Regulatory, Technical Hurdles Affect PHL Solar Adoption

The Philippines’ residential rooftop solar market is grappling with inconsistent and costly permitting rules, slowing adoption and spurring unregulated installations, energy experts said at Solar & Storage Philippines Live 2025.

Cristina Alfonso, economist at the Philippine Solar and Storage Energy Association (PSSEA), said the absence of a standardized permit structure across local government units (LGUs) is driving up costs and deterring investment.

“For the same 520-kilowatt peak project, one company paid PHP 153,000 in Rizal but only PHP 16,000 in Laguna,” Alfonso said. “Without a nationwide policy on fee schedules, LGUs rely on their own resolutions to set prices, leading to confusion and delays.”

Alfonso said that inconsistent documentation—ranging from building permits to electrical plans and occupancy certificates—adds further obstacles for both developers and homeowners, some of whom lack access to historical property documents.

Informal Installations Rise

Amid the red tape, some residents are opting to bypass the system entirely by installing solar panels without government registration, raising safety concerns.

“These guerrilla installations are not registered with the DOE or the ERC, and they pose real execution risks to service crews working on the lines,” Alfonso warned.

Because these systems operate outside official inspections, they may lack proper electrical safeguards, increasing the risk of faults or fires.

Alfonso proposed the creation of a national decree detailing required permits and the installation of dedicated solar permitting desks within LGUs to streamline the process.

“This should be inscribed in a guidebook to be disseminated across all LGUs,” she said. “And area-specific permits must be justified in writing by the issuing LGU.”

She also suggested introducing an award system to incentivize LGUs based on the volume of completed solar projects per year.

Baseload Gaps Remain

Even as interest in renewables grows, technical and commercial limitations continue to hinder solar energy’s role as a 24/7 baseload power source.

“Whether wind and solar PV are suitable for generating baseload is still very controversial,” said Rieanne Velasco, Southeast Asia Technical Leader for Solar and BESS at Bureau Veritas. “But when paired with a battery, potentially this concern can be addressed.”

Velasco cited solar’s low capacity factor—just 20% to 24% compared to coal’s 50% and nuclear’s 90%—and the inability of inverter-based plants to stabilize the grid during outages.

She also noted that battery and PV systems have shorter operational lives and higher maintenance costs than traditional energy sources.

However, Velasco said battery prices have dropped 40% in 2024 due to global oversupply, falling material costs, and increased adoption of lithium iron phosphate (LFP) batteries.

“These price drops, along with improvements in manufacturing and next-gen tech like silicon and lithium metal anodes, could significantly reduce costs in the next decade,” she said.

Despite these gains, the Philippines still lacks a capacity market and robust financial incentives for energy storage systems, making them harder to scale.

“Storing renewable energy, specifically solar, might seem like a complex process at first,” Velasco said. “But as we gradually overcome these challenges, the long-term benefits can really make a difference for the industry and the environment.”

C&I Sector Struggles

Battery energy storage systems (ESS) are also becoming vital in the commercial and industrial (C&I) sectors, where power quality and uptime are crucial.

Colin Steley, CSO Director at Stratcon, said while solar offers cheap electricity, it can compromise power quality, which batteries can correct.

“Batteries have the ability through the inverters… of cleaning out the power quality,” Steley said. “That does allow it to go into facilities that demand high power quality like data centers.”

Data centers, hospitals, and manufacturing plants all require uninterrupted electricity, and even minor power disruptions can incur significant financial losses.

“If for whatever reason one or two coal power stations go offline… that will mean that certain areas will have brownouts and blackouts,” Steley said. “And in terms of the monetary value for those facilities going offline, that’s huge.”

BenJeMar-Hope Flores, Head of ESS Services and Solutions at Nascent Technology Corp., said ESS offers benefits beyond backup power.

“It’s resilience, reliability, especially for these crucial facilities,” Flores said.

Yet adoption remains slow due to vague revenue models and limited government support.

“The incentives now are more indirect, like importation incentives… So there’s not much on the revenue side or revenue options for C&I,” Flores said.

Mike Mayandoc said investor interest hinges on well-defined business models.

“I think it all comes down to the use case for these batteries to become feasible for investors to even take a glance and look at these projects,” he said.

Panelists proposed “value stacking”—combining services like frequency and voltage regulation, peak shaving, and backup—as a way to unlock investment.

Programs such as the Retail Aggregation Program (RAP) could support ESS rollout, but clear guidance from the Energy Regulatory Commission (ERC) is still needed.