QUEZON CITY, 26 August 2026 –– Renewable energy projects supported through the Feed-in-Tariff (FIT) mechanism have reduced electricity bills by Php 0.3916/kWh* across 2024-2025, almost twice the recently elevated FIT Allowance (FIT-All) rate of Php 0.2073/kWh, according to a new analysis by the Institute for Climate and Sustainable Cities (ICSC).

At the system level, FIT-supported renewable energy generated an estimated ₱99.2 billion in wholesale electricity market savings in 2024 and 2025 alone. That two-year amount is already equivalent to nearly half of the ₱220.5 billion consumers have paid through FIT-ALL over the roughly 11 years since collections began in 2015. Cumulative market savings from renewable energy since 2015 will be considerably higher, underscoring how lower wholesale electricity prices have helped offset the cost of supporting renewable energy.

“The sharp decline in renewable energy costs over the past decade shows that sustained policy support, when paired with competition, can turn emerging technologies into affordable and competitive sources of electricity,” said Atty. Pedro Maniego, ICSC’s Senior Policy Advisor.

“The priority now is to build on these gains by expanding renewable energy, so more consumers can benefit from lower-cost electricity and reduced exposure to fuel-price volatility,” he added.

The growing competitiveness of renewable energy has helped drive these savings. Solar projects supported under the FIT program were priced at around ₱9.68 per kilowatt-hour in 2014. Today, new solar projects are being contracted at roughly ₱3 to ₱4 per kilowatt-hour.

The Green Energy Auction-ALL has reinforced this trend through competitive renewable energy auctions, helping keep solar prices within the ₱3.68 to ₱4.48 per kilowatt-hour range.

Competition has continued to push prices down. In GEA-1, most winning solar projects bid at the ceiling price. By GEA-4, only one out of 58 winning solar bids did so, indicating that developers are increasingly able to supply renewable energy at lower prices.

Renewable energy can reduce electricity prices beyond the projects directly supported by FIT-ALL and GEA-ALL. Because solar and wind are often generated during periods of high electricity demand, they can displace more expensive power plants and lower prices in the Wholesale Electricity Spot Market (WESM).

Market data shows that variable renewable energy has already exerted a measurable downward pressure on electricity prices. Even when solar and wind accounted for less than 3% of the country’s total energy mix, they reduced spot market prices by as much as 28% during peak hours in 2019. More recent analysis using 2025 market data shows that higher renewable energy output continued to lower WESM settlement prices by around 70% during periods of peak renewable generation.

When solar first entered the Philippine market under the FIT program, its rate was ₱9.68/kWh in 2014, or about ₱12/kWh in today’s prices after inflation. Today, solar can be delivered at around ₱3-₱4/kWh, which is a sharp drop and proof that costs can come down as an industry grows and scales.

Newer technologies could follow a similar path. Offshore wind has an auction ceiling of around ₱11/kwh as the country begins developing the sector. Greater competition, technological improvements, and economies of scale could help bring down costs as the market matures as we’ve seen in solar technology. As renewable energy becomes more competitive, the focus should be on how these investments can reduce costs and risks across the power system. Consumers and policymakers need a fuller assessment of FIT-ALL and GEA-ALL—one that looks beyond their direct costs to the savings renewable energy can generate and the risks it can help reduce, including exposure to imported fuel prices and higher wholesale electricity prices during periods of tight supply.

Sustaining competition in renewable energy procurement and keeping grid development aligned with new capacity will be critical to capturing these benefits as the market matures. Ultimately, FIT-All and GEA-All should be assessed based on their net value to consumers: whether they contribute to a more affordable and reliable electricity system over time.

ABOUT
The Institute for Climate and Sustainable Cities is a Philippine-based non-governmental organization that advances climate, energy, and low-carbon solutions to enable fair and climate-resilient development at the national and international levels.

CONTACT
Sanaf Marcelo, ICSC: media@icsc.ngo, +63 968 886 3466, +63 917 149 5649

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*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 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.

For more information, please stay tuned for the upcoming ICSC report: Navigating the Energy Trilemma: Advancing a Clean, Affordable, Secure Energy Future through Renewable Energy