Evaluating the Feed-in Tariff Policy in the Philippines

Abstract

To address the problems of climate change and energy security, the Philippines enacted the Renewable Energy (RE) Act of 2008. The law mandated the Feed-In Tariff (FiT) policy, which was designed to provide a guaranteed fixed price to RE investors for 20 years to develop renewable technology. This paper aims to evaluate the effectiveness of the FiT policy in promoting renewable energy development in the Philippines by assessing its costs and benefits. Data show that while the FiT has led to an increase in RE generating capacity, the share of renewable energy in the country has been declining since 2011. The findings also suggest that the Philippines has incurred a net social cost from its implementation of the FiT.

Evidence-Based Policy Making: Analysis and Policy Recommendations for how the Philippines can manage a Cost-Effective Clean Energy Transition.

“…Blended nance is an option for policymakers as it allows the government to work with investors to create the best incentives that work for both parties, as shown in table 1. Then as for FiT schemes, the usage of them hasn't been as successful, as renewables dropped from 45% to 21% in the energy mix since 1990 (Lagac and Yap 2020), but there is potential for success using them.…”

The feed-in tariff (FIT) policy to improve renewable energy utilization: An analysis of FIT implementation in ASEAN countries from renewable energy growth, decarbonization, and investment perspective

“…This FIT provides guidelines on the mechanics of a contract model with fixed fees and adjustments according to the year of technology. Initial FIT rates for 2020 are 8.53 PHP/kWh for wind, 9.86 for solar and 5.90 PHP/kWh for hydro (Lagac & Lagac, 2020 ). In the Philippines, FITs are set as fixedprice energy tariffs for every type of renewable energy.…”