off-Grid Renewable Energy Development (§12)
Section 12 — Off-Grid Areas
Within one year of effectivity, NPC-SPUG and/or qualified third parties in off-grid areas shall source a minimum percentage of total annual generation from available RE resources in the area, as determined by DOE on NREB recommendation. “Successors-in-interest” are entities technically and financially capable of taking over NPC-SPUG areas [RA 9513, Section 12, 2008].
Eligible RE generation in off-grid and missionary areas qualifies for RE Certificates (§8). If no viable RE resources exist in the area, the relevant supplier is still subject to the RPS obligation under §6 [RA 9513, Section 12, 2008].
Note: §12 is the direct statutory basis for DOE’s off-grid RPS rules (DC2018-08-0024 suspended, replaced by DC2023-05-0014) and NPC-SPUG’s hybridization programme. The “qualified third parties” language mirrors EPIRA §59 and is the regulatory precursor to MGSPs under RA 11646.
Chapter V — Government Share (§13)
Section 13 — Government Share
Government share on existing and new RE development projects [RA 9513, Section 13, 2008]:
| RE Type | Government Share Rate |
|---|---|
| All RE resources (excluding geothermal) | 1% of gross income from RE sale and incidental income |
| Indigenous geothermal energy | 1.5% of gross income |
| Micro-scale projects for communal/non-commercial purposes (≤100 kW) | Waived |
This government share is distinct from the host community share under ER 1-94 — different beneficiaries, different rate base, and different legal authority. See Energy Regulations 1-94 (ER 1-94) .
Chapter VI — Environmental Compliance (§14)
Section 14 — Compliance with Environmental Regulations
All RE exploration, development, utilization, and RE systems operations shall be conducted in accordance with existing environmental regulations as prescribed by DENR and/or any other concerned government agency [RA 9513, Section 14, 2008].
Key Mechanisms Established
| Mechanism | Description |
|---|---|
| Feed-in Tariff (FiT) | Guaranteed above-market tariff for eligible RE technologies over a fixed contract period; administered by ERC. See Feed-in-Tariff (FiT) System |
| Renewable Portfolio Standards (RPS) | Mandatory minimum RE sourcing requirements for DUs and RES; annual increment set by DOE. See Renewable Portfolio Standards (RPS) |
| Renewable Energy Market (REM) | Trading platform for Renewable Energy Certificates (RECs) used to demonstrate RPS compliance. See Renewable Energy Market (REM) |
| Net Metering | Allows small-scale RE generators (≤100 kW) to export surplus power to the grid and offset their consumption charges. See Net Metering Program |
| Green Energy Option Program (GEOP) | Allows electricity consumers ≥100 kW to source power directly from RE suppliers. See Green Energy Option Program (GEOP) |
| Renewable Energy Trust Fund (RETF) | Fund for RE R&D and capacity building, sourced from a levy on fossil fuel-based generation |
RE Fiscal Incentives
RA 9513 grants RE developers and manufacturers a suite of fiscal incentives including income tax holiday, duty-free importation of RE equipment, VAT zero-rating, special realty tax rates, and carbon credits [PEP 2023-2050 Vol. I, 2023]. See RE Fiscal Incentives (RA 9513) for the full IRR-operationalized package.
Key implementing circulars for the fiscal incentives:
| Circular | Issued | Subject |
|---|---|---|
| DC2020-02-0005 | 13 February 2020 | “Guidelines on the Duty-Free Importation and Monitoring of the Utilization of RE Machinery, Equipment, Materials, and Spare Parts and their Transfer and Other Disposition” — implements tariff duty exemption for RE equipment imports; monitors utilization, transfer, and disposition |
| DC2021-12-0042 | 24 December 2021 | Amends Sections 13(E) and 18(C) of DC2009-05-0008 (IRR of RA 9513): Section 13(E) — CIT (10% rate) availment process + Sworn Undertaking that CIT savings are passed to end-users as lower rates + compliance monitoring; Section 18(C) — Certificate of Endorsement (COE) required per importation of RE equipment (not once) |
[NREP 2020-2040, p.64, 2022]
Foreign Participation in RE Projects
RA 9513 contains a 60% Filipino ownership floor for RE resource exploration, development, and utilization. The following exceptions have been established by DOE circulars:
| Exemption | Circular | Conditions |
|---|---|---|
| Biomass and WTE | DC2019-01-0001 (Omnibus Guidelines) | Local capitalization requirement lifted |
| Large-scale Geothermal | DC2020-11-0024 (OCSP3 Guidelines) | 100% foreign ownership permitted if: (i) initial investment ≥ USD 50M, and (ii) project is under an FTAA as defined by the Constitution |
| Solar, Wind, Hydro, Ocean | DC2022-11-0034 | 100% foreign equity affirmed (DOJ opinion 29 September 2022) |
[NREP 2020-2040, p.65, 2022; PEP 2023-2050 Vol. II, p.43, 2023]
End-User Financing for RE Systems
Pag-IBIG Fund (HDMF) — rooftop solar PV installation qualifies as a “home improvement,” making homeowners eligible for Pag-IBIG multi-purpose loans to finance net metering program participation. Development and commercial banks and microfinance institutions also offer similar end-user financing products [NREP 2020-2040, p.65, 2022].
