KICK STARTING THE

PHILIPPINE RESIDENTIAL

ROOFTOP MARKET

by: Mike de Guzman

CEO, Solaric Corp.

www.solaric.com.ph

The Philippine Market

•High power rates at P12/kWh (~US $0.26/kWh)

•Fragmented- 7,107 islands, reliance on diesel peaking

plants

•Severe energy shortage on the horizon

•Frequent power outages due to shortage. Mindanao-

davao-CDO and even metro manila had some rotating

outages in 2014 and prediction is dire in 2015 with the

shutdown of Malampaya plant.

•Large popluation base in remote unelectrified areas.

Common to find entire towns with only 12 hours a day

coverage. Heavy reliance on Diesel plants.

The Power Shortage

•According to Department of Energy’s (DOE) forecast, the

worst of the rolling power outages will hit the country

second week April of 2015 when power supply deficiency is

seen at 285 megawatts

•This will most likely result in rotating power outages of up

to 2 hours.

•Severe brownouts will also be felt in March, April, and May

•The DOE said it is extremely problematic sourcing out the

system’s need for contingency reserve – placed at about

647MW for the Luzon grid.

Distribution Utilities•MERALCO is the Philippines’ largest distributor of power, powering 5.1M

customers. It accounts for 75% of Luzon and 55% of the entire Philippines’

energy sales.

Why small scale rooftop?

• It displaces the highest power rates at ~P12/kWh (~US

$0.26/kWh)

• Regulatory frameworks and Utility interconnection

policies are becoming more defined.

• Payback of Solar installations is about 5 years for

residential customers, if built below daytime baseload

• Low labor costs

•Economics now back up grid tie solar, next is

implementation and education.

RESIDENTIAL COMMERCIAL INDUSTRIAL

P12.48/kWh P 11.04/kWh P8.78/kWh

Philippine homes with solar

SOLARIC is leading the trend in rooftop PV in the Philippines. SOLARIC has the most

number of rooftop installations and the most number of approved net metering

installations in the country. We’ve installed 1MW in the past year and doubling capacity

every quarter

Philippine SMEs with solar

•Solaric does 3 to 4 rooftop installations per

week in Metro Manila, and another 3 to 4 per

week in other provinces, ranging from 500Wp

to 15kWp

•Solaric has a dealer network, a sales training

program, and an installer training program

Permitting & Net Metering

•Submit Net Metering application form to Distribution

Utility (DU)

•Submit Electrical Permit & certificate application to

City hall

• Wait for contract, permit/certification, and finally,

installation of the net meter

•The whole process takes 3 months to 6 months,

depending on the area having jurisdiction, and multiple

visits to the DU office and various city hall offices.

•Other DUs don’t have a Net Metering application form

yet, we have to provide one. In these instances, it could

take up to 10 months or more.

Net meters installed90 Days from application

to code retrofit, to

approval and net meter

installation.

Total cost: P14,000 (USD

$311)

78 Days from

application to code

retrofit, to approval and

net meter installation.

Total cost: P10,000

(USD $222)

Permitting Costs

• Net Metering Distribution Impact Study : P5,500 or

P19,500 – depends on the DU.

• ERC charges P1,500 (collected by the DU)

• City Halls charge anywhere from P1,500 to P11,000+

• Best case scenario total: P8,500 (US $188)

•Worst case scenario total: P42,000+ (US $933)

•Total Average Cost: P12,000 (US $266)

*costs do not include time / manpower

Philippine’s first POP-NET (Peak Off Peak with Net Metering) Installation

Other Costs

•Most homes older than 3 years or so do not have a

“service disconnect” and will also be required to change

their “meter base” to have a Net Meter installed. This

will cost the homeowner roughly P8,000 to P20,000+

depending on size of main line. (US $ 177 to $444+)

Inspections

DU and City Hall inspection of customer facilities include:

• service disconnect, grounding, certification of equipment,

verification of anti-islanding and reclosing times, etc.

•Must pass all requirements prior to the installation of

actual Net Meter.

No Net Metering?

• Without net metering, its highly likely

the unidirectional meter will count any

export as consumption – customer’s bill

will go up.

• No requirements on the DU end, but

the local building department / City

Hall requires an electrical permit.

Supply Chain Economics

• Expensive logistics channel to get goods through to

Manila.

•Red tape, brokerage fees, VAT, port delays and

congestion.

•Solar Modules are DUTY FREE, but must still pay VAT.

All other items (rails, inverters, etc have a duty and a

VAT)

•It costs almost the same amount of money to get a

container from Shanghai to Manila, vs a truck from

Manila port to an address within Manila.

•It takes 3-5 days from Guangzhou to Manila, but 10 to

14 days to unload the boat due to port congestion

The Market

• Clients demand local presence for after sales

service and warranty - looking for dependable

outfits at reasonable rates

• Clients are looking for hybrid grid-tie and off-grid

solutions due to the looming power crisis.

Hybrid OffGrid•San Jose Nat’l High School, Tacloban

•10kVa, 3kW with 48V/400Ah

battery bank – enough to power 2hp

aircon and 20+ computers

The Market

• Financing or loans to middle class consumers will

open the floodgates to mass adaptation. If we can

prove that monthly payments are less than

savings created by solar it will be a win-win

proposition.

•PPA agreements to large institutional users, and

also light commercial 10-100kWp and 100kWp to

2 MW, heavy industrial users. 15 year PPA

The Market

�The Philippine market is vast and the need for cost effective

renewable energy is universal.

Technology Transfer

SOLARIC provides training on the basics of PV, as well as PV

installer training for it’s nationwide network of installers and

dealers.

Typhoon Haiyan Relief Efforts

SOLARIC has put power in schools, geothermal power plants, hospitals, churches, town centers,

clinics, police stations