Solar panels cost electricity distribution companies 90 million dollars

Santo Domingo – Tax incentives for solar panels represent a cost of US$250 million for the State in the last decade.
The proliferation of solar panels costs electricity distribution companies (EDE) almost US$90 million per year, with excellent growth potential.

This cost is due to three aspects: self-consumption (customers stop using the distributors’ network), the non-charging of power to many customers, and the fact that panel customers are being overpaid for the energy they inject into the system.

The data appears in the study “Solar Panels in the Electric Systems: Study on Distributed Generation and its Impact on Public Finances,” prepared by the firm Ecomod Business Consulting, led by the economist Magín Díaz, with the collaboration of the international consultant Jerónimo Roca, expert in public policies.

They pointed out that tax incentives for solar panels in individual solutions, including import tax exemptions and tax credits, have represented a cost of approximately US$250 million in the last decade for the State and taxpayers.

Of this amount, US$132.9 million corresponds to income tax (ISR), US$42 million to tariffs, and US$71.9 million to the Tax on the Transfer of Industrialized Goods and Services (Itbis).

They said the number of solar panel clients went from 112 in 2012 to almost 13,700 in August 2023, and the installed capacity went from less than 2 megawatts to 324 megawatts.

They stated that, given this situation, the country needs urgent regulatory changes so that distributed generation -mainly composed of individual solar panel solutions- continues to develop, but with a more equitable distribution of the costs that this segment of the electricity supply implies.

They emphasized that the cost-benefit of installing solar panels is negative since the lower CO2 emissions do not offset the tax expenditure incurred by the government.