11 August, 2022

It's time to change the residential electricity subsidy

Eco-subsidy for residential service

Instead of subsidizing the consumption of electricity supplied by the companies, the salvadoran government should subsidize residential solar power system.

We should go from subsidizing the conventional consumption of electricity to subsidizing ecological generation systems. (Photo: courtesy)

By Luis Alberto López / Opinion

The Savior – The subsidy for electricity supply as it is today must end and move on to a new stage, al ecosubsidio more sustainable, sustainable and more environmentally friendly, economic and social.

Instead of subsidizing the consumption of electricity supplied by the companies, the salvadoran government should subsidize the residential solar energy system that would make a qualitative and quantitative leap in this model of support for those most in need.

By having energy generated by solar panels, at least to illuminate the house and turn on some basic appliances in the house, in the medium and long term it will bring multiple benefits, not only environmental but also economic and social.

In the economic part, the government will save the indefinite subsidy that exists with the current mechanism, since it will only make the initial investment of the residential solar energy system and in a certain time it will cut off the support, because the family will be self-sustaining and could even receive benefits from the sale of unused energy to electric companies, that of course it will be necessary to reform this legislation and the regulations.

This will also allow the renewable energy industry to be promoted, generating jobs and economic growth., saving public treasury budget to direct it to other social areas.

There would also be environmental benefits by reducing the consumption of conventional electricity and increasing that generated by nature, which would help lower pollution levels..

The electricity subsidy is a discount on the energy charge that is reflected in the bill of those households whose monthly consumption is between 1 Y 105 kWh, with a maximum of $5. This charge represents approximately 80 % of the total electricity bill.

At present, the budget to subsidize electricity exceeds $60 million per year.

In 2020, a monthly average of 911,384 households in the country received this benefit while the monthly average spent for its payment was $4.3 millions, what added $52.1 million just for the residential component of this grant at the end of the year, according to the Work Report 2020/2021 of the Ministry of Economy (COIN).