Tovic Salvador

Renewable energy and financing: What you need to know

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<div style="line-height:1"> <img src="https://od2-image-api.abs-cbn.com/prod/editorImage/175030740001820250508110544_solar panel.jpg" style="width:950px" class="fr-fic fr-dib"/></div><div style="line-height:1;text-align:center"><em>Photo source: </em><a href="https://www.pexels.com/photo/solar-technician-installing-solar-panel-8853502/"><em>Pexels</em></a></div><div style="line-height:1"> </div><p style="line-height:1">The country&#x27;s reliance on imported fossil fuel, high generation costs, and the use of expensive power plants are some of the reasons why the price of electricity in the Philippines has been rising over the past few years and even today. Moreover, limited competition and the weakening Philippine peso against the US Dollar also plays a crucial role in driving up the prices. This pushes Filipino households to look for alternatives to survive the trudging heat caused by the tropical weather of the country. </p><div style="line-height:1"> </div><p style="line-height:1">Nowadays, people are becoming interested in solar power, much like Joanna Granada who shared her experience with small scale solar panels that are helping lessen the cost of electricity in their home by powering their lights outside the house once it is dark outside and inside the kitchen. </p><div style="line-height:1"> </div><p style="line-height:1"><em>&quot;Sobrang malaking help din kase &#x27;yun, kase automatic siyang nag-tu-turn on whenever around mga 6:00 pm ganun, kapag medyo dumidilim na sa bahay,&quot;</em> shared Granada. </p><p style="line-height:1">(It really helped a lot because it automatically turns on whenever it is around 6:00 pm, when it is dark at home). </p><div style="line-height:1"> </div><p style="line-height:1">Their family has also discussed installing a large scale renewable energy (RE), <em>&quot;Actually napagusapan din namin &#x27;yun sa bahay, oo, i-co-consider din naman talaga namin if medyo may budget like puwede talagang makabit na ganun. Sa sobrang laking tipid naman talaga,&quot;</em> shared Granada. </p><p style="line-height:1">(Actually, we have talked about it at home and yes, we are considering it, if we have enough budget like we really can have RE installed. It really is a money saver). </p><div style="line-height:1"> </div><p style="line-height:1">However, what is stopping Granada from having a solar panel installed in her home is the fear of the cost. <em>&quot;Libo talaga, kase &#x27;yung ilaw palang 1200 per light, so imagine na ganun kaliit, imagine kung malaki around siguro 20 to 30k. Depende siguro gaano kalaki,&quot;</em> shared Granada. </p><p style="line-height:1">(Thousands really, since our solar-powered lights already costs P1,200 per light, imagine that small of a size; imagine if it is bigger, probably around 20 to 30k. Depending on how big it is). </p><div style="line-height:1"> </div><p style="line-height:1">For Granada who shared that she is also a breadwinner of the family, spending a large amount of money for the installation might not be easy for their family budget. </p><div style="line-height:1"> </div><p style="line-height:1">According to the Philippine <a href="https://solaric.com.ph/blog/dos-donts-solar-system-philippines/">Department of Energy (DOE)</a>, aside from installation costs key considerations in preparing for RE or solar panel installation in your home or establishment are: </p><p style="line-height:1">- Preparing for the cost of maintenance which means having a scheduled cleaning for the solar panel to ensure optimal performance; </p><p style="line-height:1">- Ideal location for the solar panels; </p><p style="line-height:1">- Accredited solar panel company that will install the mechanism in your home </p><div style="line-height:1"> </div><p style="line-height:1">Thankfully, once you have prepared and processed these key considerations, the purchasing process has been eased, through several private, government led regulations and initiatives to make payment terms flexible and easy on the pocket. </p><div style="line-height:1"> </div><div style="line-height:1"><strong>Philippines&#x27; initiative to make Renewable Energy budget-friendly </strong></div><div style="line-height:1"> </div><p style="line-height:1">Through developments over the years, there are now several ways to acquire RE for your household or establishment. </p><div style="line-height:1"> </div><p style="line-height:1"><a href="https://legacy.doe.gov.ph/6-how-finance-solar-rooftops">DOE shares</a> that there are two main financing options available for those who want to switch their home or establishment to RE, these include a term loan from the bank called <a href="https://www.bpi.com.ph/personal/loans/housing-loan/solar-mortgage">Solar Mortgage</a> or sometimes offered as part of <a href="https://web.facebook.com/BDOUnibank/posts/power-up-your-home-with-solar-panels-borrow-funds-using-your-existing-property-a/902815451946703/?