What will it take for solar power to take off in the Philippines?

As someone who works in the solar power industry himself, Alex Mendenilla’s decision to install a solar photovoltaic (PV) system at his family’s ancestral home was almost mathematical certainty.

“I had someone consult me about a ‘perpetual motion machine’ once,” Mendenilla recalled with a chuckle to Rappler.

“I told him it’s impossible because of the laws of physics. But then I realized: just buy a solar system. It’s the closest thing we have to a perpetual machine. In the morning, it’s literally free energy.”

Thanks to his connections within the industry, Mendenilla sought the help of his friend to install a 6-kilovolt (kV) PV system in his home comprising 10 panels that can generate around 400 to 600 watts of power.

The process took Mendenilla around less than two weeks.

While it cost Mendenilla around P250,000 to have the PV system installed, he saw it as an investment that can pay for itself. He told Rappler that he saves around P6,000 a month from his electricity bills because of his solar PV system.

“Compare it to a franchise. A popular food kiosk might cost P1 million and earn you P30,000 a month. A solar system costs a fraction of that and offers a guaranteed return as long as the sun rises,” he said.

Although the benefits of solar PV systems such as lower power rates are well-known to Filipinos, the upfront cost of installation remains a huge obstacle for many interested households.

Solar panels can cost about P4,000 to P5,000 per panel, with an average of four to 10 panels needed for a Filipino household consuming around 200 to 300 kilowatt hours (kWh) per month. However, the exact number depends on the specific home’s energy usage, rooftop space, and the sunlight conditions.

Solar-powered homes are also not immune from a grid’s vulnerabilities. While it is cheaper to install a grid-tied PV system – a system commonly found in areas with a reliable power supply – the household will also lose power when the grid it is connected to fails.

For homes that are not connected to the grid, these will need a battery to be powered at night. However, Mendenilla said that a battery alone could double the installation cost.

Ping Mendoza, president of the Philippine Solar and Storage Energy Alliance (PSSEA), said many households still worry about the upfront cost of installation since it can range between P100,000 to P300,000 depending on the home’s needs.

Although commercial banks and even the Pag-IBIG Fund are now offering financing options for solar PV installation, New Nexus Energy program consultant Jan Ralph Ebora said access to credit options remains limited for lower-income households.

“It’s just like a car loan. It’s easier to access a loan if you have a good credit standing or if you have a high salary. So, there are still barriers to solar (adoption) because it’s an upfront cost, and if you don’t have an upfront cost, it’s difficult to access the loans of the banks,” he explained in Filipino.

Although Mendenilla was able to find connections to reputable solar PV system installers, those looking to go solar in other areas may struggle to find the right one to work with. Mendoza said the solar power commerce remains somewhat fragmented since its backbone is built by grassroots installers who mostly work on their own.

“So that’s what’s difficult where they’re fragmented and unable to scale, and the consumer has to go through so many different, I guess, content and research before finding the right party to trust,” he said.

Ebora added that installers may struggle to market their services and laymanize the technical needs of a solar PV system to their potential clients.

“Magpropose sila ng mga specs (They will propose specifications), like something kilowatt-hours of battery and kilowatts. The common household owner doesn’t really care or doesn’t really know about these numbers. So my guess is a coherent industry might help with this, like in terms of a centralized education for their vicinity, their region,” he said.

Beyond the fragmentation of the local industry, there is also a lack of awareness surrounding government programs such as the net-metering program, where consumers can sell their excess power to their local electric cooperatives in exchange for a deduction in their electricity bills. Over 20,000 consumers are part of this scheme.

Despite the potential savings or rebates that consumers may receive, Mendoza said that the application processes at the local government and electric cooperative levels remain inconsistent, with different processing times and requirements depending on your locality.

The inconsistent requirements remain an obstacle for adopters like Mendenilla, whose net-metering application has been pending for years.

Among the most important requirements to enroll in net metering is the Certificate of Final Electrical Inspection (CFEI) from the local government, which certifies that the electrical system complies with national standards. 

Once a potential net-metering system receives the CFEI, local power providers such as the Manila Electric Company (Meralco) will inspect the PV system and install their own meter for the system if they find everything in order. But some local government units (LGUs) require other documentation such as building permits and electrical work permits.

“The bottleneck isn’t the technology or the supply of panels — there’s actually a global oversupply right now,” Alex says. “It’s the bureaucracy. If it’s not easy, people won’t do it. It’s human psychology.”

However, Mendoza noted that the Energy Regulatory Commission (ERC) has one-stop-shop partnerships with several local governments such as Pasig City in order to streamline the process

Coherent industry, better opportunities

For Mendoza and Ebora, uniting the industry is a key step in making it easier for Filipinos to adopt solar PV systems. 

Ebora said that New Energy Nexus is dedicated to helping installers congregate and form associations by arranging community meetups between local installers and suppliers called Solar Community Meetups.

“Kasi kung meron silang association (Because if they have an association), they can act as checks to each other. They can audit each other. They can audit their work, and they can address the common problem of price wars,” he said.

New Energy Nexus is also helping installers gain the business and marketing skills they need to find potential clients through their Solar Innovation Program. Installers are taught how to market their business on social media and laymanize their business pitches to clients.

On the government’s side, Mendoza and Ebora believe that the ERC can further standardize the net-metering application process to make it easier for consumers to apply for the program.

Ebora also believes the government can still offer more incentives to end-users to adopt solar PVs in their homes.

Resilient communities

Despite the obstacles he encountered as a solar PV system owner, Mendenilla recommends Filipinos to have solar PV installed in their homes. Even without a battery to store power for the nighttime, a home powered by solar is less reliant on the national grid, which is often strained by increasing demand.

“If 10,000 houses install a 5kW system, you’ve essentially built a 50-megawatt power plant without needing the massive land or capital a traditional plant requires,” he said.

By freeing capacity on the main grid, widespread adoption of residential solar could reduce overall demand on supply and theoretically even reduce power costs. This is key for a country like the Philippines, which has the second-highest power rates in Southeast Asia.

Both Mendoza and Ebora echo Mendenilla’s statements and they hope that a coherent solar industry with a strong foundation can ultimately build more resilient communities.

“Because centralized systems have bigger points of failure, right? But if we decentralize the approach… solar can go to those provinces and underdeveloped parts of the country, generating local jobs, improving local economies, and improving local power resilience,” he said.

Ebora also believes that solar energy can also power communities that are currently outside the grid. He recalled how New Energy Nexus helped install a solar PV system in an off-grid barangay health center, which helped improve the delivery of basic healthcare services.

“The barangay captain said that they used to send the vaccines somewhere else because there was no electricity in their area. And if they needed a vaccine, they still needed to go somewhere far. Now that there is solar, they can store the vaccine in their barangay. People in the barangay don’t need to travel whenever they need a vaccine,” he said in Filipino.

“So I would say in the Philippines, for these remote islands, remote mountainous communities, the best way is to provide them with solar (power).” – Rappler.com