Philippines – Enabling Distributed Solar Power in the Philippines

The Philippines’ energy sector is heavily reliant on fossil fuels, and is the largest contributor to national greenhouse gas (GHG) emissions. The Distributed Solar Power NAMA Support Project (NSP) is embedded in the Philippines’ Intended Nationally Determined Contribution (INDC), which targets a 70 per cent reduction of GHG emissions below business as usual (BAU) (projected from 2000) by 2030 and identifies the energy, transport, waste, forestry, and industrial sectors as key contributors to reaching this goal. The RE Renewable Energy Act 2008 is to support Renewable Energy (RE) development through feed-in tariffs (FIT), a renewable portfolio standard (RPS), as well as net metering (NEM) for RE installations up to 100kW. The NEM rules were approved in 2013, but the uptake has been rather slow.

Barriers for higher penetration levels of distributed generation (DG) photovoltaic (PV) under NEM or self-supply include banks and leasing companies being reluctant to offer reasonably priced, reasonably termed, standardized, financing products due to perceived market and technology risks, and the perception that the market is too small, in particularly outside the Metro Manila. NEM projects also must undergo complicated permitting processes from grid operators and Local Government Units (LGU). The absence of technology certification and installer accreditation programs leads to higher risks, transaction costs, and lower safety for grid operators and consumers.