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Ghana Increases Levy On Petroleum Products To Fund Solar Power Projects

Developing countries are taking small yet definitive steps to reduce subsidies and implement taxes on fossil fuels, with Ghana being the latest to have taken a decision in the same direction.

Flag-map of GhanaThe President of Ghana has announced that the levy on petroleum products will be increased to $0.02 per litre. As per the provisions of the customs and excise duty act in Ghana, liquefied petroleum gas will be exempt from the levy.

A part of the revenue raised from this levy will be used to establish the Renewable Energy Fund. This fund, in turn, will be used to set up approximately 200,000 rooftop solar power projects which, according to reports, would “save 200 MW daily.”

Additionally, a levy of $0.02 will be charged on a per kWh basis on electricity transmitted. Revenue from this levy, too, will be used for supporting solar power projects.

Ghana has an installed power generation capacity of 2,100 MW, of which hydro-power has the lion’s share of over 60%. The government has shown serious intent to boost all renewable energy technologies including solar, wind, and small hydro power.

Ghana passed the Renewable Energy Act in 2011 which introduced a feed-in tariff structure for project developers and renewable energy purchase obligation for distribution utilities. The Act gave powers to regulatory bodies to implement appropriate feed-in tariffs and renewable purchase obligation after discussions with stakeholders.

These supportive policy initiatives have started to attract international investors and project developers, many of whom have announced large-scale solar and wind energy projects.

Image Credit: Andriyko_UA | Public Domain

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Written By

Mridul currently works as Head-News & Data at Climate Connect Limited, a market research and analytics firm in the renewable energy and carbon markets domain. He earned his Master’s in Technology degree from The Energy & Resources Institute in Renewable Energy Engineering and Management. He also has a bachelor’s degree in Environmental Engineering. Mridul has a keen interest in renewable energy sector in India and emerging carbon markets like China and Australia.


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