Banking on the Sun: Will Solar Deliver?

In November 2024, construction began in Nueva Ecija on the MTerra Solar Project, set to claim the title of the world’s largest solar and battery storage complex.

President Ferdinand Marcos Jr. led the launch of the 3,500-hectare MTerra Solar Project, which spans five municipalities in Nueva Ecija and Bulacan. Once complete, it is expected to supply 3,500 megawatts (MW) of solar power and store 4,500 megawatt-hours (MWh) in batteries, linked to the grid via a 13-kilometer transmission line.

Backed by a ₱200-billion investment, the MTerra Solar Project in Nueva Ecija will roll out five million solar panels over two phases, set for completion in 2026 and 2027. Once operational, it aims to power 2.4 million homes.

While the plan appears impressive on paper and aligns with the global shift to renewable energy (RE), the lingering question remains—can we truly rely on solar as a dependable solution?

(Also read: Abra Lights up with ₱2.5M Solar Power)

Solar dominates PH RE push

In early 2025, there were 3,923 planned RE facilities across the Philippines. Among these, 3,060 are solar projects, by far the most common RE technology under development. Wind comes in second with 759 planned projects, while geothermal constitutes 68 projects; hydropower and biomass trail even further.

Over the past decade, around half of the P280 billion invested in renewables went toward solar, followed by wind at about 19%.

Solar leads the Philippines’ RE pipeline as it can be built in under a year, unlike hydro or geothermal projects that take years due to complex site work and drilling.

On the regulatory side, the government has made solar particularly attractive. The Department of Energy (DOE) has streamlined permitting for solar projects by easing import duties, simplifying approvals, and fast-tracking grid connection through measures like the “Green Lane” and certificate of authority systems.

Additionally, the Philippines enjoys abundant solar energy, with most regions receiving between 4.5 and 5.5 kWh/m² per day of solar irradiation throughout the year. Meanwhile, global solar photovoltaic (PV) costs have plunged 90% since 2010, establishing solar as the most affordable RE option in many markets.

(Also read: Quirino’s First Solar Pump Revives 20+ Hectares)

When the sun isn’t enough

Renewable sources provided around 22% of the Philippines’ electricity supply in 2023. RE Global states that in terms of generation, hydro presently leads the pack with 3,836 MW, followed by solar at 2,857 MW and geothermal at 1,952 MW.

Generation capacity refers to the total amount of electricity a technology can produce, not the number of projects in operation. Solar may have more individual installations than hydro or geothermal, but each facility typically produces less power, resulting in a smaller overall capacity.

Solar’s slower rise in generation is largely due to inherent challenges. Its intermittent nature—dependent on sunlight—requires costly energy storage or backup systems to maintain reliable power. Integrating solar into the grid also poses stability issues, demanding advanced technologies and supportive regulations. Despite dramatic cost reductions, these factors continue to limit solar’s share.

As of 2023–2024, solar and wind combined contributed just about 2.5% of the Philippines’ electricity generation, far below both global and regional averages.

When deployed at scale, these limitations become evident in real-world cases. These scenarios underscore how weather variability, grid constraints, and storage costs can turn solar’s promise into a logistical challenge.

Iberian Peninsula Blackout

In April, the Iberian Peninsula was plunged into its worst blackout in over two decades, disrupting daily life across Spain, Portugal, and parts of France. While the exact cause remains under investigation, early reports suggest the incident began in Spain’s solar-heavy southwest, where two major generation losses occurred within seconds. The disruption appears to have rippled through the grid, severing the connection between Spain and France and triggering a nationwide collapse.

The event has reignited debate over the complexities of managing grids with high shares of RE. Traditional coal, gas, and nuclear plants produce steady rotational inertia through spinning turbines, helping maintain the grid’s frequency near the critical 50 Hertz (Hz) mark.

By contrast, wind and solar farms lack this mechanical inertia, making frequency stability harder to maintain during sudden power losses. Without quick corrective measures, even brief fluctuations can trigger cascading shutdowns—exactly the kind of vulnerability this blackout may have exposed.

