Renewable energy (RE) projects under the Feed-in-Tariff (FIT) mechanism saved consumers ₱0.3916 per kilowatt-hour (kWh) across 2024 and 2025, according to energy think tank Institute for Climate and Sustainable Cities (ICSC).

In a statement on Wednesday, Aug. 26, ICSC highlighted that these savings are nearly double the recently elevated FIT Allowance (FIT-All) rate of ₱0.2073 per kWh charged to consumers.

The organization noted that FIT-supported green power generated an estimated ₱99.2 billion in wholesale electricity market savings over the same two-year period at the system level. The figure accounts for nearly half of the ₱220.5 billion total FIT-All collections paid by consumers since the tariff was introduced in 2015.

ICSC added that total savings since 2015 are likely far higher, proving that cheaper electricity has offset the cost of funding renewable projects.

“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 Pedro Maniego, Senior Policy Advisor at ICSC.

“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.

ICSC attributed the net system savings to the steep cost reduction of renewables. Early solar developments under initial FIT rounds were contracted at around ₱9.68 per kWh in 2014—roughly ₱12 per kWh in current inflation-adjusted figures. Today, competitive bidding under the Green Energy Auction (GEA) program delivers new solar projects within the ₱3 to ₱4.48 per kWh range.

Market data further indicates that variable renewables exert strong downward pressure on the Wholesale Electricity Spot Market (WESM) during peak demand hours. Because solar and wind generation peaks during daytime hours, they displace more expensive fossil fuel-fired plants. Analyzing 2025 market operations, ICSC revealed that higher RE generation continuously reduced WESM settlement prices by up to 70% during periods of peak clean energy output.

The think tank added that emerging energy technologies, such as offshore wind, are poised to follow a similar cost-reduction trajectory through scale, technological advancement, and sustained market competition.

To fully capture these financial benefits, ICSC urged policymakers and energy regulators to evaluate mechanisms like FIT-All and GEA-All based on their net consumer value, while ensuring that grid expansion remains aligned with new generation capacity. (Gabriell Christel Galang)