Gov’t Urged to Establish Community Solar Programs to Boost RE Share (Part 3)

By Rjay Zuriaga Castor and Joshua Mendoza

As the Philippine government sets ambitious renewable energy (RE) targets, community solar programs could play a pivotal role in achieving these goals and ensuring energy security.

This was the recommendation of the Institute of Climate and Sustainable Cities (ICSC), a Philippine-based non-governmental organization that focuses on advancing climate resilience and low-carbon development.

In a statement to Daily Guardian, the ICSC stressed that since solar power is a growing component of the country’s RE mix, a community solar program could help several households that could not afford to own individual RE systems.

A community solar program is a model that allows multiple individuals, households, or businesses to subscribe to a portion of the energy generated by a community solar array, which is usually located in a central area like a field.

How community solar works like

The program typically has no upfront costs for subscribers, as they do not own the solar panels but receive credits on their electricity bills for their share of the energy produced.

Subscribers can also adjust their participation levels based on their energy needs, making it suitable for growing businesses or households.

Peak Power, an Iloilo-based solar power service provider, estimates the cost of a 3-kilowatt (kW) solar panel system at PHP 120,000 to PHP 150,000, while systems with battery storage cost between PHP 180,000 and PHP 200,000.

ICSC emphasized that community solar programs could mitigate such high costs for low-income families.

The institute also pointed out that those who rent and live in multi-unit buildings do not have the privilege to restructure their rooftops where solar panels are usually placed.

“Community-based solar initiatives would enable small-scale users to collectively invest in and benefit from renewable energy projects, even if they cannot install individual systems,” ICSC said.

It noted that these solar systems could be built on barangay halls, gymnasiums, and other public areas with the guarantee that its benefits could be distributed equitably across shareholders.

Community solar and net-metering

ICSC also emphasized that community solar programs will make net-metering more inclusive and accessible to marginalized communities.

Net metering is an electricity billing mechanism that allows consumers who generate their own electricity, typically through solar power, to use that electricity whenever needed and export any excess to the grid.

“One of the biggest misconceptions about net-metering is that it requires high upfront costs for individual rooftop solar installations, making it inaccessible to many households,” ICSC explained.

“While it’s true that installing a personal solar energy system can be expensive, net metering does not have to be limited to individual setups,” the institute added.

ICSC stressed that community solar projects offer a viable alternative, allowing multiple households to share the benefits of a single solar installation without the need for individual investments.

This model also makes RE accessible to renters, low-income families, and those without suitable rooftops.

Incentivize, streamline the process

ICSC believes that with right policies and programs for net-metering, alongside other RE policies and programs, could help address the country’s energy issues of affordability and security, as more distributed energy sources enter the system.

The institute suggested implementing policies that incentivize net-metering through tax credits, grants, and simplified permitting processes.

“Streamlining the application and approval processes for net metering would make it easier for small-scale users to participate and benefit from the program,” ICSC said.

Currently, only Pasig and Iloilo City, have entered into tripartite agreements with the Energy Regulatory Commission and their respective distribution utilities (DU) to promote RE and enhance net-metering programs.

Specifically, the agreements facilitate easier access to net-metering services, improve public awareness, and support the national goal of increasing RE use.

Since 2020, MORE Electric and Power Corp. (MORE Power), Iloilo City’s DU, has received 500 net-metering applications.

Neil Parcon, head of the Corporate Planning & Regulatory Affairs Department of MORE Power, said the agreement streamlined the process by centralizing it in one location at MORE Power’s office in Hotel del Rio.

‘I guess it’s quite fast… Right now, there’s no clamor for any delays or anything.  We made it so smooth that there’s no existing complaint with respect to the implementation,” Parcon attested.

For Joseph Teruel, general manager of Peak Power, there are two ways to improve the process.

“There are two ways. First, is the requirements for the application requirements. If they can reduce it, minimize it, make it simpler. Then lastly is the cost of repeat. If they can equate it with the cost of purchase, that would be really ideal,” he said.

The ERC is currently studying amendments to the net-metering rules for renewable energy to enhance transparency, accountability, and simplify the implementation of net-metering processes.

Among the proposed key amendments include the transfer of net-metering credits when property ownership changes, voluntary installation of Renewable Energy Certificate meters, and requiring DUs to display detailed breakdowns of their generation charges and hosting capacities on their websites.

GEOP expansion pushed

ICSC also called for the expansion of the Green Energy Option Program (GEOP) to small-scale users, providing them with RE options currently available to larger consumers.

 

GEOP allows eligible electricity end-users to choose renewable energy as their source of electricity. To be eligible for GEOP, end-users must have a monthly average peak demand of at least 100 kW for the past twelve months.

However, the current requirements naturally favor larger consumers, such as industrial or commercial entities, which typically have higher energy demands. Smaller households or businesses usually do not meet these thresholds.

“The current policies create a distinct difference between small-scale and large-scale users, particularly in terms of accessibility and benefits,” ICSC said.

The institute added that while large-scale users enjoy significant energy savings and reduced operational costs, small-scale users remain dependent on DUs.

The upfront costs and logistical challenges of installing RE systems are also often prohibitive for small-scale users.

“This disparity highlights a gap in the current policy framework, where large-scale users enjoy greater flexibility and financial incentives, while small-scale users face barriers to adopting renewable energy solutions,” ICSC stressed.

(This is the last part of a three-part story.) 

PART 1: In Iloilo City, residents turn to renewable energy – but at a cost

PART 2: How Iloilo City’s Solar Users Sell Power Back to the Grid

Reporting for this story was supported by the Institute for Climate and Sustainable Cities under the Jaime Espina Klima Correspondents Fellowship.