Impacts of Distributed Photovoltaic Adoption in the Philippines

While the potential for distributed solar photovoltaic (DPV) in the Philippines is great, adoption is still low. A study's results— published in a report, Distributed Photovoltaic Economic and Technical Impact Analysis in the Philippines—find that policy revisions may have minimal impacts on DPV adoption under most scenarios.

This report was published to enable decision makers to better understand how policy revisions may impact DPV investment opportunities, utility revenue and tariffs, and the grid. Its analysis focused on three areas: customer economic impacts, utility revenue and retail tariff impacts, and technical impacts on the distribution grid.

The study found that the compensation mechanisms examined in the analysis (net metering and two forms of net billing) contribute to the economic viability of DPV, with net metering offering the greatest benefit to customers. Financing availability and permitting were additional factors affecting customer economics.

Utility revenues were not found to be impacted by DPV in the short term. Retail tariffs are projected to marginally increase per 500 MW of DPV, with the greatest cost implications for residential customers.

The technical analysis found that some existing grid code specifications are not suited for DPV, and that the location of DPV on the grid contributes to how much DPV penetration is enabled before violating grid code requirements. DPV could potentially reduce peak demand, but because of other limitations, needed investments in distribution systems would not be offset.

Stakeholder feedback also indicates that grid integrity, limited financing options, complex permitting, and lack of standardized installation practices are also concerns. 

The study is a collaboration between the Philippines Department of Energy, the U.S. Agency for International Development (USAID,) Clean Power Asia program, NREL, and Lawrence Berkeley National Laboratory.