The Government has suspended the Common External Tariff (CET) on 16 energy saving items.
Minister of Science, Technology, Energy and Mining, Hon. Phillip Paulwell, made the announcement on Tuesday (February 19) in the House of Representatives.
He said Cabinet approved an amendment to the Customs Act to reflect CET exemptions previously granted by CARICOM’s Council for Trade and Economic Development (COTED). The exemption period is for five years from January 1, 2013 to December 31, 2017.
Among the items exempted are: compact fluorescent lamps; absorption refrigeration systems including solar equipment and materials; air conditioning chillers; and mounting accessories for solar water heating systems.
The suspension of the tariff is intended to correct a disparity in the application of General Consumption Tax (GCT) exemptions on 31 energy savings devices by the Ministry of Finance and Planning in June 2012.
Minister Paulwell explained that the regime was not consistent as there were cases, for example, where GCT exemptions were placed on solar water heaters and panels but not on accompanying components and accessories.
“The Cabinet must be commended for moving to correct the disparities. These developments...will move us closer to achieving the national objectives of reducing our oil import bill, improving the competitiveness of our manufacturers, and in increasing energy efficiency, while encouraging our citizens to be more diligent in managing their own energy use,” Mr. Paulwell stated.
Meanwhile, analysis by the Ministry shows that residential electricity demand declined by two per cent in 2012, compared to 2011.
This reduction translates into savings of approximately US$1.5 million, the equivalent of 16,000 barrels of oil. Minister Paulwell said the savings could, in part, be attributed to Jamaican’s increased awareness of the importance of energy efficiency and conservation, and the benefits of changing behaviour in terms of energy use.
“It is important to note that every dollar saved is a dollar that could otherwise be spent in the country to improve, for example, social services such as health, security, education, among others,” Mr. Paulwell pointed out.
He told the House that the Government intends to take the necessary measures to ensure that by 2030, renewable energy technologies contribute at least 30 per cent of the country’s electricity needs.
“This may, at first, appear to be an ambitious target, but we feel that especially given the unpredictability of the energy market and the development of new technologies, that this is highly achievable,” the Minister said.