_rdc=1&amp;_rdr#">home deals</a> where it may vary from 70% of the project cost is financed by the bank and 30% equity required from the lender. Payment terms may range from three years to seven years or longer depending on the scale of the project. Additionally, microfinance institutions and NGOs also offer flexible terms.  </p><div style="line-height:1"> </div><p style="line-height:1">It is also important to have <a href="https://www.google.com/search?sca_esv=44785faec4b38403&amp;sxsrf=AHTn8zp25RjGqax_N3PVEMzrK13acmZ80w:1746632472955&amp;q=what+banks+tag+as+high+risk+for+solar+panel+loans&amp;spell=1&amp;sa=X&amp;ved=2ahUKEwi_9emA2ZGNAxUn7TgGHcIcAk8QBSgAegQICxAB&amp;biw=1440&amp;bih=731&amp;dpr=2#:~:text=Secured%20solar%20loans,any%20other%20purpose.">secured solar loans</a> and home equity loans as these usually have low credit requirements, since they are backed by collateral like your home or establishment. On the other hand, unsecured loans which are tagged by the bank as &quot;high risk&quot;—like personal loans—generally need a good credit standing to meet the eligibility requirement since they treat solar panel projects like any other kind of loan without consideration. </p><div style="line-height:1"> </div><p style="line-height:1">An example of high-risk loans are from Small Solar Energy Enterprises (SSEEs), NGOs, and cooperatives who would like to take out a loan to provide their client – say a household or a building with REs. These entities do not have a collateral for their loan which tags them as high risk, resulting in a long processing time in their loans. At times, this results in loss of interest in their clients due to the long waiting time.  </p><div style="line-height:1"> </div><p style="line-height:1">So, to help resolve this issue, <a href="https://www.asean-ssa.org/files/ASSA%20Recognition%20Award/2017/H%20Home%20Development%20Mutual%20Fund,%20Philippines%201.pdf">Pag-IBIG Fund&#x27;s Green Loans</a> plays a key role in supporting households, businesses, or buildings in acquiring their own solar panel system at home. They do this by integrating an amount for the solar panel acquisition into your housing loan. Applying its provisions to all new construction and with alteration of buildings.</p><div style="line-height:1"> </div><p style="line-height:1">Solar Financing Project at the Foundation for a Sustainable Society, Inc. (FSSI) is also working on providing loans with easy and flexible terms to Small Solar Energy Enterprises (SSEEs), NGOs, and cooperatives, so that these entities may have revolving funds to purchase REs required by households or buildings, and also provide it to their client with their own easy and flexible payment terms. </p><div style="line-height:1"> </div><p style="line-height:1">Another option is leasing, whereby an owner grants the use of the RE for a fee over a period of time. Leasing may either be direct lease of equipment or sale and leaseback of equipment with a term that lasts up to seven years. For this case, the lessor would usually require around 20% of guarantee deposit, equivalent to the Residual Value of the RE. </p><div style="line-height:1"> </div><div style="line-height:1"><strong>Calculating the actual cost </strong></div><div style="line-height:1"> </div><p style="line-height:1">Lito &quot;Alex&quot; Villar, the Assistant Project Manager for the Solar Financing Project at the Foundation for a Sustainable Society, Inc. (FSSI) helped to gauge the cost and how their flexible terms work.  </p><div style="line-height:1"> </div><p style="line-height:1">According to Villar, here are the steps to take to calculate for the cost of the RE that you would like installed in your household or building: </p><div style="line-height:1"> </div><p style="line-height:1">- Step 1: Get the average cost of your electricity per year. This step will determine the average required electric capacity for you, to avoid overdesign. </p><div style="line-height:1"> </div><p style="line-height:1">- Step 2: Check your budget to find out if you will opt for a grid-tied system or a hybrid system. </p><div style="line-height:1"> </div><p style="line-height:1"><em>&quot;Yung grid-tied mas mura po siya kasi hindi tayo gumagamit ng batteries. Mahal po kasi &#x27;yung batteries. So puwede po kung medyo limitado &#x27;yung budget natin, &#x27;yung grid-tied na lang &#x27;yung kunin natin,&quot;</em> shared Villar. </p><p style="line-height:1">(Grid-tied solar panel types are cheaper because they do not use batteries. Since batteries make it more expensive. So, if your budget is limited, opt to get grid-tied ones). </p><div style="line-height:1"> </div><p style="line-height:1">Villar also explained that hybrid types that use batteries are beneficial to be used at night or when there is a power outage as it serves as your home&#x27;s own power bank. </p><div style="line-height:1"> </div><p style="line-height:1">- Step 3: Check the capacity of your roof since solar panels are heavy and may cause additional weight on the roof of your house. It is also important to have the space of your roof checked to ensure that the required panel will fit. </p><div style="line-height:1"> </div><p style="line-height:1">- Step 4: Find out if the location where your solar panels will be installed has an overcast shadow, trees blocking the rays of the sun, buildings or houses higher than your location. </p><div style="line-height:1"> </div><p style="line-height:1">- Step 5: Installation and maintaining habits as some users may be &quot;trigger happy&quot; with their electricity use once their solar panel is installed which might result in still a large amount of electric bill from your electric provider. </p><div style="line-height:1"> </div><p style="line-height:1">Moreover, Villar added that extra caution should also be taken in choosing your installer or agent as solar panels not regulated by DOE may not have gone through quality checking and may even end up causing fires. </p><div style="line-height:1"> </div><div style="line-height:1"><strong>Reaping the benefits of Renewable Energy </strong></div><div style="line-height:1"> </div><p style="line-height:1">Lyona and Washington Midyante are only one of the many households and establishments that are now experiencing the benefits of having RE in their home. The retired couple shares that their family home with eight air conditioners running at the same time, plus other appliances usually receive an electric bill of around P30,000 to P40,000 monthly. </p><div style="line-height:1;text-align:center"><img src="https://od2-image-api.abs-cbn.com/prod/editorImage/1750307181639OO.jpg" style="width:950px" class="fr-fic fr-dib"/> Lyona and Washington Midyante&#x27;s home now reaps the benefits of having a solar panel installed to power their appliances. <em>Photo source: ABS-CBN News</em></div><div style="line-height:1;text-align:center"> </div><p style="line-height:1">Now, with the solar panels installed in their home, their electricity bill has gone down by almost a half. Their average monthly bill is now down to an average of P20,000.  </p><div style="line-height:1"> </div><p style="line-height:1">Their electric bill savings average around P120,000 to P240,000 depending on their usage. </p><div style="line-height:1"> </div><div style="line-height:1"><strong>Accessible renewable energy </strong></div><div style="line-height:1"> </div><p style="line-height:1">Through continuously developing policies, private and government initiatives, and the collaborative effort of the community, renewable energy is becoming a more practical and achievable option for Filipino households and businesses. As financing options expand and awareness grows, more individuals are empowered to take part in the transition toward cleaner and more sustainable energy.  </p><div style="line-height:1"> </div><p style="line-height:1">Each step—no matter how small—contributes to a future where energy is not only affordable, but also better for the environment and generations to come. </p><div style="line-height:1"><br/></div>

<p>New policies have made renewable energy sources easy on the pocket, however, not everyone knows about it.</p>

New policies have made renewable energy sources easy on the pocket, however, not everyone knows about it.

Renewable energy and financing: What you need to know

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Renewable energy and financing: What you need to know

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Published June 19, 2025 12:37 PM PHT

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