Philippines Renewable Energy Market Size (2025-2030)

The Philippines Renewable Energy Market was valued at USD 2 billion in 2024 and is projected to reach a market size of USD 5 billion by the end of 2030. Over the forecast period of 2025-2030, the market is projected to grow at a CAGR of 20.11%.   

The Philippines' renewable energy industry is growing strongly due to government programs, growing awareness of the environment, and growing demand for sustainable energy options. With its high natural resources like sunlight, wind, and water, the Philippines has a good potential for the growth of clean energy. The Philippine Renewable Energy Act and other incentive schemes have promoted investments in solar, wind, hydropower, and bioenergy projects, lowering the country's reliance on fossil fuels and improving energy security. Moreover, technological progress, falling costs of renewable energy infrastructure, and corporate sustainability commitments are driving the shift toward a greener energy future. With the nation set to meet its renewable energy ambitions, increased advances in infrastructure, grid modernization, and policy backing will play an important role in securing long-term growth and stability within the market.

Key Market Insights:

• The Philippines is the world's second-largest producer of geothermal energy, with an installed capacity of approximately 1,480.19 megawatts (MW), accounting for about 20% of the country's total renewable energy capacity. However, the development of additional geothermal resources faces challenges such as high initial exploration costs and community opposition due
• To attract more foreign investment, the Philippines has implemented policy reforms, including allowing 100% foreign ownership in the renewable energy sector. This regulatory change has spurred interest from international investors. For instance, Singapore's GIC and Australia's Macquarie are exploring the sale of their approximately 30% stake in the Philippine renewable energy firm Energy Development Corp (EDC) for an estimated $2 billion, reflecting the sector's growing appeal.
• In the medium term, trends including growing demand for renewable energy, lower tariffs for renewable energy, and government policies are expected to propel the market in the forecast period.Conversely, the nation's grid inefficiencies and numerous islands are supposed to hold the market back.
• However, the increasing emphasis on reaching zero-emission goals, such as targets for raising clean power production, will most likely pose substantial opportunities in the Philippine renewable energy industry.

Philippines Renewable Energy Market Drivers:

The Philippine government has implemented several policies and incentive programs to accelerate the growth of renewable energy.

The government of the Philippines has enforced various policies and incentive schemes for the faster development of renewable energy. The Renewable Energy Act of 2008 offers tax benefits, duty-free importation, and feed-in tariff (FiT) schemes to promote solar, wind, hydro, and bioenergy project investments. On top of this, the Green Energy Option Program (GEOP) enables customers to opt for renewable energy supplies, which drives demand further. To raise the proportion of renewable energy in the energy mix to 35% by 2030 and 50% by 2040, the government continues to launch initiatives like net metering for domestic consumers and competitive renewable energy auctions, making the sector appealing to both domestic and international investors.

Technological advancements and economies of scale have led to a significant reduction in the cost of renewable energy technologies.

Technological advancements and economies of scale have led to a significant reduction in the cost of renewable energy technologies, making them more accessible and financially viable. The cost of solar photovoltaic (PV) panels and wind turbines has dropped due to global innovations and increased production efficiency. This decline has encouraged widespread adoption among businesses and households, making renewable energy a cost-competitive alternative to traditional fossil fuels. The affordability of battery storage solutions has also improved, enabling better energy storage and grid stability. As the cost of renewable energy continues to decrease, more industries and individuals are likely to transition towards clean energy, further boosting market growth.

Philippines Renewable Energy Market Restraints and Challenges:

One of the biggest challenges in the Philippines’ renewable energy market is the lack of infrastructure and grid integration capabilities.

One of the largest challenges in the Philippines' renewable energy industry is the absence of infrastructure and grid integration capabilities. Most renewable energy projects are situated in remote locations where there are poor transmission and distribution networks, creating inefficiencies and losses in energy. The intermittent variability of solar and wind power further creates grid stability problems, necessitating advanced energy storage technologies and upgraded infrastructure. Furthermore, bureaucratic red tape and long permitting processes hinder the roll-out of renewable projects. In the absence of large-scale investments in grid modernization, transmission lines, and smart energy management systems, the full potential of the renewable energy industry may not be exploited, restricting its contribution to the national power grid.

Philippines Renewable Energy Market Opportunities:

The renewable energy sector in the Philippines offers immense opportunities for expansion, fueled by supportive government policies, rising private sector investments, and technological improvements in clean energy. The ambitious renewable energy goals of the country -35 % by 2030 and 50% by 2040 have created opportunities for large-scale solar, wind, hydro, and bioenergy projects. The Green Energy Auction Program (GEAP) and Net Metering Policy stimulate private and household investment in renewable energy through competitive price structures and the ability of the users to sell excess energy back to the grid. In addition, the growth of corporate sustainability efforts has triggered companies to adopt renewable energy technologies, with a huge boost in demand for Power Purchase Agreements (PPAs) and clean energy alliances. The declining prices of solar panels, wind turbines, and energy storage technologies make renewable energy affordable for urban and rural communities alike, allowing for decentralized energy generation and decreased dependence on fossil fuels. Offshore wind farms, floating solar farms, and improvements in green hydrogen technology also provide new opportunities for innovation in the industry. The Philippines' rich natural resources, coupled with growing investments in smart grids and battery storage, further increase the prospects for a stable and sustainable renewable energy infrastructure. With continuing growth in energy demand, the transition to microgrids and hybrid renewable energy systems offers an answer to energizing remote locations and islands, alleviating energy poverty while sustaining the environment. These prospects place the Philippines at the forefront of the international clean energy transition, drawing in local and foreign investors to create a cleaner and more sustainable power industry.

