Philippine Solar FIT Basics (101)

Philippine Solar FIT Basics (101)



In this blog we will answer the question: How Much is the SOLAR FIT Impact to my electricity bill?


What is Solar FIT? Solar FIT is a fixed rate (of money) to be paid to Solar Power Developer over agreed period of time to recuperate investment. FITs are scheme adopted by other countries to encourage the utilization and generation of electricity using Solar Cell Modules. In short this is a subsidy paid to solar power developers. See link for other countries FIT program.


How much is the proposed Philippine Solar FIT? Currently the proposed Philippine SOLAR FIT is Php12 per kW-hr. This has been reduced from the previous proposed rate of Php17.95 per kW-hr. See link for the Solar FIT rate proposed.


Opponents of Solar power utilization in the Philippines always cite that Solar Power technology is expensive technology and it will burden ordinary consumer when the SOLAR FIT is integrated into end users electricity bill. 


Let's tackle it head on if their argument holds water.


Electricity produced by solar shall be mixed with other electricity produced by other sources (more than 75% of the overall mix is fossil based i.e. coal and natural gas). So how much will be the total proposed solar electricity contribution? It is only 50 MW (see link here). Electricity produced by solar then shall constitute only 0.004% out of 13,000 MW if you take the end of 2012 total per Department of Energy, Phil Energy Plan 2003-2012. The percentage of electricity to be produced by solar then will be even lower when the energy plan is updated. 


If we take the proposed 50 MW solar power installation, 13,000 MW demand and Php12 solar FIT then the following shall be concluded.


Cost impact of solar FIT to be included to the end users monthly bill for the next 20 years:
Php0.046 


How did we arrive to that final figure? Here it is.
The FIT is multiplied by solar’s generation, before they are spread over the Luzon's total consumption, resulting in what are known as retail impacts—the increase per kwhr that each end user pays. 


Do your own math, I may have a broken calculator... whatever twisting and tweaking you do, you won't have Php12 per kW-hr added to your monthly bill simply because the electricity produced by solar power plants will be mixed together with other electricity produced using other sources, 23% of which is already renewable (Geothermal, Hydro, Wind, and Biodiesel as of May 2012).


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This blog is a part of series to inform about the Power situationer and Renewable energy status in the Philippines.


Next on Series: Green electricity prices versus Black electricity prices.