Solar costs down 50%, hasten end to fossil fuel

June 16, 2016

from Manila Bulletin

A coalition of businesses, banks, environmentalists, and civic groups came together for a forum entitled “The Truth About Solar: Now Cheaper Than Coal,” which culminated in the signing of a Declaration of Independence from Fossil Fuel and Support for 100 percent RE before 2030. The event aimed to raise awareness that solar is already cheaper than fossil fuel and can supply a majority of the country’s energy, and encouraged power companies and the government to reconsider the country’s path towards coal in light of this new reality.

The forum was organized by Solar Philippines and featured Danny Kennedy, the founder of Sungevity, one of America’s leading solar companies, who discussed how solar now costs P2 to P3 per kilowatt-hour in other countries, resulting in stranded power assets and bankrupting coal companies.

Kennedy noted how both solar and battery costs have fallen at an extraordinary rate, and are now starting to supply 100 percent of the needs of tropical countries like the Philippines. He likened the rise of solar to the disruption of mobile phones to landlines, and called on power companies to heed the lessons of the telco industry and switch to solar for their own survival.

Solar Philippines President Leandro Leviste discussed how solar costs in the Philippines have gone down 50 percent the previous subsidy rate of P9.68. Leviste argued that solar plus batteries can replace all gas, oil, and diesel in the country today, and save Filipinos almost 100 billion pesos a year. He challenged the power industry to embrace new technology, noting “the debate is over given solar is cheaper than coal, and we’re building projects to prove it. The only problem is it takes time to shed old perceptions, but we are confident power companies will see the light.”

“Remaking our power supply will be capital-intensive, and can’t be done by one company alone. There is room for all companies now planning coal to switch to solar, as well as new players to join in, bringing competition and scale to the market, further bringing prices down,” Leviste said.

Leviste explained that solar costs have fallen due to economies of scale, vertical integration, advances in technology, and increased market maturity. Solar Philippines recently announced the country’s first local solar manufacturing plant, and plans to complete 500 MW of solar by 2017.

Statements were also given by attendees, including Makabayan congressman Teddy Casino; Climate Change Commissioner Noel Gaerlan; Batangas anti-coal campaigner Kristine Balmes; and members of various environmental groups.

The participants praised conglomerates taking steps towards renewables, including the Lopez Group, SM, JG Summit, Aboitiz, Ayala, EEI, and Meralco, who now operate their own solar projects and expressed interest to leave fossil fuels for renewable energy once the costs become competitive. These companies were called to switch to solar now that it is cheaper than coal.

In April, then Presidential candidate and now President-elect Duterte campaigned for “the eventual phase out of coal power plants and other plants that use harmful fuels and steer the country for more investments in RE, [and] the timeframe of the phase out will be determined by the speed RE sources can replace coal.”

Last week, NEDA Secretary Ernesto Pernia stated, “We have to move away from coal and toward renewable energy, which is expensive in the short run but   should be cheaper in the long run.”

The attendees vowed to support the Duterte administration’s review of coal plants, and hasten the build up of renewable energy, in light of the new reality that solar is now cheaper than coal.