Feed-in-Tariff Allowance (FIT-All) and Green Energy Auction Allowance (GEA-All) show up as added charges on electricity bills, but their actual impact involves reducing long-term consumer risk by supporting renewable energy that can reduce peak market prices, limit exposure to imported coal and gas, and make the power supply mix more competitive.

A common misconception about the Philippines’ renewable energy policy is that programs such as the FIT and GEA—and the FIT-All and GEA-All charges that support them—simply make electricity more expensive. However, these mechanisms do not work that way. They are not merely add-ons to electricity bills; they are meant to help bring down the cost of renewable energy and, over time, deliver cheaper and more stable electricity to consumers.

From this perspective, these programs are practical investments in price stability and energy security. Their value becomes clearer when we look at how they work, what they have already changed in the market, and why they still matter for the future of Philippine power.

The clearest test is net cost, not line-item visibility: The Institute for Climate and Sustainable Cities’ analysis of 2025 Wholesale Electricity Spot Market data estimates that FIT-supported renewable energy projects generated approximately PHP 261.4 billion in market savings in 2025 alone, more than the cumulative FIT contribution requirement of PHP 220.5 billion collected from consumers over the lifetime of the mechanism.

Published
25 August 2026

How the FIT-ALL Works

The Feed-in-Tariff Allowance (FIT-All) was introduced to support the first wave of renewable energy projects under the FIT regime. At the time, solar and wind were much more expensive, financing was harder to secure, and developers faced real regulatory and market uncertainty. The mechanism gave projects predictable revenue, which helped them secure financing and build the country’s first base of renewable capacity.

When FIT was introduced in 2014, solar projects were awarded rates of PHP 9.68 per kWh, as approved by the Energy Regulatory Commission. At that time, this value was the real cost of solar projects in the Philippines. Today, new solar projects are being contracted at rates of PHP 3 to PHP 4 per kWh. Such decline did not happen by accident. Early FIT support helped local supply chains develop, improved technical capability, reduced financing risks, and allowed learning curves to take effect in the Philippine market.

Early FIT rates were not cheap. In particular, these rates helped build the market that makes today’s cheaper renewable power possible. Similar support frameworks around the world helped move solar and wind from costly early technologies into mainstream sources of electricity. In this case, FIT played a market-building role: the allowances collected then helped fund the foundation for cheaper indigenous energy.

The FIT-All is best understood as a time-bound market builder. It reduced early financing risk by giving lenders and developers predictable long-term revenue. It also helped create the first base of domestic renewable capacity and build the expertise, contractor networks, permitting experience, grid connection knowledge, and logistics channels that later projects could use at lower costs. In practical terms, the first FIT-supported projects taught banks, developers, and suppliers how to finance RE, how to build and operate it locally, and how to serve the Philippine market, respectively.

How the GEA-ALL Works

The Green Energy Auction Allowance (GEA-All) supports projects awarded through competitive green energy auctions. Unlike the set fixed rate in the earlier FIT regime, the auctions supported by the GEA mechanism push prices down through competition. Developers offer to supply power at the lowest price acceptable to them, and winning bidders enter into 20-year power supply agreements at their auction-determined rates.

The GEA-All is a uniform charge collected from all on-grid electricity consumers to cover the cost of these contracts. It spreads the cost of procuring renewable energy across the system instead of leaving it only to a distribution utility or its captive market.

Under the Green Energy Auction Program, the government sets a ceiling price for each auction round, and developers compete to bid below it. Solar ceiling prices were set at PHP 3.6799 per kWh in the first round (GEA-1, 2022), PHP 4.4043 per kWh in the second round (GEA-2, 2023), and PHP 4.4832 per kWh in the fourth round (GEA-4, 2025); these prices are already far below the cost of generating power from coal or natural gas at the time.

More telling than the ceiling price is how developers have bid against it. In GEA-1, most awarded solar projects bid right at the ceiling price. In GEA-2, 17 awarded projects still bid at the ceiling. By GEA-4, only one of 58 winning solar bids did so. Developers are now more willing to bid below the ceiling, which suggests competition is starting to work as the market matures.

Offshore wind, which is still new to the Philippines, has been awarded at around PHP 11 per kWh in recent auctions, reflecting the higher upfront cost of an early-stage technology. Such price is not necessarily expensive by local standards: solar’s entry price in 2014, PHP 9.68 per kWh, is roughly equivalent to PHP 12 per kWh in today’s money after adjusting for inflation. By that measure, offshore wind is already entering the market cheaper than solar did during its entry, and the same dynamic that lowered solar prices could do the same for wind as supply chains and experience build up.

The GEA-All now plays the next-stage role. Where FIT helped create the market, GEA uses competitive auctions to keep prices disciplined, scale up deployment, and shift renewable procurement toward lower-cost, bankable contracts.