RA 9513 originally allowed 100% foreign ownership in exploration, development, and utilization of solar, wind, hydro, ocean, and biomass resources — later extended administratively via DC2022-11-0034 to clarify coverage of offshore wind [PEP 2023-2050 Vol. II, p.43, 2023].
Relationship to NREP and PEP Targets
The National Renewable Energy Program (NREP) 2020-2040, adopted 19 July 2022, serves as the primary implementation vehicle for RA 9513’s mandates, carrying forward the RE share targets (35% by 2030, 50% by 2040) into the PEP 2023-2050 planning framework. See National Renewable Energy Program (NREP) 2020-2040 and Renewable Energy Targets 2023-2050 .
Ingest status: Complete — all chapters ingested (Ch. I–IX, §1–40).
Chapter VII — General Incentives (§15–26)
Section 15 — Incentives for RE Developers
RE developers of RE facilities (including hybrid systems), for both power and non-power applications, as certified by DOE in consultation with BOI, are entitled to [RA 9513, Section 15, 2008]:
| Incentive | Detail |
|---|---|
| (a) Income Tax Holiday (ITH) | Exempt from national income tax for the first seven (7) years of commercial operations. Additional investments may receive a fresh ITH package (up to 3× the original period). Discovery/development of a new RE resource counts as a new investment. |
| (b) Duty-free Importation | Within the first ten (10) years from certification, machinery, equipment, materials, and parts directly used in RE facilities are exempt from tariff duties. DOE endorsement required before importation and before any resale within the 10-year period. |
| (c) Special Realty Tax Rates | Realty and other taxes on civil works, equipment, machinery, and improvements actually used for RE facilities shall not exceed 1.5% of original cost less accumulated depreciation (net book value). For integrated resource development under RA 9136, real property tax is imposed only on the power plant. |
| (d) Net Operating Loss Carry-Over (NOLCO) | Losses during the first three (3) years from commercial operation may be carried over as deductions for the next seven (7) consecutive taxable years. Not available for losses resulting from incentive availment. |
| (e) Corporate Tax Rate | After the 7-year ITH, RE developers pay 10% CIT on net taxable income. Mandatory pass-through: savings must be passed to end-users as lower power rates. |
| (f) Accelerated Depreciation | Available only if ITH was not received before full operation; mutually exclusive with ITH. Declining balance or sum-of-years-digit methods; rate not exceeding twice the standard depreciation rate. |
| (g) Zero % VAT | Sale of power generated from RE is subject to zero percent (0%) VAT. All RE developers entitled to zero-rated VAT on local purchases of goods, properties, and services for development, construction, and installation — including subcontractors. |
| (h) Missionary Electrification Cash Incentive | An RE developer operating in missionary areas is entitled to a cash incentive per kWh equal to 50% of the UC missionary rate, chargeable to the UC-ME fund. |
| (i) Carbon Credit Tax Exemption | All proceeds from sale of carbon emission credits are exempt from all taxes. |
| (j) Domestic Equipment Tax Credit | Tax credit equivalent to 100% of the VAT and customs duties that would have been paid if RE machinery and equipment were imported, when purchased from a domestic manufacturer with prior DOE approval. |
[RA 9513, Section 15, 2008]
Section 16 — Environmental Compliance Certificate
Notwithstanding LGC Section 17(b)(3)(iii), an RE developer needs only to secure the ECC from the corresponding regional office of DENR — not the national office [RA 9513, Section 16, 2008].
Section 17 — UC Exemption
Power generated through RE for the generator’s own consumption or for free distribution in off-grid areas is exempt from the Universal Charge under EPIRA §34 [RA 9513, Section 17, 2008].
