Solar power seen competitive in 6 yrs

There would be no need for feed-in tariff (FIT) incentives for solar when prices of solar panels have gone down and the country would need to import more gas by 2022, making it competitive with other sources of power, the Philippine Solar Power Alliance (PSPA) said.

PSPA president Maria Theresa Capellan said solar players would need two more rounds under FIT until the technology becomes competitive by 2022 when the cost of solar panels would have gone down.

FIT is a set of incentives given to power developers for a period of 20 years to invest in the more expensive renewables sector.

“We project that solar plants would cost $1 million per megawatt ( MW) by 2022 and it will be lower by 2030,” Capellan said.

The cost of solar plants have already decreased from $1.6 million per megawatt in 2014 to $1.23 million in 2016, the PSPA official said.

By 2022, Capellan said the contract of the Malampaya deep water gas-to-power project is expected to expire, requiring the Philippines to import much expensive gas from other countries.

“If we import gas, the rate from gas-fired power plants, which are peaking plants, will increase. So this will translate to higher electricity rates, and solar will be competitive because we can sell at P5 per kilowatt-hour (kwh),” Capellan said.

The current FIT rate for solar is equivalent to P8.69 per kwh. In the first round, FIT for solar was P9.68 per kwh.

But before moving on to the third round of FIT for solar, government must first address the oversubscription in the previous round, Capellan said.

The PSPA has submitted a position letter to Energy Secretary Alfonso Cusi to resolve the oversubscription and the awarding of FIT.

In the letter, the group raised concerns over two issues such as some solar companies were given a slot in the 500-MW solar allocation but their dispatch is not equal to what was awarded and some were given the FIT award even if their plants dispatched power to the grid beyond the deadline.

“We were told they created a group… to conduct the investigation. They said the investigation will be finished in 45 days, maybe by the end of October,” Capellan said.