Stressed by High Electricity Prices, Filipinos Switch to Rooftop Solar
MANILA | 19 AUGUST 2026
The idea of installing solar panels on the roof of his home in Cavite province, Philippines had long been percolating in NJ Villafuerte’s mind. But it was the closure of the Strait of Hormuz after the US-Israel attacks on Iran in February that pushed him into executing what had been just a neat idea – in a matter of days.
In early March, a team of workers arrived and installed a 12-kilowatt peak hybrid solar system, along with a pair of battery storage at his property. Villafuerte had compared his options, found a reputable installer on Facebook Marketplace, and got his partner on board.
His hybrid set-up, which is still connected to the local electricity grid so that he can use energy from it when necessary, now powers two buildings on his property, where his partner sometimes works from home and air-conditioning runs 24/7 for their three dogs.
The gains were immediate: Villafuerte saw a 98.5% drop in the first electricity bill he received after switching to solar power. From roughly 20,000 Philippine pesos (324 US dollars) a month previously, it fell to just 300 pesos (5 dollars).
Parts of the Philippines, which heavily dependent on imported fossil fuels and whose electricity rates are among the highest in Southeast Asia, had rotating power outages in May. “I was very proud to say we were the house with lights on,” said Villafuerte, 33.
Villafuerte, who works for a foundation in the Metro Manila capital region, now monitors his household electricity consumption through an app on his phone. Provided by the solar installation company, the mobile app shows how much power is generated by his solar panels during daytime and how much energy his household still pulls from the grid. At night, the system switches to using the energy stored in the solar-powered batteries. So far, his system has worked without any hiccups, said Villafuerte.
The Philippines relies on fossil fuels for 75% of its power generation mix – and the prices of all these fuels have risen since the conflict in West Asia.
He was quite ahead of a rooftop solar boom that has since taken off in the Philippines, where consumers are looking for ways to manage rising electricity costs amid a global energy crunch that will persist for some time.
“People are no longer viewing rooftop solar as simply an environmental choice,” said Brenda Valerio, Philippine director for the non-profit New Energy Nexus, in an interview. “They are increasingly viewing it as protection against volatile electricity prices, fuel dependency and grid instability.”
Solar energy accounted for only for 3.8% of the Philippines’ total power generation in 2025, official data show, although this has slowly been picking up over the last decade. It made up 15% percent of renewable sources of electricity, which in turn accounted for one-fourth of the power generation mix in 2025.
The share of renewable energy in the Philippines’ power remains behind its target of 35% of the energy mix by 2030. By 2040, the country aims to generate half of its electricity from renewables as part of its commitments under the 2015 Paris Agreement.
The surge in demand for solar power is reflected in rising imports of solar panels. Globally, the Philippines was the second-largest destination of solar panels from China, which is the leading producer of such panels, between January and April 2026.
During that period, the Philippines bought 4,133 megawatts capacity of Chinese solar panels, ahead of the second top buyer, the Netherlands (a European transshipment hub). The Philippines’ imports also outpaced those of Thailand and Vietnam, which are larger markets for solar power and have more utility-scale solar capacity.
Still, Valerio said, these trade numbers signal a Philippine market that is already moving ahead of government policy. “Consumers and businesses are no longer waiting for perfect conditions,” she said.
RELIANCE ON IMPORTED FOSSIL FUELS
The Philippines is highly vulnerable to external energy shocks and global price changes due to its heavy reliance on imported oil and gas – fossil fuels that are the main driver of climate change and whose use countries had committed to cut back on. “A state of national energy emergency” remains in place, declared by President Ferdinand Marcos Jr on 24 March.
The Philippines relies on fossil fuels for 75% of its power generation mix – and the prices of all these fuels have risen since the conflict in West Asia.
