High power costs shorten solar payback

High electricity prices in the country are making rooftop solar increasingly economical for households and businesses, shortening the time needed to recover investments as consumers seek relief from costly grid power.

Tetchi Capellan of the Philippine Solar and Storage Energy Alliance and the Asian Photovoltaic Industry Association (APVIA) said on Monday that rising electricity prices have brought the payback period for residential rooftop solar to about four years and commercial installations to around three years.

For industrial users, the payback period has fallen to 3.1 years from 3.9 years.

“As the delegates from ASEAN countries convene in Manila under the 26th energy business forum, the Asian PV Industry Association, or APVIA, calls on policymakers and regulators for a re-examination of the current electricity system.

The rise in electricity prices has reduced the payback time for residential rooftop solar to 4.0 years; for commercial rooftop to 3.0 years; and for industrial rooftop from 3.9 years to 3.1 years,” she said.

The improving economics of solar comes as the Philippines has the highest residential electricity price in Southeast Asia. Its commercial electricity price is the region’s second highest, while its industrial rate ranks third.

Capellan said these costs have encouraged more homeowners and businesses to turn to rooftop solar as an alternative source of electricity.

Data tracked by the Institute for Climate and Sustainable Cities (ICSC) through satellite imagery showed about 721 megawatts (MW) of rooftop solar capacity last year, including around 371 MW from residential installations and 214 MW from commercial and industrial facilities.

Separate generation data culled from the Independent Electricity Market Operator of the Philippines indicated that the country added around 600 MW of rooftop solar capacity in 2026.

This suggests total rooftop solar installations in the Philippines could already be around 1,300 MW.

Still, installed capacity represents only a fraction of the country’s available rooftop space. ICSC estimates Philippine rooftops could support as much as 106 gigawatts of solar panels.

Capellan said cheaper solar could allow households and businesses to reduce electricity expenses while helping the government curb gas imports, subsidies and fiscal costs and avoid the need for additional coal-fired power plants.

Other Southeast Asian economies are also pushing rooftop solar as part of their energy strategies.

Vietnam has targeted the solarization of at least 10 percent of government building rooftops, while its trade ministry has proposed a roughly $1.6-billion package covering 14 million households and systems with battery storage.

Thailand’s proposed 2026 power development plan targets 10 gigawatts (GW) of household rooftop solar, while Indonesia has set a 5.7-GW rooftop solar target.

APVIA said rooftop solar policies across the Philippines, Thailand, Vietnam and Indonesia could help around 20 million households and small businesses manage high electricity costs while strengthening power grids and supporting emissions reduction.