Section 18 — Intermittent RE Transmission Charges
Registered RE developers producing power from intermittent RE resources may opt to pay TRANSCO’s transmission and wheeling charges on a per-kWh basis at the average per-kWh grid transmission rate, rather than on a demand basis [RA 9513, Section 18, 2008].
Section 19 — Hybrid and Cogeneration Systems
The §15 incentives apply to hybrid and cogeneration systems, but only on the equipment and components utilizing RE resources — not the conventional fuel components [RA 9513, Section 19, 2008].
Section 20 — Intermittent RE “Must Dispatch” Status
TRANSCO shall determine the maximum penetration limit of intermittent RE-based power plants to the grid through technical and economic analysis. Qualified registered RE generating units with intermittent resources shall be considered “must dispatch” based on available energy and shall enjoy priority dispatch [RA 9513, Section 20, 2008].
All provisions in WESM Rules, Distribution Code, and Grid Code that do not allow “must dispatch” status for intermittent RE resources are deemed automatically amended by this provision. PEMC and TRANSCO shall implement technical mitigation to ensure system safety and reliability.
Intermittent RE resources (as defined in §20): wind, solar, run-of-river hydro, and ocean energy — location-specific resources whose availability is naturally difficult to predict and inherently uncontrollable [RA 9513, Section 20, 2008].
Section 21 — Incentives for RE Equipment Manufacturers
Local manufacturers, fabricators, and suppliers of locally-produced RE equipment, accredited by DOE (in consultation with DOST, DOF, and DTI) and registered with BOI, are entitled to [RA 9513, Section 21, 2008]:
| Incentive | Detail |
|---|---|
| (a) | Duty-free and VAT-free importation of components, parts, and materials for RE equipment manufacture |
| (b) | Tax credit equivalent to 100% of VAT and customs duties on domestic component purchases |
| (c) | ITH for 7 years on income derived from sale of RE equipment, machinery, parts, and services |
| (d) | Zero-rated VAT on transactions with local suppliers |
The RE sector is declared a Priority Investment Sector and shall regularly appear in the Investment Priority Plan [RA 9513, Section 21, 2008].
Section 22 — Biomass Farmer Incentives
For ten (10) years from effectivity, individuals and entities planting biomass crops (jatropha, coconut, sugarcane, etc.) certified by DOE are entitled to duty-free importation and VAT exemption on all types of agricultural inputs, equipment, and machinery [RA 9513, Section 22, 2008].
Section 23 — Tax Rebates for RE Equipment Purchases
DOF shall provide rebates on taxes paid for the purchase of RE equipment for residential, industrial, or community use [RA 9513, Section 23, 2008].
Section 24 — Period of Grant and NREB Reporting
Fiscal incentives (§15) apply to all RE capacities upon effectivity. NREB, in coordination with DOE, shall submit a yearly report to Congress through the Joint Congressional Power Commission (EPIRA §62) every January, covering RE development progress and benefits. This serves as the basis for Congressional review of incentive rationalization [RA 9513, Section 24, 2008].
Sections 25–26 — Registration and Certification
All RE developers and local manufacturers must register with DOE through the Renewable Energy Management Bureau (REMB). Upon registration, DOE issues a certification of entitlement to incentives. DOE must issue certifications within fifteen (15) days of request [RA 9513, Sections 25–26, 2008].
Chapter VIII — General Provisions (§27–32)
Section 27 — National Renewable Energy Board (NREB)
The NREB is created as the advisory and oversight body for the RE sector. Composition [RA 9513, Section 27, 2008]:
Government representatives (permanent basis, designated by their respective secretaries): Chairman + 1 each from DOE, DTI, DOF, DENR, NPC, TRANSCO (or successors), PNOC, PEMC.
Sectoral representatives (appointed by the President upon endorsement by respective industry associations): 1 each from RE Developers, Government Financial Institutions, private DUs, electric cooperatives, electricity suppliers, and NGOs.
Technical Secretariat provided by the REMB. NREB Chairman must convene the Board within one month of effectivity.
Powers and functions [RA 9513, Section 27(a)–(e), 2008]:
| Function | Detail |
|---|---|
| (a) | Evaluate and recommend to DOE the mandated RPS % and minimum RE generation capacities in off-grid areas |
| (b) | Recommend specific actions to facilitate NREP implementation and prevent overlapping government functions |
| (c) | Monitor and review NREP implementation, including RPS compliance and off-grid RE minimums |
| (d) | Oversee and monitor RETF utilization |
| (e) | Perform other functions necessary to attain the Act’s objectives |
See National Renewable Energy Board (NREB) .