More than 57% of the country’s electricity comes from coal, the single largest source of rise in global temperatures. More than 95% of the coal it uses is imported and almost all of these imports (99%) come from Indonesia, the world’s largest coal exporter. In July 2026, Indonesia set prices at 131.85 dollars a tonne, compared with $102.20 in the previous year, as more countries said they would use more coal and demand for it rose.
The Philippines’ second top source of power is gas, which accounts for just over 17% of the electricity generation mix. Imports started in 2023 and are expected to rise sharply as part of government policy. The country gets gas from countries like Nigeria, Australia, Malaysia, the United States and Qatar, which produces and exports one-fifth of the global supply of liquified natural gas.
Oil accounts for just .56% of the Philippines’ power mix. Ninety-five percent of its crude oil comes from the Persian Gulf states, whose main export route for oil, gas and other fossil-fuel products is the Strait of Hormuz.
But beyond the share that these fossil fuels have in the Philippines’ power generation, a mix of factors has pushed up the retail price of electricity high at a time of supply shocks and uncertainty.
High prices of oil and gas amid high demand push up costs such as transport and delivery (of other fuels too) as well as insurance costs for transporting vessels. In addition to the weakening of the peso in the current economic climate, these increase the overall costs of generating power. Local power generators in the Philippines then pass on various costs that go into consumer prices, especially since there are no buffers against international price changes.
Even before this energy crisis, the combination of an aging centralized electricity grid, reliance on imported fossil fuels and slow transition to renewables had made the Philippines’ power rates among the highest in Southeast Asia.
Since the closure of the Strait of Hormuz, local electricity prices have increased several times.
In June, residential power rates reached an average of 12.43 pesos (20 cents) per kilowatt-hour, surpassing high-income Singapore, according to the energy department. These costs are acutely felt by Filipino households, which spend around 12% of their monthly income on electricity.
Electricity rates for retail customers were 17% higher in May 2026 compared to May 2025, the global energy think tank Ember reported.
LOTS OF POTENTIAL
Still, analyses by climate and energy think tanks point towards an “acceleration phase” in rooftop solar. An Ember study suggests that the Philippines already has around 1,300 megawatts of installed rooftop solar. “Rooftop solar has most likely doubled in the last 12 months,” its May report said.
This hints at a vast potential. A solar mapping tool by the Manila-based Institute for Climate and Sustainable Cities estimates that there is a maximum solar capacity of 106 gigawatts based on the total rooftop area of buildings across Philippine cities and economic zones.
To put the solar boom in context, the Meralco Terra Solar project in the Philippines – whose website says it will be “the world’s biggest single-location solar farm” – is projected to generate a 3,500 megawatt peak of solar power once fully operational in 2027. Ember says rooftop solar can scale to another MTerra project in just 24 months, given an enabling policy and supportive financing schemes.
The Philippines’ solar boom is remarkable given the slower pickup of renewable energy in fossil fuel-dependent Southeast Asia. In most of its countries, renewable energy is in what the International Energy Agency describes as the early integration phase (phases 1 or 2 in a six-step scale), where it has “minor to moderate impact” on the power system. The regional leader is Vietnam, which is at phase 3.
Satellite imagery and extrapolation models by climate tech non-profit TransitionZero showed more movement in recent years toward rooftop solar in Vietnam, Malaysia, Thailand and Indonesia. Vietnam leads the course here too.
OVERWHELMING DEMAND
The Philippines’ rush to solar power, however, has also exposed challenges for local installers and consumers alike.
Amiel Camingal, president of renewable energy startup Hive Energy, said they were caught off guard by the wave of inquiries for rooftop solar since the energy crisis started.
“We even had to use an AI agent to help us speak to our clients because we were overwhelmed with the volume,” he said in an interview. Before the crisis, he said, they would have around 100 inquiries a month but these have exploded to 1,000 to 2,000 since March. “We had angry clients coming to us, asking why we weren’t responding to them quicker,” Camingal said.
