The Philippines is a tropical South Asian country that holds enormous potential for utilizing renewable energy. It is already the world’s second-largest geothermal energy producer, and also the only country among the ASEAN countries to have a liberal energy market.
Situated along the Pacific Ring of Fire and having abundant natural resources and a growing economy, this archipelagic nation stands as an ideal destination for renewable energy investment.
From solar and wind power to geothermal and hydropower, the Philippines offers a diverse array of renewable energy sources that make it a prime location for forward-thinking investors.
Thus, here are the top reasons why the Philippines should be your number-one choice for renewable energy investment in 2024 and onwards.
So, let’s get energizing!
Top Reasons To Invest In Renewable Energy In The Philippines
The Philippines is a nation that suffered from overpopulation and tried to meet the energy demands of its growing residents. The country also witnessed environmental problems from the over-use of fossil fuels along, increasing the issue of rapid depletion.
It wasn’t until the landmark Renewable Energy Act of 2008 did the Philippines government took action to explore and develop the use of renewable natural resources.
This legislation aimed to achieve the following:
- Energy self-reliance
- Reduce the country’s dependence on fossil fuels
- Minimize exposure to price fluctuations
- Promote the adoption of clean energy to mitigate climate change
- Foster socio-economic development in rural areas
- Increase the utilization of renewable energy by providing fiscal and non-fiscal incentives
Fast-forward to 2024, the time is ripe for the Philippines to start exploring its rich and diverse natural energy options.
Even the Department of Energy has laid out its Power Development Plan where over 35% of the country’s energy mix will be renewable by the year 2030, increasing to 50% by 2040!
Moreover, 2024 is also a great year for investors, both foreign and local, to start taking advantage of the vast potential of renewable energy in the Philippines.
Why? Let’s look at the compelling reasons below.
1. Abundant Renewable Resources And Location
The Philippines boasts abundant renewable energy resources, including ample sunlight, strong winds, geothermal heat, and abundant water resources. With over 7,000 islands stretching across diverse landscapes, the country presents a rich tapestry of natural assets ripe for harnessing clean energy.
Also, situated in the Pacific Ring of Fire and along the typhoon belt, the Philippines enjoys strategic geographical advantages for renewable energy generation. Its location exposes it to ample sunlight and consistent wind patterns, making it an ideal location for solar and wind energy projects.
2. Government Support And Reduced Costs
The Philippine government has demonstrated a strong commitment to promoting renewable energy development through various incentives, including tax breaks, feed-in tariffs, and streamlined permitting processes. The nation is revising its Green Energy Option Programme (GEOP), which lets citizens decide whether to use renewable energy options for their electricity requirements.
Advances in renewable energy technologies, coupled with favorable investment conditions, have made renewable energy solutions increasingly cost-competitive compared to traditional fossil fuels. Investing in renewables in the Philippines offers long-term economic benefits and resilience against volatile fuel prices.
For example, an eligible company in the Philippines is entitled to the following benefits:
- Income tax holidays
- Exemption from any kind of taxes on imported spare parts
- Tax credits
- Employment of foreign individuals
- Simplification of customs processes
Additionally, under the newly launched Energy Investment Coordinating Council, for projects over USD 70 million, processing time will be less than 30 days, and the projects will also be granted the coveted status of “Energy Projects of National Significance” or “ENPS”.
Moreover, in November 2022, the government also allowed 100% foreign ownership in renewable energy projects. Thus, these supportive policies create a favorable investment climate for renewable energy projects.
3. Technological Innovations
With a huge renewable energy sector, the Philippines has become a hub for technological innovation and expertise in clean energy solutions. Collaborating with local partners and leveraging homegrown talent can enhance project efficiency and success. For example, some areas use hybrid power systems that combine solar energy with diesel, while others combine wind turbines with biomass along with energy storage solutions to fuel power requirements.
Another innovative solution is provided by a company called PXiSE. The company enables grid operators to handle large amounts of renewable energy and decentralized energy sources while ensuring safe and dependable electricity supply. They utilize their software to assist in improving operational planning.
By integrating additional solar or renewable energy sources along with weather forecasts, they can forecast energy requirements for the next 24 hours using machine learning. This capability aids in effectively scheduling resources for people.
4. Foreign Investment
With the Philippines government creating an open market for foreign investors in renewable energy, around 90% of the share in foreign investments will be in renewable energy. Moreover, the growth in the renewable energy sector here has attracted goliath foreign investors, the likes of David Russell, the CEO of Equis, which is also Asia’s largest infrastructure fund manager, who has commissioned the largest solar farm in South East Asia in none other than Cadiz City.
The Electric Power Industry Reform Act, which was passed way back in 2001, has also liberalized the power market, and now private companies in the Philippines hold over 60% of the shares in the market.
Thus, by choosing the Philippines as a destination for renewable energy investment, investors contribute to global efforts to combat climate change and accelerate the transition to a low-carbon future. The Philippines has the potential to emerge as a regional leader in renewable energy development, inspiring others to follow suit.
Final Thoughts
The Philippines offers a compelling proposition for renewable energy investment, driven by its abundant natural resources, supportive government policies, growing energy demand, and commitment to sustainability.
By harnessing the power of renewable energy in the Philippines, investors can not only achieve attractive returns but also contribute to a more sustainable, resilient, and equitable future for the Philippines and the planet as a whole.
Now, you can go solar easily, thanks to Nativ Technik’s seamless integration of high-quality solar panels for your home or business in the Philippines. Call us at +639176310032, or drop us a mail at wecare@nativtechniks.com
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