Section 28 — Renewable Energy Trust Fund (RETF)
The RETF is administered by DOE as a special account in GFIs. Exclusively used for [RA 9513, Section 28, 2008]:
| Purpose | Detail |
|---|---|
| (a) | RE R&D, demonstration, and promotion; funding for RE research institutions (public-private partnership); scholarships and fellowships for energy studies |
| (b) | Support development and operation of new RE resources to improve market competitiveness (competitive and transparent process) |
| (c) | Nationwide RE resource and market assessment studies |
| (d) | Propagate RE knowledge — accrediting, training, and supporting institutions that promote RE |
| (e) | Other activities necessary to attain the Act’s objectives |
Funding sources [RA 9513, Section 28, 2008]:
| Source | Rate/Amount |
|---|---|
| Emission fees from generating facilities (RA 8749 — Clean Air Act) | All proceeds |
| Philippine Charity Sweepstakes Office (PCSO) net annual income | 1.5% |
| Philippine Amusement and Gaming Corporation (PAGCOR) net annual income | 1.5% |
| PNOC net annual dividends remitted to National Treasury | 1.5% |
| Contributions, grants, donations (tax deductible) | Variable |
| Government share from indigenous non-renewable energy resources | 1.5% of proceeds |
| Revenue generated from RETF utilization itself | All proceeds |
| Fines and penalties imposed under this Act | All proceeds |
RETF may be deployed through: grants, loans, equity investments, loan guarantees, insurance, counterpart funds, or other financial arrangements. Allocation shall be competitive and transparent [RA 9513, Section 28, 2008]. See Renewable Energy Trust Fund (RETF) .
Section 29 — Government Financial Assistance
DBP, LBP, Phil-Exim Bank, and other GFIs shall provide preferential financial packages for RE projects endorsed by DOE [RA 9513, Section 29, 2008].
Section 31 — Host Community Benefits
Eighty percent (80%) of the government share from RE projects (royalties) shall be used directly to subsidize the electricity consumption of host community end-users whose monthly consumption does not exceed 100 kWh. Subsidy may be in the form of rebates, refunds, or other forms as determined by DOE, DOF, and ERC in coordination with NREB. Implementation mechanisms to be promulgated within six months of effectivity [RA 9513, Section 31, 2008].
Note: This provision creates a direct link between RE project revenue and local consumer electricity subsidy — an RE-sector analogue to the lifeline rate mechanism. See Lifeline Rate and Energy Regulations 1-94 (ER 1-94) .
Section 32 — Renewable Energy Management Bureau (REMB)
REMB is established under DOE, replacing the former Renewable Energy Management Division of the Energy Utilization Management Bureau. REMB serves as the Technical Secretariat of the NREB [RA 9513, Section 32, 2008].
Chapter IX — Final Provisions (§33–40)
Section 33 — IRR
DOE shall promulgate the IRR within six (6) months of effectivity, in consultation with the Senate and House Energy Committees and stakeholders. Issued as DC2009-05-0008 [RA 9513, Section 33, 2008].
Section 34 — Congressional Oversight
The Joint Congressional Power Commission created under EPIRA §62 exercises oversight over RA 9513 implementation [RA 9513, Section 34, 2008].
Section 35 and 36 — Prohibited Acts and Penalties
Prohibited acts [RA 9513, Section 35, 2008]:
| Act | Provision violated |
|---|---|
| Non-compliance with RPS rules | §6 |
| Willful refusal to enter net-metering arrangements with qualified distribution grid users | §10 |
| Falsification of documents to avail of fiscal/non-fiscal incentives | §15, §26 |
| Failure/willful refusal to issue DOE certification within 15 days | §26 |
| Non-compliance with DOE implementing guidelines | General |
Penalties (§36): Criminal — imprisonment of 1 to 5 years, or a fine of PhP100,000 to PhP100,000,000 (or twice damages/costs avoided, whichever is higher), or both. Liable parties include responsible partners, directors, COO, CEO, and officers of corporations. DOE additionally empowered to impose administrative fines. Environmental penalties under DENR still apply [RA 9513, Section 36, 2008].
Sections 39–40 — Repealing Clause and Effectivity
Specific repeals (§39): PD 1442 §1 (government-monopoly on geothermal exploration) and RA 7156 §10(1) (2% mini-hydro special privilege tax rate) are repealed, in line with RA 9513’s government share of 1%/1.5% [RA 9513, Section 39, 2008].
Effectivity (§40): 15 days after publication in at least two newspapers of general circulation. Signed 16 December 2008 [RA 9513, Section 40, 2008].
Full text: Cleaned copy