SeeNews Renewables — El Salvador’s government has proposed legal changes to extend tax incentives to larger renewable energy projects and the expansion of existing plants.

A draft decree was presented to the parliament on Tuesday by economy minister Tharsis Lopez, chairman of the National Energy Council.

The list of energy sources and technologies under the renewable energy law will be extended to include new technology developments, while the expansion of existing plants will become eligible for incentives which would stimulate additional investments. Another objective, according to the economy ministry, is removing the current limit of 10 MW while maintaining stronger support for the small projects via longer-term tax exemptions.

The reform is expected to encourage investments in hydro, geothermal, wind, solar, marine, biogas and biomass power, as well as any new energy source in the future, the ministry said.

The changes will benefit the winners in the forthcoming auction for 150 MW of wind and photovoltaic energy. The state wants to present the bidding terms before the end of 2015 so as to have the plants operational in 2018.

In previous auctions El Salvador contracted up to 15 MW of small-scale photovoltaic, biogas and hydropower installations and 94 MW of large-scale photovoltaic projects.

Derick Lila
Derick is a Clark University graduate—and Fulbright alumni with a Master's Degree in Environmental Science, and Policy. He has over a decade of solar industry research, marketing, and content strategy experience.

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