A small portion of what we pay

The FIT-All and GEA-All comprise only a small portion of electricity bills each month. The larger and less predictable portion is the generation charge, which is determined by fuel prices, supply conditions, and power supply contracts. This allotment became clear during the 2022 and today’s global energy crises, when coal and gas price spikes flowed through to electricity bills while renewable energy support charges stayed comparatively stable.

These charges should be judged not only by what appears as a line item on the bill but also by what they help avoid: costly fuel purchases, high market prices during tight supply, and deeper exposure to international energy shocks. Such benefits are harder to notice because they do not appear as a separate discount, but they still matter in building a cleaner, more stable, and potentially cheaper power system.

Visible Charges, Invisible Savings

The central issue is visibility. Consumers can find the FIT-All and GEA-All on their monthly bills, but they cannot easily notice the savings created when renewable energy lowers market prices or reduces the need to buy imported fuel. Hence, the charges are politically visible while the savings remain real but less obvious.

A 2021 study by the Institute for Climate and Sustainable Cities (ICSC) found that variable renewable energy (VRE), mainly utility-scale solar and wind, tends to generate power during the hours when electricity is most expensive. Even though VRE comprised less than 3% of the total energy mix in the years studied, the analysis found that it reduced spot market prices by as much as 28% during peak hours in 2019. A more recent ICSC analysis using 2025 market data found the same price-suppressing effect continuing, estimating that higher renewable output lowered the settlement prices of the Wholesale Electricity Spot Market (WESM) by approximately 10% during periods of peak renewable generation.

The key point is that even a small share of VRE has already helped lower prices during the most expensive hours of the market. Electricity prices are often set by the most expensive plant needed to meet demand at a given time, typically diesel-fired peaking plants, which can drive spot prices up to PHP 32 per kWh during tight supply. When solar and wind reduce the need to run those plants, the market price falls for every generator dispatched during that period, renewable and fossil-fueled alike. The savings benefit the entire system, not just renewable energy buyers.

If price suppression is already visible at below 3% penetration, then the potential impact at higher levels of renewable integration could be significant. More VRE capacity could help moderate peak prices further, reduce extreme price swings, and decrease reliance on imported fuel.

Moreover, the economic value of these system-wide benefits is now becoming increasingly evident. Across 2024-2025, FIT-supported renewable energy projects are estimated to have generated approximately Php 99.2 billion in market savings, almost half of the cumulative FIT contribution requirement of Php 220.5 billion collected from consumers over the lifetime of the mechanism. In other words, in two years alone, the pioneering projects supported under FIT have already reduced overall system costs by almost half the total amount recovered through FIT-All charges since its inception. Spreading these savings out across all consumers within these two years*, FIT-supported projects have reduced our electricity bills by about Php 0.3916/kWh. This value is almost twice the recently set FIT-All rate of Php 0.2073/kWh. This indicates that, even when considering the direct cost of the incentive mechanism, the deployment of FIT-supported renewable energy has resulted in net economic benefits for electricity consumers and the broader power system.

The Path Forward

Leveling the playing field in the power sector means looking more closely at how risks and benefits are shared. For decades, the system has been built around fossil fuel-based generation, with mechanisms such as automatic fuel cost pass-through that transfer commodity price risks directly to consumers. Renewable energy has no fuel cost and offers price stability, but it has historically faced barriers because of high upfront capital requirements and long-term revenue uncertainty.

ICSC frames the FIT-All and GEA-All as structured, time-bound mechanisms meant to speed up technology maturation, unlock economies of scale, and lower long-term system costs. In that sense, they help correct historical imbalances by giving renewable energy a fairer chance to enter the market.

The case for the FIT-All and GEA-All does not depend on making every charge feel painless or proving that every renewable project will be cheap from the start. Well-designed support can still unlock competition, reduce fuel risk, and lower long-term system costs as long as auctions stay disciplined, grid integration keeps pace, and savings are communicated clearly. The practical path forward is to make the FIT-All and GEA-All more transparent, better evidenced, and clearly tied to consumer savings, allowing the public to judge them by their net value rather than by their visibility on the bill.

Methodological Footnote: The net economic benefit of the Feed-in Tariff (FIT) mechanism was estimated by comparing the wholesale spot market savings attributable to FIT-supported renewable energy projects with the FIT payments made to those projects. Market savings were calculated by simulating WESM prices after removing the dispatch of FIT-supported projects and replacing it with the next available generators in the merit order. The resulting difference between simulated and actual market prices was applied to total electricity traded in the spot market total electricity consumption to estimate system-wide savings, which were then compared with total FIT payments. Meanwhile, the per kilowatt-hour savings were calculated by spreading the net market savings to all electricity consumption, finding the price reduction per kilowatt-hour sold in the system. The total electricity consumption for 2024-2025 is 252,719 GWh.