The Philippines, the rising star of the renewable energy market in APAC
The Philippines presents a highly promising market for the development of renewable energy projects, owing to its population of approximately 114 million and an economy that is growing at an impressive rate of 7.6% as of 2022. With the country experiencing rapid industrial growth and heightened demand for residential power, the potential for renewable energy projects is particularly attractive.
To give you an idea of how favourable conditions are, the average solar radiation in the Philippines varies between 1,500 and 2,000 kilowatt-hours per square meter per year. These levels of solar radiation are considered high and are ideal for solar power generation. It also receives about 2,000 to 2,500 hours of sunshine per year, which provides ample exposure time for solar energy collection.
Wind energy conditions are also very favourable with average wind speeds varying between 4 and 7 metres per second (m/s) in most coastal areas. Some regions can experience higher speeds, reaching up to 9 m/s, which is considered optimal for wind energy generation. The country experiences a season of strongest winds between the months of November and April, known as the Amihan season. During this period, the northeast trade winds blow more steadily and provide ideal conditions for wind energy production.
Foreign investors and developers used to have a major concern until last year, which was that the law mandated a minimum of 60% Filipino ownership. This meant that in order to undertake any projects, a foreign company would have to have a local partner with a controlling stake.
The policy requiring a minimum of 60% Filipino ownership in the renewable energy sector, has had a detrimental effect on foreign investment. This requirement has presented a major challenge for companies operating in this emerging market. As a result, the share of renewables in the energy mix has seen a significant decline from 34% in 2008 to 21% in 2021.
The Department of Energy (DOE) of the Philippines issued a circular on November 15, 2022, which amended the 2008 Renewable Energy Act by eliminating the provisions that previously prevented foreign companies from holding a majority or complete ownership of a renewable energy project. This modification has resulted in increased interest from investors and developers in the rapidly expanding market, making it one of the most attractive renewable markets in Southeast Asia.
In addition, the recently elected government under the leadership of President Marcos Jr. has set an ambitious goal of increasing the share of renewable energy sources in the country’s energy mix to 35% by 2030 and 50% by 2050. This commitment is evidenced by the latest Green Energy Auction (GEA-2), which will provide a total capacity of 11.6GW, with 3.6GW for 2024, 3.6GW for 2025, and 4.4GW for 2026.
The Country Manager of the Philippines, Gregory Lofamia says: “Vector Renewables must establish a presence in the Philippines to assist both foreign and local investors in the advancement of renewable energy projects. The government's unwavering commitment to renewable energy, which permits 100% ownership for RE projects and sets an ambitious target of achieving 35% RE capacity by 2030 and 50% by 2050, as well as its openness to exploring the untapped offshore wind energy market, make the Philippines an attractive location for Vector Renewables”.
Philippines is the third Vector Renewables’ office in the APAC region after Tokyo (2013) and Sydney (2018). We are confident in the Philippines and its renewable energy sector’s bright future and having supported numerous clients in all phases of the project lifecycle, from Technical Advisory during asset development to Asset Management of operating plants.
In case you require guidance with your projects, seek details on our services or wish to learn about our assistance in the progressing market of the Philippines, feel free to reach out to us at
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