By means of Decree No. 986/2018 (Regulatory Decree) the Federal Executive Branch regulated the Promotional Regime for Distributed Generation (Law No. 27,424) which established the conditions for the generation of electrical energy from renewable sources by users for self-consumption purposes and eventual injection of surpluses to the distribution network.
Regulatory Decree projects the installation of a total number of one thousand (1,000) megawatts of distributed generation power from renewable sources within the next twelve (12) years.
Please see below a brief description of the main aspects of the Regulatory Decree:
- According to the Regulatory Decree the Federal Secretariat of Energy will be the enforcement authority, tasked with issuing further explanatory and supplementary regulations of the Regulatory Decree.
- Energy distributors are obliged to purchase the injection of surpluses, granting free access to the distribution network.
- User-generators shall comply with the following requirements to inject energy surpluses to the network obtained out of green sources: (i) submit a feasibility report; (ii) verify the installation; (iii) execute an agreement with the distributor; and (iv) install a bidirectional meter.
- Retribution for the injected energy will be calculated based on a net-balance system in the billing of the following month. If there is a credit in favor of the user-generator, payment of such credit may be requested and will be paid twice a year.
- Profits from the injection of renewable energy -up to 300 KW of power- will be Income Tax exempted. The sale of such energy will be VAT exempted as well.
- Operation of the Fiduciary Fund for the Development of Distributed Generation (FODIS for its acronym in Spanish) -created by Law 27,424- is regulated. Such fund was designed to provide loans, incentives and guarantees to facilitate the installation of distributed generation systems in households and small and medium-sized companies.
- Operation of the Promotional Regime for the National Production of Systems, Equipment and Inputs for Distributed Generation purposes (FANSIGED for its acronym in Spanish) is also regulated. FANSIGED main goal is to promote the development of the domestic industry of green energy equipment.
- Provinces and the City of Buenos Aires will have to formally adhere to the federal regime and issue regulations to implement it within their jurisdictions.