The Solar Chamber Warns Of A Possible 'Tax On The Sun' In The ASEP Proposal

(MENAFN- Newsroom Panama) The Panamanian Chamber of Solar energy expressed its concern regarding the proposal presented by the National Authority of Public Services (ASEP), which would introduce regulatory changes for residential and commercial users who generate energy with solar panels, which could be interpreted as a“tax on the Sun.”
In a letter sent to ASEP, the Chamber warns that the measure poses economic, social and environmental risks for the development of renewable energy in Panama.
They argue that the new scheme being implemented discourages the use of solar panels by direct customers, who are connected to Ensa or Naturgy electricity distribution networks, and who have been able to install solar panels on the roofs of their homes or establishments.

“The proposed net billing scheme, combined with a dual-rate tariff, will significantly increase fixed costs for users who have invested in distributed generation systems,” says the note, signed by Juan Andrés Navarro, president of the Solar Energy Chamber.
This is a change in the billing mechanism for energy generated by the customer's panels versus the rate that the distribution company would charge the customer. Currently, companies credit equally the kilowatt hour of energy generated by the customers' panels versus the one they consume from the grid.
The proposed model, the Chamber adds,“reduces economic incentives for self-consumption, lengthening investment recovery periods and discouraging new installations.”

Over the past 10 years, there has been an increase in the number of self-consumption customers or those generating with solar panels in Panama. The number of self-consumption customers rose from 13 in 2014 to 3,325 this year, and the installed capacity was 102,268 kilowatts (KW). Current regulations allow a cap on self-consumption generation of up to 3% of the total system.
Under the current system, customers have a bidirectional meter, installed by Ensa or Naturgy, which records the energy that the solar panels inject into the system, and also measures the energy that the customer consumes from the grid. To make the monthly billing, the distribution companies discount the kilowatt hours generated from the amount of kilowatts consumed.

The customer only pays for the additional kilowatts consumed from the grid. If the generation with the panels was greater, the distribution company recognizes only up to 25% of the additional production.
The statement by the solar industry association comes after the presentation of a consultancy carried out by ASEP to determine the acceptable percentage for the penetration of clean energy in Panama, particularly solar energy. This consultancy is developed through three forums presented to the regulator and the system agents. The presentation of a third chapter on the calculations, findings and recommendations is pending, scheduled for January 2025.

“The current net metering scheme has proven to be an efficient and equitable instrument to encourage distributed generation in Panama. However, it is contradictory to propose regulatory changes when current conditions already face multiple barriers that hinder the development of this sector,” the note states.
The Solar Chamber questioned the lack of inclusive participation in the preparation of the proposed changes, claiming that the analysis was based exclusively on input from distribution companies, leaving out users and installation companies. It also denounced delays in the release of preliminary reports and a public consultation schedule that limits opportunities for participation.

“Changing the current rules without an adequate transition limits access to clean technologies for households and communities, especially affecting those in rural or low-income areas,” Navarro added.
The organization stressed that the modifications would not only discourage the use of solar panels, but would also increase the dependence on generation from other sources, which could translate into higher costs for all users of the electrical system. In addition, it warned of possible setbacks in Panama's climate commitments and a loss of confidence by investors in the energy sector.
Similar measures applied in other countries, such as the so-called“sun tax” implemented in Spain, generated massive rejection by the population. For years, this regulation provoked protests and discouraged the adoption of renewable energies, leading the Spanish government to eliminate the measure due to its negative impact on sustainable development and public perception.

The Solar Chamber asked ASEP to reconsider the measures and maintain the net metering scheme, which encourages self-consumption of energy. It also requested the establishment of a public consultation process that includes all the actors in the sector and the design of a transition plan that minimizes the impacts for current and future users.
So far, ASEP has not issued any official comments on the concerns raised, but the discussion continues to generate controversy in the energy sector. The Solar Chamber and other actors hope that the authorities will prioritize an inclusive and sustainable approach to ensure equitable development of renewable energy in the country.
The proposal presented on November 22, concludes the note from the Solar Chamber,“not only puts the development of Distributed Generation in Panama at risk, but also affects confidence in the regulator and compromises the country's climate and energy commitments.”

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