Amid dipping power reserves, gov't mulls higher installation cap for solar projects means BUSINESS

MANILA - The government may allow a bigger number of solar power facilities to enjoy tariff incentives on account of the large number of proponents of such renewable energy projects.

Pedro H. Maniego Jr., National Renewable Energy Board (NREB) chairman, said its recommendation for the next set of installation targets for renewable energy sources will be submitted to the Department of Energy (DOE) before the month ends.

Besides giving "green" power sources a shot in the arm, an increase in the installation cap will help "address projected shortages due to increased demand and maintenance of existing power plants,” Maniego told

The Luzon grid in recent days has seen its reserves go down as power plant shutdowns combine with the scheduled maintenance of the Malampaya natural gas platform. This same confluence of events triggered a spike in prices at the Wholesale Electricity Spot Market (WESM) late last year, bidding up consumer bills by a record.

NREB is the body tasked by the Renewable Energy Act of 2008 to recommend policies, rules and standards to govern the implementation of the law, which granted fiscal and non-fiscal incentives to renewable energy projects.

The installation targets are the ceilings for each type of renewable energy, such as solar, wind, biomass and mini-hydro that may qualify for feed-in-tariff (FIT) incentives. The DOE set the cap to ensure the security of the power grid and electricity rates, given the intermittent and high cost of power generation from such sources compared with conventional plants. 

The FIT is the per kilowatt-hour rate that will be guaranteed to renewable energy developers to ensure the viability of their projects. Consumers will shoulder the tariff through a new line item in their electricity bills.

"We are still waiting for the proposals from the renewable energy developers and the guidelines from DOE on the possible increase of the installation targets. We will have a meeting with the developers and [the department] in April 24 to come up with our recommendations," Maniego told

However, "preliminary discussions with DOE indicated possible increase for solar," he said.

The DOE initially set the installation cap at 750 megawatts (MW) divided among run-of-river hydro with 250 MW; biomass, 250 MW; wind, 200 MW; and solar, 50 MW.

Mario C. Marasigan, DOE Renewable Energy Management Bureau director, said solar and wind projects being put up or proposed by developers have already breached their respective caps.

"Ang target natin for solar is only 50-MW and yet ang alam natin more than 50 MW na yung constructed. Naghihintay na lang tayo ng commissioning. Wind, ang target natin 200 MW but more than 300 MW ang under construction," Marasigan said.

"We might be seeing those installations by July, September or at most November we will see some capacities online,” he said.