Hive is among the few local installers in Oriental Mindoro, an island province southwest of Manila. Electricity rates there, which range from 15 to 18 pesos (24 to 29 cents) per kilowatt-hour, are among the highest in the Philippines.
Meeting the surging demand is the bigger challenge, said Camingal. Providers of rooftop solar follow a linear process: site assessment, quotation, order placement for supplies and hardware, and finally, installation. Small to medium-sized startups, like Hive Energy, do not normally stock inventory and only place orders for equipment after site visits.
When customer inquiries flooded in, so did the orders for solar components that are mainly manufactured overseas. Local installers grappled with imported panels and other hardware stuck at Manila ports, leading to shortages and long lead times. Many providers also lack staff. Hive Energy, for instance, only had eight people in its technical team.
“We’re at the mercy of the existing suppliers now in terms of inverters and batteries,” Camingal said. “With the thousands of inquiries, we probably reached 10 to 20 contracts, but with our capabilities, we can only manage about six to eight installations in a month.”
Supply chains need to be improved to meet demand, says Jose Rafael Mendoza, president of the Philippine Solar and Storage Energy Alliance. “There is an inherent latency because of our geography (as an archipelago),” he said in a press briefing. “The main ports are just in the main city areas, so naturally it’s only there where products are easily accessible.”
Installation training and workshops are concentrated in urban centres like Metro Manila, which means that levels of capacity vary. “The hard costs are already going down, like the price of panels and hardware,” he said. “[The question is] how do we get better at deploying at scale?”
MORE INCENTIVES NEEDED
In a May survey by local pollster Pulse Asia, 91% of 1,200 respondents nationwide said more people would adopt rooftop solar if there were more affordable financing options.
Rooftop solar installation costs range from 250,000 to 400,000 pesos (4,062 to 6,498 dollars) In contrast, the average annual income of a Filipino household is 353,200 pesos (5,733 dollars).
Villafuerte shelled out 800,000 pesos (13,000 dollars) to his locally based installer – a price lower than what big-name rooftop solar providers would have charged. “They offered more flexible payment terms and they were also using the same technology as the big players,” he said.
The country’s steep power prices mean that households can enjoy the return on their investments quicker, such as within three years, Valerio said. Villafuerte estimates that he will break even in three years and four months. Still, the upfront installation costs are out of reach for many lower-income households, who are also often the most energy poor.
“We also need to be innovative in making them part of this transition,” Valerio said. “For example, can we do community-owned systems, especially those in social housing? It’s an opportunity for us to involve other members of society because they are the most vulnerable at the end of the day.”
Energy campaigners say more financial incentives and tax breaks could drive more Filipinos to consider rooftop solar. Installing rooftop solar requires multiple permits and fees from different government offices, such as building and electrical permits, and clearances and inspections from local district and building officials.
Campaigners and installers say the government needs to strictly implement the exemption from the 12% value-added tax rate of the sale of power generated from renewable energy and the local purchases of related goods and services – a provision that is in the Renewable Energy Law.
In July, President Ferdinand Marcos Jr called for the swift passage of legislation that would simplify the installation and cost of rooftop solar and battery storage systems. Soon after, the Department of Energy department said it is finalizing a policy that reduces the bureaucracy around installing solar power systems.
The Government Service Insurance System, the state-run social insurance for government workers, has seen seen strong demand for its rooftop solar loans of up to 500,000 pesos (8,123 dollars). Some local governments have incentives and discounts on real property taxes for residents who shift to rooftop solar.
Several private banks have also begun offering solar mortgages alongside housing loans.
Under net metering, a scheme under the renewable energy law, customers can sell excess electricity from their solar set-ups back to the grid and receive credits in their monthly bills.
“Rooftop solar always made sense because we are an island country. It never made sense for us to have a very centralized power sector to begin with,” said Valerio. “It’s an exciting new path… that will unlock new industries, new things for us.” (With additional material by Johanna Son.)
(END/Reporting ASEAN/Edited by J Son)
