The Energy Regulatory Commission (ERC) has approved an upward adjustment in the feed-in-tariff allowance (FIT-All) rate, effective March 2025. This, the ERC said, ensures the sustainability of renewable energy (RE) incentives, with the new rate increasing by P0.0351 per kilowatt hour (kWh) for consumers in on-grid areas.
The adjustment, which raises the FIT-All from P0.0838 per kWh to P0.1189 per kWh, comes in response to a depletion of the FIT-All fund, caused by persistently low prices in the Wholesale Electricity Spot Market (WESM). The FIT-All is collected from electricity consumers to support the incentives the government extends over RE projects, including those under the feed-in-tariff (FIT) and the Green Energy Auction (GEA) program.
The new rate was set after the National Transmission Corporation (TransCo) applied for a FIT-All increase for 2024. While the approved rate is lower than TransCo’s request of P0.1220 per kWh, it was deemed necessary to stabilize the fund, which has been under pressure due to lower-than-expected WESM prices. The ERC revised the FIT differential from a forecast P13.64 billion to P10.13 billion based on actual generation data in 2024, ensuring a more accurate and sustainable adjustment.
ERC chairman Monalisa Dimalanta assured the public that the regulator will continue to monitor the status of the FIT-All fund, noting that if market conditions improve, such as when WESM prices rise, the collection of the FIT-All may be suspended, as was done in December 2022.
Jose Layug Jr., president of Developers of Renewable Energy for AdvanceMent Inc., lauded the move, saying the decision reinforces investor confidence in the Philippine renewable energy sector. He emphasized the alignment of the adjustment with the Renewable Energy Law and the Supreme Court’s 2024 ruling upholding the FIT system as an essential mechanism for promoting renewable energy development.
The rate increase is projected to ensure a stable and reliable funding mechanism for renewable energy projects, supporting the Philippines’ ongoing transition toward more sustainable energy sources.
