At a glance, the Philippines has done everything right. But why aren’t renewable projects taking off as fast as they should?

The Energy Box Asia panel discussion titled “Government Policies & Incentives: Unlocking More Solar & Storage Investments?” held on May 20, 2025, at Conrad Manila zeroed in on a sobering paradox: the Philippine government has lined up a suite of renewable energy incentives that rank among the region’s most generous—and yet, progress on solar and storage deployment remains sluggish.

Panelists representing developers, financiers, and grid experts stepped into the spotlight to examine the gaps between policy and practice. Their message to the energy sector was clear: execution, not just incentives, is where the battle for renewables will be won or lost.

Robert Marlon Pereja, VP and General Manager of EEI Power Corporation, put it plainly: “Actually, in terms of incentives, I would say that everything is in place, and the Philippines government, the DOE, has done a tremendous job in putting in place incentives as enablers for developers such as ourselves.”

Those enablers include income tax holidays, VAT exemptions, and duty-free importation. Yet Pereja underscored that policy alone doesn’t break ground. Land acquisition remains one of the thorniest challenges. “There is no parcel of land here in the Philippines that is perfect. If you find an ideal location, there is no such thing as a perfect green title.”

Transmission access is another chokepoint. Developers must negotiate every meter of right-of-way for transmission lines. “As private developers, we don’t have that right to eminent domain,” he said.

Incentives vs. market dynamics: the profitability puzzle
While generous incentives are pivotal, they don’t guarantee bankability. Pereja highlighted this tension when he pointed to spot market volatility: “Despite the challenges of how the wholesale electricity spot market has been behaving since January… average WESM would be around 2 pesos to 2.45 pesos per kilowatt hour, which is really, really low for daytime peak.”
In this context, tax breaks become not just sweeteners, but lifelines. “If you get seven years of income tax holiday, that improves your equity IRR immensely,” Pereja emphasized.

Yet incentives lose force when auction prices don’t reflect economic realities. “We’ve actually written a position paper… on what are the reasonable GEAP prices. Unfortunately, what was initially published… are way, way below what we computed as an industry.”
Grid reliability: everyone wants it—but who pays?
A question from the audience about grid capacity turned the panel’s attention to infrastructure investment—and its political cost.

Pereja’s response was candid: “We keep on complaining. ‘We should do this. We should spend more on transmission.’ But we’re not willing to accept the fact that something’s got to give… It’s not really the fault of NGCP or the fault of the regulators. I think, as consumers… we have to give our contribution.”
Grid improvements mean rate hikes. The public wants stable power but resists the price tag. That tension, Pereja suggested, is holding back vital infrastructure upgrades.

Storage and system stability: the next frontier
Beyond permitting and pricing, technical resilience loomed large. Energy storage isn’t a luxury—it’s emerging as a necessity.
Pereja called for stronger support mechanisms for grid-forming technologies. “We need to put in grid-forming capabilities like energy storage, like synchronous generators that provide enough inertia. That costs a lot of money.”

Spain’s blackout in April—brought up repeatedly during the session—served as a cautionary tale. Without adequate storage or system compensators, grid volatility can quickly translate into national outages.
Andre Susanto of Quantum Power Asia argued that incentives must extend beyond just developers: “What about incentives to create more demand… emission standards, carbon taxes? That doesn’t depress prices because… you’re going to create additional incentives to do more projects.”
He further called out the need for utility accountability: “We need incentives to make sure that [grid operators] are creating demand as well for solar and storage.”

Susanto’s remarks pointed to a broader view of system responsibility—a web of aligned interests from generation to distribution.
When the discussion turned to public-private partnerships (PPPs), reactions were mixed. While the TerraSolar project is often held up as a poster child, panelists emphasized that PPPs aren’t a silver bullet.

Ceejay Hernandez of HSBC noted, “The challenge is really how capable the local government is… That’s where we see a lot of the bottlenecks in these kinds of ideas.”

Foreign developers, like ACCIONA’s Ignacio Domecq, echoed this with frustration. “We cannot work [on] flat land,” he said, pointing out a legal barrier that makes many ideal sites inaccessible to foreign firms.

What’s next? From alignment to action
Culminating the session, Pereja put the next step into sharp focus: “We’re no longer in the stage of asking for more incentives. What we need now is refinement—market-aligned pricing, simplified execution, and long-term clarity.”

That sentiment resonated across the panel. The Philippines has made significant progress on renewable policy—but unleashing solar and storage at scale will take more than regulation. It demands unblocking local barriers, realigning pricing, and inviting the whole energy ecosystem—developers, regulators, consumers, and financiers—to share the burden of transition.

Are current incentives enough—or is a deeper market restructuring needed? How should grid operators and local governments be held accountable? Share your insights and join the conversation with fellow energy sector leaders.

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