Solar industry touts ‘considerable’ savings if missionary areas retire diesel generators

SOLAR POWER and battery storage promises “considerable” savings over diesel generators used in remote “missionary” communities, while reducing the government’s subsidy bill, according to the Asian Photovoltaic Industry Association (APVIA).

“By retiring the diesel-run power plants in missionary areas and introducing solar paired with battery, the recurring cost of fuel is cut considerably from the billing of consumers every month,” the APVIA said, citing the results of a study.

It also cited the reduced need for consumers to fund subsidies for off-grid areas.

Power consumers connected to the main grid pay a monthly universal charge for missionary electrification (UCME), which subsidizes the cost of power in off-grid areas.

Island communities and off-grid areas are highly dependent on power plants operated by the Small Power Utilities Group (SPUG)  the National Power Corp.

Most SPUG plants are powered by diesel, exposing them significantly to global oil price volatility.

Currently, the NPC collects a UCME of P0.3397 per kilowatt-hour from on-grid consumers.

APVIA, citing data from the Department of Energy (DoE), said generating power in NPC-served islands costs about P18 per kWh on average, with the cost in some remote islands as high as P62 per kWh. Consumers on the main grid may pay about P5-8 per kWh.

“Every peso spent hauling diesel to an island is a peso that comes back to Filipino households through the UCME, or to the government through the budget,” APVIA Steering Committee Chairperson Theresa C. Capellan, said. “Solar and battery break that cycle.”

APVIA said that installing solar photovoltaic (PV) systems paired with battery energy storage systems is the most practical way to cut diesel use.

“Solar is now the cheapest source of new electricity in the world, and batteries make that power available after sunset. Hybrid solar–battery–diesel systems keep generators as backup while renewables supply most of the demand,” the group said.

The DoE is organizing a green energy auction offering NPC-served areas to accelerate the transition of off-grid communities to hybrid renewable energy systems.

The first round will cover 20 of the larger NPC-served islands, with a combined annual demand of about 367,000 megawatt-hours, and will procure solar and battery systems to replace diesel plants.

The government has estimated that adopting solar and battery storage for off-grid areas could cut the UCME by half.

APVIA and its partners called for continued government–industry collaboration to identify viable projects, address financing and regulatory barriers, and accelerate solar and battery deployment in missionary areas. — Sheldeen Joy Talavera