Rooftop solar projects seen to reduce cost of electricity

By Alena Mae S. Flores – August 21, 2018 at 08:05 pm

Rooftop solar projects have the potential to reduce electricity cost in the Philippines to P2.50 per kilowatt-hour, according to a report published by the Institute for Energy Economics and Financial Analytics.

It said rooftop solar projects could also bring around $28 billion or P1.5 trillion worth of new investments in the country by 2030.

The report titled ‘Unlocking Rooftop Solar in the Philippines’ said the Philippines had one of the most expensive electricity rates in Southeast Asia. It said a modernized policy could drive the uptake of solar through programs that would ensure power supply and cut prices.

“The government is in a position to change the longstanding status quo, which disproportionately puts fuel-price and foreign-exchange risk on consumers, while utilities and power generators remain insulated from market changes,” said Sara Jane Ahmed, IEEFA energy finance analyst and author of the report.

“As a result, power suppliers have no incentive to transition away from coal and diesel or to hedge against price-change and currency risks,” Ahmed said.

The report said the Philippines could start following global trends toward power sector modernization, energy efficiency and distributed storage.

Ahmed said every kilowatt of installed rooftop solar would mean a reduction in the need for imported coal and diesel power.

She said this could save the Philippines up to $2.2 billion annually in its current account deficit and $200 million per year in diesel subsidies.

The Board of Investments already approved eight solar projects through Solar Philippines Commercial Rooftop Projects Inc. worth P85.96 billion, or $1.65 billion.

“Solar, wind, run-of-river hydro, geothermal, biogas and storage are competitive, viable domestic options that can be combined to create a cheaper, more diverse and secure energy system,” the report said.

Rooftop solar costs P2.50 per kWh (without financing expenses) to 5.3 per kWh (with financing expenses). Utility-scale solar power costs P2.99 per kWh; wind, P3.5 per kWh; geothermal P3.5 to P4.5 per kWh; and run-of-river hydro, P3 to P6.2 per kWh.

“Development of all of these more affordable options is still hampered by costly and unnecessary red tape. The Philippine government can help break this logjam by adopting policies that inject more diversity―and more energy security―into the electricity system while helping lower consumer costs by enabling the uptake of cheaper, cleaner options such as rooftop solar,” Ahmed said.