Solar 45% cheaper than gas in the Philippines, report finds

Solar power already costs 45 percent less than gas in the Philippines, the widest gap among five major Southeast Asian economies that are nonetheless planning nearly 49 gigawatts of new gas capacity, according to a new analysis by research group Zero Carbon Analytics (ZCA).

The findings matter for consumers because power plants typically operate for decades, and the cost of the fuel they burn is eventually passed on to households and businesses through electricity bills. ZCA warned that Southeast Asia risks locking its power systems into increasingly uncompetitive gas infrastructure as solar becomes cheaper and major corporations buy more renewable electricity.

The briefing, released Oct. 1, covers gas capacity in pre-construction or construction across Indonesia, Malaysia, Thailand, the Philippines, and Vietnam. That capacity could generate around 263 terawatt-hours of electricity a year.

The analysis draws on gas capacity data from Global Energy Monitor’s Global Oil and Gas Plant Tracker.

Solar’s widening cost advantage

ZCA found that generating the same amount of electricity from solar would cost approximately USD 45.4 billion less, as the cost of solar drops below that of gas.

Across the five countries, solar electricity was already 40 percent cheaper than gas on average in 2025, according to ZCA’s analysis of data from BloombergNEF and the International Energy Agency. The gap is projected to widen to 59 percent by 2030.

Philippines posts the widest gap

The Philippines has the widest cost gap between solar and gas among the five countries. In 2025, solar electricity cost an average of USD 54 per megawatt-hour, compared with USD 99 per megawatt-hour for gas, making solar around 45 percent cheaper.

The gap is expected to widen by 2030, when solar electricity could be 60 percent cheaper than gas electricity in the Philippines.

Wind is also becoming more competitive with gas. Onshore wind is projected to become cheaper than gas power in Indonesia, Vietnam, and the Philippines by 2030.

Gas prices also tend to move with global fuel markets, and the Philippines has been turning to imported liquefied natural gas as output from the domestic Malampaya field declines.

Corporations turn to renewables

Some of the region’s biggest electricity consumers are moving away from gas and toward renewables. Corporations across all five economies have recently signed agreements to procure renewable electricity, particularly technology companies seeking clean power for rapidly expanding data center operations.

Between 2025 and 2026, Microsoft Indonesia signed an agreement with PT PLN to procure 200 megawatts of renewable electricity, including 100 megawatts of solar.

Google secured 1 terawatt-hour of solar electricity for its Malaysian data centers.

Samsung Electronics signed Vietnam’s first grid-based direct power purchase agreement to procure 70 gigawatt-hours of solar electricity.

Companies in the Philippines and Thailand have also recently signed clean-power agreements.

Policy changes open the door

ZCA said the agreements were enabled by policy changes over the past few years that made it easier for businesses to buy renewable electricity directly.

In 2026, Vietnam allowed data centers and electric vehicle charging stations to buy green power directly.

In the same year, the Philippines lowered the Retail Competition and Open Access demand threshold to 100 kilowatts, expanding electricity choice and cleaner power options to mid-sized businesses and residential groups.

In 2024, Malaysia allowed corporate green consumers to buy renewable energy directly from producers.

Thailand approved a 2,000-megawatt pilot program allowing data centers to buy renewable electricity directly from producers for the first time.

Call for governments to act

“Energy policy has yet to catch up to where the market is going. Businesses are increasingly choosing renewable electricity, showing that business leaders recognise the economic and energy-security benefits of the clean energy transition, even as major ASEAN governments continue to plan tens of gigawatts of new gas,” said Yu Sun Chin, senior Asia regional researcher at ZCA.

“These are strong signals for governments to prioritise renewable energy scenarios in their power development plans, rather than locking in new gas infrastructure. The economic case for gas is becoming harder to justify as projects face volatile fuel prices and rising costs, while renewable power continues to become more competitive,” Chin added.

Executives expect price stability

A recent poll commissioned by the Global Renewables Alliance, E3G, and the We Mean Business Coalition found that 88 percent of business executives surveyed across 18 countries, including the Philippines and Indonesia, expect a renewables-based electricity system to help stabilize energy prices against shocks.

More than three-quarters, or 77 percent, said businesses should prioritize replacing fossil-fuel-powered equipment with electric alternatives over the next decade.

Another 63 percent said their countries need to shift away from fossil fuels by 2035.