SESEA 2014: Opportunity abounds in the Philippines as solar undercuts diesel

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On the second day of Solar Energy Southeast Asia in Bangkok this week, multiple speakers hailed solar’s growing competitiveness with the current dominant fuel source, diesel, paving the way for deployment of hybrid solar systems.

“Solar is at parity” with diesel in the Philippines, said Tetchi Capellan, founder of the Philippine Solar Alliance and managing director of local installer, Solarus Partners.

The annual net savings from installing solar is above the Philippines’ feed-in tariff rate from year one, with US$50,000 net savings annually, a figure which “quadruples” over the 20-year lifespan of solar hybrid installations, said Capellan.

“Solar today is competitive with diesel,” agreed Deepak Verma, managing director of nv vogt, which is developing a PV project in the Philippines to offset diesel generation.

Verma said that because solar energy cannot meet evening peak energy use, it could only offset diesel use, rather than completely replace it. Nevertheless he said that with 40% of peak energy generated by diesel today in the Philippines, just displacement of peak energy use creates an 800MW opportunity for solar energy.

Wuthipong Suponthana, founding member of the Thai Solar Club and managing director of hybrid system specialist, Leonics, told PV Tech that “there is no return on diesel”, whereas solar has a return on investment (RoI) in “four to five years”.

Diesel is around US$1.00 per litre, which is much higher than the national tariff for solar at US$0.22 per kWh. However, local partners are needed in the Philippines to aid in licensing and installations for hybrid installation, said Suponthana, adding that Leonics is looking to partner with local solar contractors, while providing finance and technology. “There is high potential for the Philippines to become a focus country,” Suponthana said.

Suponthana said Leonics is looking to install, ideally, a 200MW hybrid mini-grid in the Philippines, training locals to ensure operations and maintenance.

Capellan said that most islands that have electricity in the Philippines only have electricity for a few hours; solar-diesel hybrids can provide electricity 24 hours a day, he said.

Due to the Philippines’ archipelago geography, formed of thousands of islands, there is no centralised grid but diesel generators instead, which Capellan said are “perfect for transitioning to solar off-grid hybrid solutions, due to the rich solar resource”.

Booming economic and population growth in the Philippines mean there is growing demand for energy, providing a plenty of opportunities for solar. And the high demand is complemented by generally high levels of public awareness of the effects of climate change due to extreme weather events that have repeatedly hit the Philippines. Because of this “the government is committed to renewables”, said Capellan.

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