Solar Bracing For FIT Reduction

Manila Bulletin

By MYRNA M. VELASCO

June 26, 2012, 6:07pm

MANILA, Philippines --- The feed-in-tariff (FIT) for solar technology to be approved by the Energy Regulatory Commission (ERC) will likely be lower than what was applied for by the National Renewable Energy Board (NREB), sources from the industry have tipped off.

Nevertheless, the industry regulator is reportedly setting in place a “cost-balancing scheme” for solar developers via the net metering program so investors would still be enticed to cough up capital despite a lower-than-expected FIT.

In the net metering scheme, solar developers would be able to sell their surplus generation vis-à-vis the capacity that they will be allotting for their own use.

The FIT ruling for various RE technologies is expected to be out this July. The rules on net metering as well as the revision on the FIT Rules are also anticipated to be issued soon. ERC executive director Francis Saturnino Juan has explained that the July timeline for the issuance of the FIT ruling “is ours. The hearings were finished April. The 90-day period to evaluate ends sometime July.”

Of all the calculations made on various technologies, it was deemed that the P10.37 per kWh for wind; and those on hydro at P6.15 per kWh as well as biomass at P7.00 per kWh are better aligned with the imposed tariffs of other countries.

“Solar developers are re-assessing the economics if the FIT will be reduced. They’re looking at the viability of P12 per kWh or lower … at that rate, it might still be difficult for them,” a source from NREB has pointed out.

It must be noted that the proposed starting FIT of P17.95 per kWh had drawn intense opposition from Joint Congressional Power Commission co-chair Senator Sergio Osmena III, as he intimated that he is only amenable to a FIT of P10 to P12 per kWh.

Solar developers later on manifested that they can compromise for a reduced FIT of P15.22 per kWh, with allowance for 10-percent reduction if solar prices will continue to skid.

Given the continuous slide in solar photovoltaic (PV) prices in the past months, however, regulators are still cautioned on their approval of the FIT rate for the technology.

Investments in RE projects already faced delays so it remains to be seen if the country would still be able to corner its share of capital in this area.     source