Solar energy boom in the Philippines with increasing costs of the war against Iran

As Southeast Asia's electricity bills rise further, Filipinos are investing in rooftop panels.

MANILA, Philippines – Keith Contra and his family have been thinking about having their own solar power grid at home for years. But spending up to $5,000 on solar panels was nothing to scoff at, so they put the idea on the back burner.

That all changed this year when the US-Israel war against Iran rattled global energy markets and drove up electricity prices. From paying a monthly bill of about $150 before the war began in late February, Cantra said his family was down to $220 in cash.

Eight months later, they are installing solar panels on their roof.

"The cost is about the same as paying our electric bills for three or four years at current rates," Cantera said. But in the fifth year, we will recover our investment and the electricity will be basically free.

Cantera is one of a growing number of Filipino homeowners turning to solar power in a country that had the highest electricity costs in Southeast Asia even before the war. They were only comparable to Singapore, where the average income is more than 10 times higher.

A report by energy think tank Ember estimates that rooftop panels in the Philippines will almost double by early 2025.

And in the first months of the war from March to May, the rush to solar power led to $407 million worth of panel imports, according to government trade data from China, where most of the panels are made. The Philippines became the country's largest single overseas market during that period. Only the Netherlands bought more, but redistributed them to the rest of Europe.

Lexus Grepo, CEO of solar energy supplier Solarmaxx, can confirm this boom.

"There's a 30-day wait because the solar panel shipments can't keep up," Greppo said. We had 40 projects in March, almost three times our monthly customer base. Since then we have launched 25-30 systems per month.

Grepo does not expect demand to decrease even if tensions in the Middle East ease and transportation routes for energy supplies are reopened.

I think people now realize that the world is an unpredictable place, so they have to be prepared for any eventuality. "Filipinos now know that they don't necessarily have to dominate the global energy market."

The Philippines, one of the few countries in the region where electricity is not subsidized, relies on imported coal and gas for more than 70 percent of its energy mix. Its currency, the peso, has fallen to a low of more than US$63, making these imports even more costly.

In late March, President Ferdinand Marcos Jr. declared a national energy emergency in response to the war and what he described as an "imminent threat" to the national energy supply. However, electricity rates continue to rise.

The shift to solar power is also fueled in part by anger at utility companies that have come under scrutiny for charging customers for so-called system losses, which include illegal connections.

Learning about having to pay for other people's electricity was the last straw, Contra said.

"Who's going to pay for something you haven't used? It's not like the money we spend on electricity fell from heaven," he added.

But while the growing demand is real, the initial cost of a solar power system is still too high for most Filipinos. The government launched a new initiative in March to offer loans for residential rooftop installations, but the loans are only available to public sector employees.

What officials hope will lower electricity rates for most people are dozens of renewable energy projects in the pipeline, including a 3,500-hectare (8,650-acre) solar farm north of the capital, Manila, that is expected to be the largest in the world. When fully operational, the project is expected to generate 850 megawatts of electricity for 2.4 million households.

But some consumers say such projects can take years to complete and rack up utility bills unless they take action themselves.

"It's very unpredictable these days. You have the impending El Niño weather pattern. There's still war, fuel prices continue to rise, and a lot of other things," Contra said. "So why not use a natural source?"