Stakeholders in the solar energy industry are responding positively to the Government’s roll-back of the General Consumption Tax (GCT) applied to lithium-ion batteries after waiting over a year for reprieve.
The Jamaica Customs Agency (JCA) announced in a release that, effective June 13, it would exempt “lithium-ion batteries imported for use in solar application” from the payment of GCT.
Lithium-ion batteries are used to store energy generted by solar panels.
CEO of Solar Buzz Jason Robinson, who has long been advocating for the tax exemption, told Jamaica Observer that he was satisfied “to see that the GCT has now been officially removed from lithium-ion battery imports.
“This will allow more Jamaicans to have access to cleaner and longer lasting solar battery technology. This will also reduce their monthly energy bills while making them more energy resilient against prolonged electricity blackouts,” he continued.
Robinson had previously questioned why the Government of Jamaica had maintained the tax in a time when the increase in the cost of fossil fuel was driving up the price of electricity. He also indicated that the tax was not only affecting solar energy companies, but also ordinary Jamaicans who wanted to install solar photovoltaic systems.
Now at ease after hearing of the tax exemption, Robinson said he’s grateful to Minister of Science, Energy and Technology Daryl Vaz and Minister of Finance and the Public Service Dr Nigel Clarke for making it “a permanent policy”.
Like Robinson, CEO of Iree Solar Alex Hill expressed relief at the roll-back of the GCT.
“We’ve been working with the Government for the past 18 months to get this passed,” he told Business Observer.
Hill contended that the removal of the tax on lithium-ion batteries would more so benefit the populace as “more Jamaicans [are] investing in their energy independence and in order to do that they would require battery energy storage”.
With this is mind, he said that the application of either a tariff or tax on the lithium-ion batteries would be passed on to consumers, most of whom are residential users who will not have any means to recover the added expense.
Moreover, the Iree Solar CEO said that maintaining the tax was “hampering the proliferation” of the Government’s renewable energy transition programme.
“So this is a good thing for Jamaica. We applaud the Government for putting it in legislation formally so that now it is something that future generations can build on. We’re looking forward to more Jamaicans being able to purchase batteries for their energy and become more energy independent,” Hill stated
“If we as a country and a population are really serious about increasing renewable energy penetration, we have to not impact the base input into that. So you can’t tax the component part,” he argued further, adding that other countries have subsidised the importation of some component parts of renewable energy equipment.
While acknowledging that the Jamaican Government may not be in a position to subisdise the component parts, he appealed for a review of the energy and tax policies to ensure that Jamaicans can benefit from investing in renewable energy. Since the renewable energy sector is still dynamic, Hill noted that there needs to be a constant, consistent and timely review of the energy policies.