Uruguay: Tax Benefits and Incentives planned

Map of Uruguay” The National Ministry of Industry, Energy and Mining in Uruguay is working on a decree to regulate the use and incentives for solar water heaters in the country. The National Director of Energy, Dr Ramón Méndez, said at the end of July that his draft includes regulations for the next 15 years. He further explained that the legislation aims at creating both tax incentives and mechanisms for the certification and qualification of equipment and installers. Uruguay is a small coastal country between Brazil and Argentina with only 3.5 million inhabitants and no resources of oil, gas or coal.

"We consider this a quantum leap forward for the solar market," Méndez announced. The draft foresees three phases of tax benefits over the next 15 years: In the first five after approval of the decree, incentives would be offered only for solar equipment manufactured in Uruguay. In the period between the 6th and 10th year of the decree, incentives are thought to be based both on the source of the equipment, as well as its energy efficiency. In the last phase of the decree between the 11th and 15th year, incentives would be paid out solely on the basis of equipment efficiency, according to the director.

The decree is said to create a list of solar system manufacturers and suppliers: to get certified and registered, their solar equipment must meet the standards of efficiency, safety and mechanical strength to withstand hailstorms. Méndez also announced the implementation of standards to which installers will have to comply in order to register and qualify.

 National import statistics” 80 % of the imported solar thermal water heaters in 2010 came from China. The chart refers to the national import statistics based on trading values in USD.
Source: Mesa Solar

With the creation of “Mesa Solar”, a multi-sector network for the promotion of solar energy in Uruguay, the country already made some steps towards establishing a solar thermal sector three years ago. One major result from the lobbying and consulting work of Mesa Solar was a type of solar obligation (Law 18,585), which requires using solar water heaters in heat-intensive sectors, such as hotels, hospitals, sports clubs and swimming pools.

Since Mesa Solar was founded, the number of solar thermal system suppliers has increased from 9 to 23 this year, according to a presentation held by
Julio Yarza
, representative of Mesa Solar, at the UNDP/UNEP Workshop in Chile this June. The market volume has more than doubled between 2008 and 2010. Yarza quoted the import statistics of the country, showing an import value of USD 722,000 in solar thermal equipment in 2010, whereas the figure of imported solar water heaters was only USD 277,000 in 2008.

More information:
Ministry of Industry, Energy and Mining: http://www.miem.gub.uy/
A Spanish presentation on solar energy in Uruguay: http://prezi.com/6s8axprdp3fu/energia-solar-en-uruguay/

This text was written by Carlos Faria Café, head of the Brazilian consultancy SE-Studio Equinócio – Marca Solar Group based in Brazil.

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