Policies

Law 1715, regulating the Integration of Non Conventional Renewable Energies to the National Energy System

Source: JOIN IEA/IRENA Policy and Measures Database
Last updated: 2 March 2018

The law 1715 encourages the integration of alternative energy in the Colombian Energy mix. This law aims to incentivise private capital investment in renewable energy integration. The law provides fiscal incentives, establishes a dedicated fund and creates the legal basis for development of renewable energy support initiatives, thus paving the way for further policy and regulatory action.

The law mandates the government to establish rules and guidelines for the sale of renewable electricity by large- and small-scale self-generators, including simplified procedures and net metering for small-scale generators. UPME (Unit of Energy Mining Planning - Unidad de Planeación Minero Energética) is in charge of defining the maximum power limit of small-scale self-generation.

Fiscal incentives are also provided by the law, including:

  • (1) income tax deduction of 50% of investment value for up to 50% of taxable income for up to 5 years; 
  • (2) VAT exemption for renewable energy equipment and services; 
  • (3) import duty exemption for renewable energy equipment not produced locally; 
  • (4) accelerated depreciation of up to 20% per year for renewable energy investments.

The law mandates the harmonization of environmental requirements, the development of environmental impact assessment procedures for renewable energy projects, and the establishment of a rapid assessment cycle for renewable energy projects.

It aims for the substitution of diesel generation in isolated areas with renewable energy, either through exclusive concessions or through other incentives. It creates a dedicated fund for Renewable Energy and Energy efficiency (FENOGE) to provide soft loans and other forms of support for energy access and productive activities, mainly with renewable energy.

The law 1715 also extendes until 2021 the dedicated fund for Energy Access of Isolated Areas (FAZNI) previously established by law 633 and extended by law 1099.

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