Philippines Renewable Energy Market, By Type (Hydroelectric Power, Wind Power, Bioenergy, Solar Energy, and Geothermal Energy) and End Use (Residential, Commercial, Industrial, and Others), By Region, Competition, Forecast and Opportunities, 2028

Market Overview

The Philippines Renewable Energy Market, valued at USD 1.41 Billion in 2022, is poised for robust growth in the forecast period, with an anticipated Compound Annual Growth Rate (CAGR) of 1.20% through 2028. Renewable energy encompasses energy sources that are naturally replenished and sustainable over time, distinct from finite fossil fuels. It harnesses abundant resources like sunlight, wind, water, and organic matter, leveraging Earth's natural processes to produce usable power without depleting finite reserves or causing lasting environmental harm.

Solar energy captures sunlight via photovoltaic cells or solar thermal systems to generate electricity or heat. Wind energy harnesses kinetic energy from moving air through wind turbines, converting it into electrical power. Hydropower uses the gravitational force of flowing water to turn turbines and produce electricity. Biomass energy derives from organic materials like wood, crop residues, and waste, either burned or converted into biofuels for energy production. Geothermal energy taps Earth's internal heat, using underground steam or hot water to generate power. Renewable energy technologies offer multiple benefits, including reduced greenhouse gas emissions, improved air quality, and reduced dependence on fossil fuels. As technology advances and economies of scale improve, renewable energy plays a pivotal role in the global shift towards a more sustainable and resilient energy future.

Key Market Drivers

Drivers Shaping the Philippines' Renewable Energy Market

The Philippines' renewable energy market is influenced by various drivers that contribute to the growth, development, and adoption of clean and sustainable energy sources. These key drivers are shaping the renewable energy landscape in the Philippines

1. Energy Security and IndependenceThe Philippines aims to reduce its dependence on imported fossil fuels, enhancing energy security and mitigating the impact of volatile global fuel prices.

2. Environmental SustainabilityThe country is committed to reducing greenhouse gas emissions and addressing climate change. Renewable energy sources produce fewer emissions, aligning with international climate goals.

3. Government Policies and IncentivesThe Philippine government has instituted policies, such as the Renewable Energy Act of 2008, feed-in tariffs (FiTs), and incentives, to attract investments in renewable energy projects, creating a favorable regulatory and financial environment.

4. Feed-in Tariffs (FiTs) and Guaranteed RatesThe FiT system guarantees fixed rates for renewable energy-generated electricity, providing financial stability for investors and developers and encouraging project development.

5. Abundant Renewable ResourcesThe Philippines boasts plentiful renewable energy resources, including solar, wind, hydro, geothermal, and biomass, contributing to a diverse and sustainable energy mix.

6. Rural Electrification and Energy AccessOff-grid and decentralized renewable energy solutions are essential for providing electricity to remote and underserved areas, improving the quality of life for communities lacking reliable power access.

7. Economic Development and Job CreationRenewable energy projects drive economic growth by creating jobs in construction, operation, and maintenance, supporting local economies and communities.

8. Technological AdvancementsOngoing advancements in renewable energy technologies, energy storage, and smart grid systems enhance efficiency, affordability, and viability for widespread deployment.

9. Corporate Social ResponsibilityMany businesses and industries in the Philippines embrace renewable energy as part of their sustainability and corporate social responsibility initiatives.

10. International CommitmentsThe Philippines' participation in international agreements and initiatives promotes renewable energy development and environmental sustainability.

11. Public Awareness and SupportGrowing public awareness of renewable energy benefits and increasing demand for clean energy sources contribute to market expansion.

12. Diversification of Energy MixA diverse energy mix that includes renewables enhances energy resilience and reduces the risk of supply disruptions.

