Tug of war over solar duty cuts

TDT | Manama

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Shura Council members and the Financial and Economic Affairs Committee are set for a policy face-off this Sunday as they meet to debate customs exemptions for renewable energy equipment. Supporters argue that easing customs duties would encourage investment in clean energy and help reduce pressure on the national power grid, while opponents warn of a potential hit to state revenues.

The draft law, presented in revised form, seeks to attract investment into renewable energy projects and forms part of Bahrain Economic Vision 2030. The Council will examine a revised supplementary report from the Public Utilities and Environment Committee, submitted by Shura Council members Talal Al Mannai, Dalal Al Zayed, Mohammed Ali Hassan, Jumaa Al Kaabi and Ali Al Aradi.

However, the Financial and Economic Affairs Committee has cautioned that the proposal could have a direct impact on public income.

The draft legislation proposes exempting all systems, devices and equipment linked to renewable energy sources and energy-saving measures — along with their production inputs — from customs duties.

The committee noted that Article 1 defines renewable energy to include solar, wind, geothermal and biogas, extending the exemption to systems using any of those sources. It warned the wide scope could affect public revenues, as the exemption is not limited to industrial inputs.

Amendments also revise the definition of “the Authority” to one designated by decree, avoiding conflict with a separate draft law regulating the electricity and water sector before the Council of Representatives, which would repeal the 2007 decree establishing the Electricity and Water Authority.

A second paragraph has been added to Article 13, reaffirming the customs exemption while requiring the competent minister to set the terms for its application.

The Public Utilities and Environment Committee, chaired by Dr Mohammed Ali Hassan, has recommended the proposal proceed for consideration after discussions on the revised text.