Supreme Court Backs Government’s Power to Set Fixed Tariff for Renewable Energy

The Supreme Court has ruled in favor of the government’s authority to implement a fixed tariff system for renewable energy, affirming the roles of the Department of Energy (DOE), Energy Regulatory Commission (ERC), and National Renewable Energy Board (NREB) under the Renewable Energy Act of 2008.

In a 118-page en banc decision, the SC upheld the constitutionality of Sections 6 and 7 of the law, confirming that these provisions allow the government to promote renewable energy use and incentivize clean energy producers through a Feed-In Tariff (FIT) System and Renewable Portfolio Standard.

Section 6 mandates power utilities to include renewables in their energy mix, while Section 7 provides financial incentives to energy producers through the FIT System. These were challenged in court, with petitioners questioning the legality of how tariffs were determined.

The Court found the law to be complete in its provisions and validated the delegation of authority to specialized energy agencies, saying this is necessary to manage the increasing complexities of the modern energy sector.

The SC also supported the advance collection of the FIT allowance, stating that while benefits apply only after renewable power is produced, early collection of funds is legally permissible to sustain the system.

The decision, originally promulgated in August 2024, was only released publicly in April 2025.