Exclusive: Philippines rooftop solar inquiries up tenfold since March

Interest in rooftop solar in the Philippines has surged since the Middle East conflict pushed electricity prices higher. That demand is ready to transform into a sector-wide boom if the financing and regulation fall into place, says Ping Mendoza, president of the Philippine Solar and Storage Energy Alliance (PSSEA). 

In July, the country recorded the highest electricity prices in Southeast Asia. Rooftop solar installers are now receiving eight to ten times as many inquiries as before that shock to energy markets, according to Mendoza. 

“I won’t even describe this year as the boom yet,” Mendoza told Energy Tracker Asia in Manila on the sidelines of the ASEAN Energy Business Forum. “Inquiries have really increased, but conversion still lags.”

Mendoza has worked in the Philippine solar sector since around 2014 and runs Yuda, a platform connecting customers with solar products and local installers. When he entered the industry, rooftop solar was largely a niche product for early adopters motivated by climate concerns or an interest in new technology. Systems typically took seven to eight years to pay for themselves.

Higher electricity tariffs and falling equipment and installation costs have since transformed the economics. A rooftop solar system can now pay for itself in two to three years.

Battery demand grows, but upfront costs remain high

Energy storage was once largely confined to off-grid or specialist installations. Mendoza said almost every household and small business now asks about it, particularly because many people are away from home during the day but run air conditioning and other appliances at night. A solar-plus-battery system can now pay back its cost in around five years, he said.

But storage also raises the upfront price considerably. In Mendoza’s example, a household quoted USD 4,000 for a solar system with a three-year payback may need to spend another USD 2,000 to add a battery. That additional cost puts the system beyond the reach of some households and increases the number of buyers who need financing.

Financing options are expanding, but unevenly. Mendoza pointed to the solar loan offered by the Government Service Insurance System (GSIS), which received more than 1,200 applications worth nearly PHP 400 million (USD 6 million) within 24 hours of its launch. He attributed much of that uptake to the GSIS app, which members already use for other services, making it easy to apply for and repay a solar loan. However, GSIS only covers government employees and pensioners, leaving private-sector workers outside the program.

Yuda, meanwhile, works with Sunfund, a venture-backed startup offering collateral-free loans, and First Circle, which provides financing for small businesses.

For private lenders to scale, Mendoza said, they need systems that can sign up customers efficiently, assess creditworthiness across the country and attract investors willing to take on different types of risk. Rent-to-own schemes and solar mortgages are also being tested, but he said it remains too early to tell which model will gain traction.

Rooftop solar panels in Metro Manila, Philippines. By Wendy Lo.

Rooftop solar adoption outpaces regulation

The government is also working to remove regulatory barriers. In July, President Ferdinand Marcos Jr. made the Sariling Kuryente Act a legislative priority. The proposed law would allow households and businesses to install solar and storage systems for their own use without having to meet requirements designed for commercial power producers. PSSEA participated in committee hearings on the measure.

But Mendoza said the market is moving faster than the formal permitting system. Net-metering data suggest that many early rooftop solar adopters never apply for net metering and therefore bypass parts of the permitting process altogether.

During the hearings, PSSEA argued that systems installed on private property should place greater responsibility for safety and technical compliance on property owners rather than rely on a rigid permitting process.

For many buyers, connecting solar to the grid is becoming less important, Mendoza said. Under a Department of Energy circular governing zero-export systems, households can store excess solar power in batteries rather than export it to the grid.

This is becoming an increasingly attractive option because net metering compensates households for exported electricity at a rate well below what they pay to buy power from the grid. By storing excess solar power for later use, households can avoid buying electricity at higher retail rates. At current battery prices, Mendoza said, this can make more economic sense than paying net-metering fees and meeting additional compliance requirements.

For the next 12 months, he believes the priority is therefore not another set of technical rules but greater transparency and traceability. International standards already cover much of the engineering behind solar equipment, he said. What the Philippines needs is a certificate or verification system showing that products comply with those standards and local import rules, alongside clearer public guidance on what constitutes a qualified installer.

Rooftop solar offers a hedge against LNG dependence

Beyond household electricity bills, Mendoza sees rooftop solar as a hedge against the Philippines’ dependence on imported LNG, which leaves consumers exposed to global price volatility, shipping disruptions and foreign currency outflows.

Mendoza also sees decentralized energy as a development issue. Expanding rooftop solar and storage outside the major cities could provide more reliable electricity for farms, small businesses and households, supporting economic activity in areas where power supply is less dependable.

But installers in the provinces are often undercapitalized, customer volumes can be unpredictable, and inter-island shipping costs and poor roads add to the cost of doing business.

With nationwide rooftop solar capacity estimated at just 700 MW to 1.3 GW, there remains considerable room for growth. Mendoza sees the next 8 to 12 months as a critical window for the industry. As campaigning for the 2028 national elections gathers momentum, electricity affordability and energy security could become increasingly prominent political issues.

Solar energy has never been a campaign issue in the Philippines, he said, but electricity prices could make it one. A recent poll found that 88% of Filipinos said rising fuel and electricity costs had significantly affected their daily lives.

“If we do this rooftop solar deployment right in the next couple of years, it can materially change our country’s electricity costs and overall economic opportunity,” Mendoza said.