Supportive policies and Regulations are Likely to Propel the Market

The Philippines has implemented various supportive government policies and measures to drive the growth and development of its renewable energy market. These policies aim to attract investments, promote sustainability, and address energy security challenges. There are some key supportive government policies for the Philippines' renewable energy market drivers

Renewable Energy Act of 2008 (RA 9513)

Feed-in Tariff (FiT) System

Renewable Portfolio Standards (RPS)

Net Metering Program

Green Energy Option Program (GEOP)

Priority Projects List

Tax Incentives and Duty-Free Importation

Accelerated Depreciation of Renewable Energy Equipment

Strategic Environmental Plan (SEP) and Special Zones

Green Bonds and Financing Support

Renewable Energy Roadmap

International Commitments and Partnerships

Key Market Challenges

The Philippines' renewable energy market faces several challenges that can impact its growth and development. These challenges range from technical and regulatory issues to financial and environmental concerns. Here are some key challenges for the Philippines' renewable energy market

Intermittency and Grid Integration

Energy Storage Infrastructure

Policy and Regulatory Uncertainty

Project Financing

Land Use and Permitting

Transmission and Distribution Infrastructure

Dependence on Coal and Fossil Fuels

Technical Capacity and Workforce Development

Competition with Conventional Energy

Public Awareness and Acceptance

Environmental and Social Considerations

Global Economic Factors

Segmental Insights

Solar Energy Insights

The Solar Energy segment established its dominance in the renewables energy market in 2022 and is projected to maintain its position throughout the forecast period. The Philippines has a high solar irradiance level, particularly in its southern regions. This makes solar energy an attractive option for both utility-scale and distributed energy generation. Solar irradiance maps show that the country receives ample solar radiation, which can be harnessed for electricity production through photovoltaic (PV) technology. The Philippines has experienced significant growth in solar energy installations over the past decade. Numerous solar farms, commercial installations, and residential rooftop systems have been deployed. Solar energy capacity has been added to the national grid through various projects, contributing to the diversification of the energy mix. The government has implemented policies and incentives to encourage solar energy adoption. The Net Metering program, for instance, allows consumers to install solar panels and feed excess electricity back to the grid. The Green Energy Option Program (GEOP) empowers consumers to choose solar energy as their preferred energy source. Solar energy generation produces minimal greenhouse gas emissions and contributes to reducing the Philippines' carbon footprint, aligning with climate goals. Solar mini-grids and off-grid solar systems have been deployed to provide electricity to remote and underserved areas, improving energy access and quality of life.

Residential Insights

The residential segment established its dominance in the renewable energy market in 2022 and is projected to maintain its position

Regional Insights

Luzon, the largest and most populous island, is a significant contributor to the Philippines' renewable energy capacity. The island has a substantial number of hydropower projects, particularly in the Cordillera region. Wind farms are operational in provinces such as Ilocos Norte and Nueva Ecija, taking advantage of the strong wind resources along the coastline. The second largest region is named Visayas. The Visayas region has been actively developing renewable energy projects to address energy security and supply challenges. Solar installations are widespread, and solar farms have been established in various provinces like Negros Occidental and Cebu. The region is home to some of the country's geothermal power plants, tapping into the natural heat of the Earth's interior.

Recent Developments

• AC Energy's Renewable Energy ProjectsAC Energy, a leading renewable energy company in the Philippines, announced plans to invest in various renewable energy projects, including wind, solar, and hydroelectric power. They were actively pursuing partnerships and acquisitions to expand their renewable energy portfolio.
• Ayala Corporation's Clean Energy PushAyala Corporation, a prominent conglomerate, was focusing on clean energy investments, including solar and wind projects. They aimed to increase their renewable energy capacity and contribute to the country's sustainable development goals.
• Global Business Power's Solar ProjectsGlobal Business Power, a major power company, was reported to be investing in solar power projects in the Philippines. They were exploring opportunities to diversify their energy sources and contribute to the country's renewable energy targets.
• Equis Development's Renewable Ventures Equis Development, a renewable energy developer, was working on various projects in the Philippines, including solar and wind installations. Their investments were aimed at increasing the country's clean energy capacity.

Key Market Players

• Solar Philippines Power Projects Holdings Inc.
• Solenergy Systems Inc.
• Vena Energy
• Trina Solar Co. Ltd.
• AC Energy Corporation
• First Gen Corporation
• Solar Philippines Power Project Holdings, Inc
• Terra Solar