The solar power industry has built up enough capacity to compete with conventional energy sources, including coal, experts said.
Solar Philippines Power Project Holdings Inc. (Solar PH) CEO Leandro L. Leviste said that even if utilities (such as Manila Electric Co. and electricity cooperatives) in areas with solar farms would conduct competitive bidding now, solar power would be competitive even against coal, perceived to be the cheapest energy resource provider.
Asked how solar power could compete under the Competitive Selection Process (CSP) being mandated by the government starting this year, Leviste said, “Solar power is competitive… I challenge the energy industry to bid out supply contracts and we can show that solar power can be supplied at around P4 per kilowatt-hour (kWh), or about the same level as coal,” Leviste said.
“The conventional wisdom is that solar is expensive and it will take decades more to be competitive. Yet last month, the world’s lowest prices for solar was set in a bidding in Dubai at P1.345 (peso equivalent) per kWh. Other bids were P1.575 per kWh in Mexico and P1.741 per kWh in the US,” Leviste said.
“These are the result of a 90-percent decrease in panel costs over the past decade, low interest rates and high levels of sunlight—making solar in those places significantly cheaper than fossil fuel in the Philippines, where coal averages at P4 per kWh, natural gas at P6 per kWh and diesel at P8 per kWh.
Yet those economies have even less sunlight than the Philippines, Leviste said.
Citing a study by Deutsche Bank, Leviste said the Philippines was seen globally as one of the most promising markets for solar power projects.
The local solar market has gained economies of scale, Leviste said. The Philippines had a total 4 megawatts (MW) of solar power in 2013, but installed capacity was estimated to have reached 900 MW by mid-2016. He said there was enough scale that his company could offer its solar-rooftop client SM Malls a fixed rate of power supply that is 30 percent cheaper than the commercial rate of Meralco.
Solar PH client SM City North has one of the world’s largest mall rooftop solar power installations with a capacity of 1.5MW (inaugurated in 2014). The installation is listed in the Philippines’ Wholesale Electricity Spot Market.
The power sector has already taken big steps toward more competition, particularly with the implementation of the CSP, according to the Energy Regulatory Commission (ERC).
The CSP requires all distribution utilities to conduct an open and competitive process in selecting the power generating company from whom they are to purchase their supply for the captive markets.
US solar power advocate Danny Kennedy, who has several businesses and is part of several non-profit organizations promoting solar power, said the technology could even become a source of baseload (24/7) source of energy, addressing concerns on grid instability, through the use of batteries to store excess solar power production.
Many countries around the world, Kennedy said, were becoming more focused on solar power production and weaning themselves away from coal.
Solar PH has a 63.3-MW solar farm project in Calatagan, Batangas province. The company is continuing to work on other solar farm projects and rooftop-installed projects, Leviste said.
Earlier, Energy Secretary Zenaida Y. Monsada said projects with a combined capacity of 292 MW qualified for DOE endorsement for FIT incentives.