Abstract
The Philippines is an emerging solar photovoltaic (PV) market, installing ∼1 GW in the span of last 2 years. This growth was enabled by the enactment of supporting policies: feed-in-tariff (FIT) and net-metering (NM), despite increasing criticism on the latter. This study addresses the terms, conditions and effectiveness of these policies reflected as the interannual growth in PV power production with respect to the potential realizable capacity in the country. Additionally, a life cycle cost and greenhouse gas (GHG) emission reduction analysis is presented to demonstrate the economic viability and environmental impact of implementing an on-grid residential PV installation in the country – in the context of these policies. Financial results showed that theoretical 100 kW-FIT/1.89 kW-NM PV projects were attractive and would lead to a GHG emission reduction of 102.9 tC0 2 e and 1.9 tC0 2 e, respectively. The FIT case had a Net Present Value (NPV) of PHP 4.7M (∼EUR 84k), a benefit-cost ratio of 4.17, and a simple payback period of 4.1 years. Net-metering had a positive NPV of PHP 27k (∼EUR 482), a benefit-cost ratio of 1.50, and a simple payback period of 7.8 years. The main profitability drivers were found to be the initial capital cost for FIT and the avoided retail electricity costs for NM. Project development can be further promoted by providing financial grants on top of FIT/NM and by modifying high-risk conditions such as FIT's “first-come-first-served” basis. The theoretical minimum viable FIT Phase 3 rate was also calculated to be 4.20 PHP/kWh (∼0.07 EUR/kWh).
| Original language | English |
|---|---|
| Pages (from-to) | 45-56 |
| Number of pages | 12 |
| Journal | Journal of Cleaner Production |
| Volume | 223 |
| DOIs | |
| Publication status | Published - Jun 20 2019 |
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Keywords
- Feed-in-tariff
- Net-metering
- Philippines
- Policies
- RETScreen
- Solar PV
ASJC Scopus subject areas
- Renewable Energy, Sustainability and the Environment
- Environmental Science(all)
- Strategy and Management
- Industrial and Manufacturing Engineering
Cite this
Solar photovoltaic policy review and economic analysis for on-grid residential installations in the Philippines. / Farias-Rocha, Ana Paula; Hassan, Karim M.Kamel; Malimata, Jesselyn Rochelle Rodriguez; Sánchez-Cubedo, Griselda Adilene; Rojas-Solórzano, Luis R.
In: Journal of Cleaner Production, Vol. 223, 20.06.2019, p. 45-56.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Solar photovoltaic policy review and economic analysis for on-grid residential installations in the Philippines
AU - Farias-Rocha, Ana Paula
AU - Hassan, Karim M.Kamel
AU - Malimata, Jesselyn Rochelle Rodriguez
AU - Sánchez-Cubedo, Griselda Adilene
AU - Rojas-Solórzano, Luis R.
PY - 2019/6/20
Y1 - 2019/6/20
N2 - The Philippines is an emerging solar photovoltaic (PV) market, installing ∼1 GW in the span of last 2 years. This growth was enabled by the enactment of supporting policies: feed-in-tariff (FIT) and net-metering (NM), despite increasing criticism on the latter. This study addresses the terms, conditions and effectiveness of these policies reflected as the interannual growth in PV power production with respect to the potential realizable capacity in the country. Additionally, a life cycle cost and greenhouse gas (GHG) emission reduction analysis is presented to demonstrate the economic viability and environmental impact of implementing an on-grid residential PV installation in the country – in the context of these policies. Financial results showed that theoretical 100 kW-FIT/1.89 kW-NM PV projects were attractive and would lead to a GHG emission reduction of 102.9 tC0 2 e and 1.9 tC0 2 e, respectively. The FIT case had a Net Present Value (NPV) of PHP 4.7M (∼EUR 84k), a benefit-cost ratio of 4.17, and a simple payback period of 4.1 years. Net-metering had a positive NPV of PHP 27k (∼EUR 482), a benefit-cost ratio of 1.50, and a simple payback period of 7.8 years. The main profitability drivers were found to be the initial capital cost for FIT and the avoided retail electricity costs for NM. Project development can be further promoted by providing financial grants on top of FIT/NM and by modifying high-risk conditions such as FIT's “first-come-first-served” basis. The theoretical minimum viable FIT Phase 3 rate was also calculated to be 4.20 PHP/kWh (∼0.07 EUR/kWh).
AB - The Philippines is an emerging solar photovoltaic (PV) market, installing ∼1 GW in the span of last 2 years. This growth was enabled by the enactment of supporting policies: feed-in-tariff (FIT) and net-metering (NM), despite increasing criticism on the latter. This study addresses the terms, conditions and effectiveness of these policies reflected as the interannual growth in PV power production with respect to the potential realizable capacity in the country. Additionally, a life cycle cost and greenhouse gas (GHG) emission reduction analysis is presented to demonstrate the economic viability and environmental impact of implementing an on-grid residential PV installation in the country – in the context of these policies. Financial results showed that theoretical 100 kW-FIT/1.89 kW-NM PV projects were attractive and would lead to a GHG emission reduction of 102.9 tC0 2 e and 1.9 tC0 2 e, respectively. The FIT case had a Net Present Value (NPV) of PHP 4.7M (∼EUR 84k), a benefit-cost ratio of 4.17, and a simple payback period of 4.1 years. Net-metering had a positive NPV of PHP 27k (∼EUR 482), a benefit-cost ratio of 1.50, and a simple payback period of 7.8 years. The main profitability drivers were found to be the initial capital cost for FIT and the avoided retail electricity costs for NM. Project development can be further promoted by providing financial grants on top of FIT/NM and by modifying high-risk conditions such as FIT's “first-come-first-served” basis. The theoretical minimum viable FIT Phase 3 rate was also calculated to be 4.20 PHP/kWh (∼0.07 EUR/kWh).
KW - Feed-in-tariff
KW - Net-metering
KW - Philippines
KW - Policies
KW - RETScreen
KW - Solar PV
UR - http://www.scopus.com/inward/record.url?scp=85063259788&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85063259788&partnerID=8YFLogxK
U2 - 10.1016/j.jclepro.2019.03.085
DO - 10.1016/j.jclepro.2019.03.085
M3 - Article
AN - SCOPUS:85063259788
VL - 223
SP - 45
EP - 56
JO - Journal of Cleaner Production
JF - Journal of Cleaner Production
SN - 0959-6526
ER -