Lower FIT rate for add’l solar installations

by Myrna Velasco, February 11, 2015
from Manila Bulletin

The government may give in to increased solar installations that may reach as high as 500 megawatts, but the corresponding feed-in-tariff (FIT) to that second phase will likely be considerably lower.

From an initial FIT rate of P9.68 per kilowatt-hour (kWh) for the first 50MW of installations, the proposed subsidy for the second batch of 450MW could be lower than P9.00 per kWh.

This was indicated to the media by National Renewable Energy Board (NREB) vice chairman Ernesto B. Pantangco, emphasizing that even the P9.10 per kWh FIT proposal is still being thumbed down by some parties.

Instead, the FIT rate being considered is somewhere in the vicinity of P8.90 per kWh – albeit, he qualified that discussions are still on stalemate at this point.

“The P9.10 (per kWh) is not acceptable rate for phase 2. Because when they were looking for items in service contract applications, the concern of outside groups is that the 500MW can be hit in 2 years,” he said.

He further explained “the P9.10 is still attractive, so we want to encourage but at the same time, we would want to temper the impact.”

Pantangco added “in the ERC (Energy Regulatory Commission), they made a proposal of approximately P8.90 (per kWh.)” But when asked if such was already an acceptable proposition, he stressed: “Not yet, we are till in the process of consulting.”

It was the Department of Energy (DOE) which proposed the hike in solar installations to 500MW. And for developers that could bring their facilities to commercial commissioning by March 2015, they may still be given the original FIT rate of P9.68 per kWh.

Nevertheless, for the capacities that could be integrated into the grid beyond that prescribed cut-off period, the FIT rate shall be set lower depending on the eventual approval of the ERC.

The energy department previously noted that the solar facilities could help the country’s power supply on these critical summer months. But project developers have yet to seriously manifest that their capacities could be set on-line and help shore up supply in the system on the anticipated critical months of March to July 2015.

There have been apprehensions that if the government’s generous award of FIT incentives will not be judiciously calibrated, the Filipino consumers will be stuck with subsidies even at the time that the cost of such technologies would already fall.