Sky-high electricity costs coupled with frequent power disruptions highlight the necessity of rooftop solar installations in the Philippines.
Boosting Solar Adoption in the Philippines: Government Incentives and Innovative Solutions
The Philippines, with its abundant solar resources, is poised to significantly increase its renewable energy capacity. However, the Green Energy Option Programme has been hampered by a lack of public awareness, regional disparities, and a constrained supply of renewable energy.
To address these challenges, the Philippine government has implemented a variety of incentives and policies to promote home solar energy adoption and make it more affordable for residents.
One such policy is the Net metering program, which allows homeowners to sell excess solar power back to the grid for credits, effectively lowering electricity bills. Other initiatives include the Renewable Energy Act of 2008 and associated policies, which establish frameworks for clean energy growth, and the Green Energy Auction Program (GEAP), a platform for competitive renewable energy procurement.
Government financing schemes, such as those offered by the Pag-IBIG Fund and the Development Bank of the Philippines, provide multi-purpose and green loans respectively to fund rooftop solar PV installations. Local Government Units (LGUs) also implement their own local renewable energy planning programs (LREPs), resulting in projects like solar PV systems for public buildings.
Tax incentives, including tax breaks, VAT exemptions, and waived import duties, reduce upfront installation costs for solar systems. Legislative proposals like Senate Bill No. 532 aim to simplify permits and licenses and address institutional hurdles. The government has also eased foreign ownership restrictions related to solar investments.
These combined efforts align with the Philippines' goal to achieve at least 35% renewable energy in its power mix by 2030, with solar playing a major role. As a result, roughly 5,000 households have already benefited from solar home systems, and the trend is expected to expand with increasing capacity and project implementation.
Despite these efforts, rooftop solar power in the Philippines is underutilized. A typical home solar setup in the Philippines costs around P100,000 (US$1,700), higher than in neighboring countries like Vietnam and Malaysia, due to import duties, logistics across islands, a less developed supply chain, and additional transport and labor costs.
To bridge this gap, companies like SKYWORTH PV are innovating and developing the market. SKYWORTH PV addresses misinformation about reliability and maintenance through transparent communication, strong after-sales support, and real-life case studies that build trust. The company has launched a number of residential applications of their solar technology in the Philippines, including a recent 3 to 6 kW low-voltage hybrid inverter that can easily be integrated into existing homes.
The Philippines still depends heavily on carbon-intensive and imported fossil fuels like coal and gas, contradicting the country's target of generating a significant portion of its electricity from renewable sources. With continued government support, improvements in installer networks, and innovative solutions like those offered by SKYWORTH PV, the Philippines can capitalize on its solar potential and move towards a more sustainable energy future.
Despite Singapore consumers paying an average of US$0.24 per kWh for electricity, second only to Filipino consumers in Southeast Asia, the Philippines' average electricity cost is nearly double that of their Southeast Asian neighbours, at US$0.22 per kWh. Accelerating the deployment of rooftop solar will prove crucial in lowering electricity bills and reducing the country's reliance on expensive and volatile fossil fuel imports.
In rural areas, there are logistical challenges such as limited installers, higher transport costs, and fewer financing options. Home and community-based solar installations could be key to meeting the Philippines' target of generating 35% of its electricity from renewable sources by 2030, and 50% by 2050, especially in rural and underserved communities where grid access is poor.
The average Filipino household experiences 28 electricity supply interruptions in a year, largely due to forced outages caused by coal plant breakdowns. Utility-scale solar costs have dropped 85% between 2010 and 2020, making it the cheapest form of new electricity generation at US$36 per megawatt hour (MWh). The Philippines solar market needs innovation and market development to close the gap and capitalize on this cost-effective, renewable energy source.
