Madagascar introduces fiscal breaks for PV

Madagascar’s government announced it has introduced a VAT and custom duty exemption for the imports of PV components and 50% reduction on the tax it imposes on the revenue generated by residential and commercial PV systems.

According to a press release from the local Ministry of Finance and Budget, these fiscal incentives are expected to spur the development of rooftop solar for self-consumption across the country.

The announcement was given by the country’s president Hery Rajaonarimampianina, speaking at the commissioning of a 130 kW commercial PV system installed by French solar company Green Yellow on a shopping mall in Ankorondrano.

Rajaonarimampianina also said that the Ministry of Water, Energy and Hydrocarbons will facilitate the connection of future rooftop PV projects through simplified bureaucratic procedures. The president added that rooftop PV is expected to provide the national power utility Jirama with electricity at more competitive prices, and that solar in general may help reduce the deficit accumulated by the company over the past years.

The World Bank is supporting Madagascar’s solar plans under the Scaling Solar initiative. The IFC, a member of the World Bank, signed an agreement with the government of Madagascar to design and tender a partnership for privately developed, grid-connected solar power in March 2016. At the time, the IFC said that the 30-40 MW solar facility planned by Madagascar’s government would help ease daily interruptions of power service, and reduce generation costs for Jirama.

Most of Madagascar’s generation capacity is currently represented by thermal power stations (406 MW) and hydropower plants (162 MW). Wind and biomass have a minimal share with both a few hundreds of kWs installed.

Madagascar aims at granting access to electricity to up to 70% of households, and at covering 85% of its energy mix with renewables by 2030. Solar and wind are expected to reach both a 5% share, while hydropower will have the lion’s share with around 75%.