Kerala, India’s rooftop solar strain

In Kerala, the boom in grid-tied rooftop solar has exposed deep financial and technical tensions. Despite becoming India’s fourth-largest rooftop solar state, the system is straining under the mismatch between daytime production and peak evening demand.

Consumers feed excess energy into the grid during off-peak hours, then draw more expensive power at night—architecting a fiscal squeeze that cost the Kerala State Electricity Board (KSEB) over ₹500 crore (~US$60 million) in 2024–25 and triggered a tariff hike.

Without mandatory battery storage on systems larger than 3 kW, losses could escalate, potentially doubling this surcharge by 2034 to 2035. Voltage surges from midday power gluts are putting household appliances at risk, and intermittent shutdowns of solar plants may be necessary to safeguard grid stability.

Ivanpah Solar Project Underperformance in the US

The Ivanpah Solar Electric Generating System in California, once hailed as one of the most prominent concentrated solar power (CSP) ventures, struggled dramatically during its first year of operation in 2014. Although designed to generate over 1 million MWh annually, the facility produced only about 254,000 MWh from January to August, just 25% of expectations, primarily due to unexpectedly cloudy weather and mechanical teething issues.

The plant’s operators acknowledged that non-stop sunshine failed to materialize and cited various equipment challenges that reduced plant availability. U.S. Energy Information Administration data showed the plant generated more power during sunny summer months yet remained well under its projected output.

Diverse mix needed

Solar power cannot operate at night and underperforms during cloudy or rainy days. This is reflected in its low capacity factor, typically around 20%, meaning a 100 MW solar plant effectively generates only 20 MW on average. In contrast, coal and geothermal plants deliver much higher utilization, with coal at 57 to 68% and geothermal at 65 to 71%.

The Philippines still operates many relatively young coal-fired plants, making up over 60% of total generation, with an average remaining lifespan of 27 years. These assets are unlikely to be retired early due to their capacity to reliably meet demand and their entrenched place in the energy mix.

Given the intermittency of renewables, LNG-fired power plants are increasingly seen as a cost-effective and flexible bridging technology. Natural gas-fired generation was up 25% year-on-year in early 2025 and is projected to climb 65% by 2030.

High electricity tariffs and the cost of integrating variable renewables make premature removal of fossil fuels economically risky. Upgrading the transmission system and modernizing the grid are long-term, capital-intensive processes.

These infrastructure constraints magnify the complexity of the Philippines’ clean energy transition. Even as investment in renewables like solar energy accelerates, the ability to deliver power reliably across an island nation hinges on overcoming deep-rooted structural bottlenecks.

“The grid is also highly fragmented due to the archipelagic nature of national geography, which presents a challenge for generation trying to reach rural areas and islands,” wrote Boston Consulting Group Managing Director Marko Lackovic. “Transmission line length grew by less than 0.6% per year from 2009, according to the National Grid Corp. of the Philippines. It’s difficult to imagine that growth rate aligning with expanding electrification and accelerated renewable energy ambitions.”

Sources:

https://www.philstar.com/business/2024/11/21/2401919/p200-billion-solar-farm-nueva-ecija-aims-be-worlds-largest

https://www.meralcopowergen.com.ph/mterra-solar-forms -partnership-for-community-development-in-nueva-ecija/

https://business.inquirer.net/501009/renewables-dominate-pipeline-of-new-power-projects-in-2025

https://business.inquirer.net/397730/p280b-invested-in-renewables-over-last-decade

https://www.pv-magazine.com/2025/02/17/philippines -banks-on-solar

https://www.philstar.com/business/2025/05/15/2443106/watts-next-philippines-going-full-throttle-green-energy-push

https://globalsolaratlas.info/map?c=12.811801,121.772461,5&r=PHL

https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2024/Oct/IRENA_Green_hydrogen_derivatives_trade_2024.pdf

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https://energy.sustainability-directory.com/question/why-is-intermittency-a-problem-for-solar