Financing models determine Philippine solar growth

Banks installers and policymakers must broaden funding channels to convert rooftop solar demand into installations.

Philippine rooftop solar growth will depend less on equipment prices than on whether banks, installers, utilities and public lenders can build financing models that reduce upfront costs and broaden access.

A Pulse Asia survey found that 93% of Filipinos want affordable rooftop solar, but financing remains the main constraint between demand and installations.

Atty. Monalisa Dimalanta, Senior Advisor on Energy Literacy and Energy Democracy at the Institute for Climate and Sustainable Cities, said households face an initial expense despite lower panel and inverter prices.

“Financing is the biggest barrier at this point because of the high upfront costs,” she said.

Alnie Demoral, Analyst at Ember, said longer repayment periods could allow electricity bill savings to offset part of monthly repayments and transfer system ownership to customers.

The commercial opportunity will require multiple funding channels. Solar loans were amongst the earliest options because banks could adapt consumer-credit models, but leasing, instalment plans and installer-led financing can serve customers who do not qualify for conventional loans.

Utility-backed programmes could use electricity-consumption and payment data to assess customers, although many electric cooperatives lack the financial capacity to offer them at scale. The transcript does not identify which model is growing fastest because installations are not tracked by financing type.

Dimalanta pointed to pension-backed facilities, bank partnerships and installer financing as complementary routes rather than substitutes.

Policy support could improve project economics. She called for consumer-owned rooftop systems to receive the same zero-rated value-added tax treatment as utility-scale solar instead of the 12% levy, alongside stronger local-government incentives.

Demoral prioritised low-interest funding supported by government guarantees or development banks.

“The next step is to expand these mechanisms to cover more consumer groups and make the application process simpler,” Demoral said.

The next test is whether financing can scale without concentrating credit risk.