Government’s controversial hike in the National Social Responsibility Levy (NSRL) has had the effect of sapping vital energy out of this island’s renewable sector, a top official today reported.
Vice President of Barbados Renewable Energy Association (BREA) Jerry Franklin told reporters during a BREA news conference that with the increase in the tax from two per cent to ten per cent on July 1, private sector investment in renewable energy systems had slowed noticeably over the past two months.
“The sector has definitely slowed. It is definitely feeling the impact,” he said following the May 30 Budget announcement by Minister of Finance Chris Sinckler of the whopping 400 per cent increase in the NSRL.
With some firms currently unable to absorb the tax increase and left with no choice but to pass on the additional costs to the consumer, Franklin pointed out that the sector still was not considered a necessity, which affected its overall investment.
And while he could not say exactly what the fallout has been either job wise or in dollar terms, Franklin said the sector was definitely witnessing a slowdown, which was forcing companies to make changes to their way of doing business.
“This sector, like any other sector is trying to make the adjustment but of course it is a scenario where the consumer has the power. The consumer makes the decision if they are going to invest or not and the renewable energy space is still not a critical necessity for most people,” he explained.
“It [renewable energy] is a good investment for some people and where it makes sense for some people where they can definitely see a real reduction in their [electricity] bill, they make the investment. But I think the general populous right now are down to necessity, . . . and it [the NSRL] has had a direct impact on the sector,” he stressed.
Coupled with the immediate tax woes, BREA’s President Aidan Rogers complained that Government was still dragging its feet on the overall development of the sector.
For instance, he said Cabinet was yet to approve and implement recommendations coming out of the 2009 Inter-American Development Bank-led Sustainable Energy Framework study for Barbados.
In addition, Rogers said there was an urgent need for the formalization of the National Sustainable Energy Policy, as well as the extension of the licensing period for individuals selling power to the utility provider under the Renewable Energy Rider (RER) programme.
And while a task force was established about two years ago and a draft sustainable policy report prepared and approved by Cabinet, it was yet to be implemented, the BREA president further lamented.