Release of feed-in tariff rate for solar energy sought

Sanyo Electric Co. Ltd. of Japan wants the Philippine government to fast-track the implementation of a feed-in tariff (FIT) system for solar energy projects to spur investments and development in renewable energy in the country.

Hiroyuki Kuriyama, division president of Sanyo Asia Pte. Ltd., said several parties had expressed interest in putting up solar projects but that the lack of definite policies and rate guarantees were preventing investors from pursuing the projects.

“All projects are waiting for the feed-in tariff rate,” Kuriyama told the Inquirer.

Sanyo Electric, a member of the Panasonic Group, is one of the world’s major providers of total solar energy solutions. Its solar modules are considered the most energy-efficient in the world.

The FIT rate is a key component of the country’s Renewable Energy Act, a law passed in 2008 intended to accelerate the development of solar, wind, geothermal, biomass and other alternative energy sources.

In July 2010, the Energy Regulatory Commission (ERC) came up with the rules for the FIT system.

Renewable energy developers have been waiting for the FIT system, which offers guaranteed payments on a fixed rate per kilowatt-hour for a period of 20 years for electricity produced from renewable energy sources.

The 20-year period is to ensure that the ensuing cost to electricity end-users will be spread out over a longer period and therefore will be lower.

Due to the high cost of harnessing solar energy, proponents have been reluctant to undertake their projects unless the government provides them with incentives such as the FIT.

Investors such as the Aboitizes and the Ayalas have expressed interest to put up solar power facilities in Mindanao, but are waiting for the FIT rates to be in place before going ahead with their plans.

The National Renewable Energy Board has already proposed a feed-in tariff rate of P17.95 per kilowatt-hour for solar-generated electricity.

The proposed rate was submitted to the ERC for approval in May this year. It was supposed to be released last October.

Kuriyama, however, said the release of the FIT has been postponed.

“It has been postponed and postponed again,” he lamented.

He said the delay might be caused by government budgetary problems.

Kuriyama said they expected investments in solar technologies to go up once the FIT was finally put in place.

Under the FIT system, solar energy developers are assured of future cash flow as electricity end-users will be charged fixed amounts to cover the production of solar energy.

With FIT in place, utilities can spread the cost of solar power among its customers. The system is thus expected to encourage investors to go into solar energy development and production as it ensures stable pricing.

But despite the absence of an FIT system, Sanyo has already implemented two solar projects in the Philippines. These include the 2-kilowatt power off-grid-hybrid Magallanes-Ligones solar project and a 2-kilowatt power residential project.

A basic 1-kilowatt system for residential customers costs about $4,000, including five solar panels and installation.

Kuriyama said they have received several inquiries for hybrid off-grid solar systems in the Philippines to address power outages.