The heat of the sun is scorching the era of oil and coal in the Philippine energy sector.
A host of factors, including reduced prices of solar panels, new government policy and growing reliability of solar power plants are leading the shift to renewable energy.
The time for solar energy has come, according to Ferdi Raquelsantos, an auto parts pioneer and electric vehicle advocate who has been into solar energy for ten years now.
“Solar electric panel prices have gone down significantly in the past few years and finally, it is now affordable to households in the Philippines,” Raquelsantos said in a statement.
“Being one of the pioneer systems integrator for solar electric packages since 2007, we have seen how components and parts prices have gone down while solar energy technology continues to improve. Our own prices alone are now 83 percent lower than when we first started,” Raquelsantos said.
Raquelsantos said his company Solar & Wind Electric Power Inc. was selling complete solar energy system packages at reduced prices. “This is attributed to the reduced cost of solar electric panels and inverters. We sell two systems packages, the off-grid system [uses battery banks) and the grid-tie systems. The latter is the most common system installation,” he said.
“Several years ago, we only focused on the high-scale residential villages. But now, even [income] class C and D households are into solar energy,” said Racquelsantos.
“With whatever size of system you purchase, it will have an approximate product life of about 20 years. You will get your money back in about four years and the rest of the 16 years, your electrical power is free. It is funny considering that ten years ago, the systems package we sold has a payback period of 13.5 years due to the high cost of the systems then,” he said.
The government approved a 500-megawatt installation target for solar projects that could avail of feed-in-tariff rate of P9.68 per kilowatt-hour under the first round and P8.69 per kWh under the second round. Solar players, however, confirmed that actual production cost suddenly fell below P5 per kWh this year, making it comparable to other sources of energy.
Among the largest solar farms in the Philippines are the 132.5-MW solar farm in Cadiz City developed by Helios Solar Energy Corp. and Soleq Holdings Inc., the 63.3-MW Calatagan solar farm in Batangas built by Solar Philippines and the 45-MW Sacasol 1 solar farm in San Carlos City put up by San Carlos Solar Energy Inc.
Buildings and commercial centers also began drawing a part of their energy requirements from the sun.
Robinsons Starmills in San Fernando, Pampanga tapped Solenergy Systems Inc. to put up a 2.88-megawatt solar plant on its roof, making it the world’s largest solar-powered mall, beating SM Mall of Asia in Pasay City with 2.7-MW plant built by Solar Philippines and SM North Edsa with 1.5-MW facility also built by Solar Philippines.
Solar Philippines president Leandro Leviste said solar power costs dropped significantly in recent years, because of economies of scale, vertical integration, advances in technology and increased market maturity.
“Both the costs have gone down and efficiency has gone up, allowing new solar to sell at half the cost of the original tariff rate. Panel and other equipment costs were down 10 percent since last year. More economies of scale led the industry to grow, lowering construction and development costs. New technologies like trackers that follow the sun increase output by 20 percent and [there are now] higher efficiency solar panels,” Leviste said.
Leviste said price-wise, solar farms in the Philippines are now closer to the US and the Middle East, where solar production is now estimated at P2 to P3 per kWh. “In the Philippines, from P8 to P9 [before], we can now do below 5 per kWh,” he said.
“The problem is it takes time for this new reality to sink into the minds of power companies, but we are building projects to prove it and we are confident they will see the light,” Leviste said.
Leviste said with the latest developments in the solar energy sector, Filipino customers could now save nearly P100 billion a year from expensive gas, oil, diesel and coal.
“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,” Leviste said.
He said “remaking” the country’s source of power supply would be capital-intensive and could not be done by his 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.
Coal currently accounts for 51.1 percent of the country’s generation mix, followed by natural gas at 25.9 percent and geothermal at 12.38 percent. Other sources represent the balance.
Other industry players also believe that solar power could end the dominance of oil and coal as main sources of energy in the Philippines, sooner than expected.
A coalition of businesses, banks, environmentalists and civic groups, who attended the recent forum “The Truth About Solar: Now Cheaper Than Coal” signed a declaration of independence from fossil fuel and support for 100-percent renewable energy before 2030.
The event aimed to raise awareness that solar was already cheaper than fossil fuel and could supply a majority of the country’s energy.
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 said both solar and battery costs had fallen at an extraordinary rate, and were now starting to supply the needs of tropical countries such as 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 recently announced the country’s first local solar manufacturing plant and its plan to complete 500 MW of solar projects by 2017.
Participants in the forum acknowledged 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. These companies were urged to switch to solar now that it is cheaper than coal.
Even big businesses now believe in low-carbon economy. First Gen Corp. is leading the call to stop the construction of coal plants.
“These are extraordinary times that call for extraordinary change and everyone must shift to thinking about the fastest route to a decarbonized economy. It is our aim that First Gen, and its subsidiary companies, will be among the bright navigating stars of the Philippine energy industry, blazing a path toward a decarbonized economy. It will not be easy and we will have to explore many roads not taken but this is where opportunities will be created and won,” First Gen chairman Federico Lopez said.
With a few days left in his six-year term, President Benigno Aquino III surprised the energy sector when he signed Commission Resolution No. 2016-001 issued by the Climate Change Commission, prescribing an urgent and comprehensive review of the government’s energy policy to cut down the country’s dependence on coal and move to a low-carbon future.
CCC vice chairman Emmanuel De Guzman said the resolution was a major “step to steer the country away from coal and accelerate the transition to clean, renewable energy consistent with our efforts to fight climate change and pursue the development of a green economy.”
“We must aim for nothing less than the transformation of the Philippine economy with a low carbon energy development pathway,” De Guzman said. With Alena Mae S. Flores