The Ghana Chamber of Mines has joined calls for government to revoke all taxes on equipment imported for the use of renewable energy projects.
According to its Chief Executive Officer, Suleiman Koney, the high taxes on the equipment have become a disincentive to the private sector, hence the inability of many to transition to the use of green energy.
He was speaking to Joy Business after inaugurating about 84 kilowatts Solar PV system for the office of the chamber.
“You may be aware that the government of Ghana is fully aligned on the global initiative to transition to clean and sustainable energy. However, the ecosystem that is required to encourage households and firms to invest in clean energy is still in an inchoate stage”.
“While the government has exempted imported solar panels from VAT [Value Added Tax] and other levies, the payments for a completed project are still subject to these statutory taxes and levies. Further, the absence of a net metering system implies that a consumer would be subsidising the operational cost of ECG anytime the solar plant feeds its excess generation beyond its demand into the national grid,” he added.
The PV system that was designed to meet the secretariat’s electricity requirements has an installed capacity of 84kWp and was constructed at a total cost of $122,316.35.
The CEO said, nearly 11% of the contract cost represents statutory taxes and levies, which is a disincentive to the government’s energy transition agenda. At peak conditions, the system has the capacity to generate 111,000 kWh, and its use has reduced the chamber’s consumption of electricity from the national grid by nearly 75%.
The payback period for the project is estimated to be under eight years based on a set of assumptions on the exchange rate and electricity tariff. The infrastructure has a warranty period of 10 years and a performance period of 25 years.