PHILIPPINES RENEWABLE ENERGY MARKET REPORT COVERAGE:

Philippines Renewable Energy Market Segmentation:

Philippines Renewable Energy Market Segmentation: By Type

• Hydro Power
• Wind Power
• Solar Power
• Bioenergy
• Others

The Philippines' renewable energy sector is classified into different types, such as hydropower, wind power, solar power, bioenergy, and others. Hydropower is still a leading segment because of the high water resources available in the country, with many small- and large-scale hydroelectric power plants contributing immensely to the energy mix. Solar power has experienced sharp growth, spurred by government incentives and declining installation costs, and has become a favourite among residential and commercial consumers. Wind power is also growing, most notably in provinces like Ilocos Norte, where effective wind conditions allow large-scale wind farms to be feasible. Bioenergy, which comes from organic and farm waste, is a main component of the country's drive towards sustainability through a solid alternative to fossil fuels. Other renewable sources like geothermal energy complement the country's diversified clean energy mix, underlining its vision for energy security and sustainability.

Philippines Renewable Energy Market Segmentation: By End User

• Industrial
• Residential
• Commercial

The renewable energy market in the Philippines caters to industrial, residential, and commercial end-users. The industrial segment is the biggest user of renewable energy, with manufacturing, mining, and other energy-intensive sectors looking for cleaner energy alternatives to lower operational expenses and carbon emissions. The residential segment is also seeing a boom in solar panel installations, aided by net metering policies that enable homes to sell surplus electricity back to the grid. While this is happening, the commercial market, comprising businesses, shopping centres, and office buildings, is increasingly turning to renewable energy to reduce electricity costs and contribute to environmental sustainability. Government regulations and business ESG (Environmental, Social, and Governance) initiatives also promote the use of renewable energy among all end-use segments, facilitating long-term growth in the market.

Philippines Renewable Energy Market Segmentation: Regional Analysis:

The Philippines Renewable Energy Market is regionally divided into Luzon, Visayas, and Mindanao, contributing individually to the nation's energy blend. Luzon covers the majority of the market with significant renewable energy projects, such as large hydroelectric facilities like San Roque Dam (411 MW), Magat Hydroelectric Power Plant (360 MW), and large solar and wind farms. The Visayas comes next with high geothermal potential, specifically in Leyte and Negros Islands, where main plants such as the Tongonan and Palinpinon Geothermal Power Plants are located. The area is also experiencing an increase in solar power, especially in Negros Occidental, which has become known as the "Solar Capital of the Philippines." Mindanao, historically dependent on hydropower, is diversifying now with solar, wind, and biomass developments, especially in Davao and Bukidnon. The government's initiative towards renewable energy growth, coupled with increasing investments in off-grid solutions, is leading to development in all regions, providing a greener energy future for the nation.

COVID-19 Impact Analysis on the Philippines Renewable Energy Market:

The COVID-19 pandemic resulted in a double-edged effect on the Philippines' renewable energy sector, leading to short-term setbacks but also emphasizing the imperative for a more sustainable and more resilient energy sector. Construction delays, supply chain disruptions, decreased availability of the workforce, and lockdowns hampered the pace of renewable energy project development during the lockdown periods, pushing back government auction programs and private investment. Economic uncertainty and financial restrictions also impacted the funding of new projects, with companies and investors focusing on survival in the short term rather than long-term sustainability objectives. But the pandemic also underscored the significance of energy security and reducing reliance on fossil fuels. With oil price volatility worldwide and the growing demand for electricity in residential settings caused by telecommuting, solar and wind energy became popular as cheap and clean alternatives. The post-pandemic recovery accelerated investments in clean energy further, with the government leveraging policies like the Green Energy Option Program (GEOP) and renewable energy auctions to invite private sector investment. The crisis acted as a wake-up call, propelling policymakers, companies, and consumers toward a cleaner and more resilient energy transformation, eventually reinforcing the long-term prospects of the renewable energy industry in the Philippines.

Latest Trends/ Developments:

The renewable energy industry in the Philippines is presently experiencing major progress, typified by record levels of installations, huge foreign direct investments, and policy moves as a strategy. In 2024, a record-high installation of renewable capacity was recorded, highlighting the efforts of the Philippines in utilizing cleaner energy. One development that stands out is the $15 billion Philippines-UAE's Masdar partnership to build renewable energy projects to supply up to 1 gigawatt of clean energy by 2030, with further potential expansion up to 10 gigawatts by 2035. The proactive move by the government consists of the third round of the Green Energy Auction (GEA-3), which received bids worth more than 7,500 megawatts, which was far more than the original target and testifies to investor confidence. These trends underscore the Philippines' strategic push to increase its renewable energy capacity, decrease dependence on fossil fuels, and meet its ambitious goals of 35% renewable energy contribution by 2030 and 50% by 2040.

 Key Players:

1. Vena Energy
2. Solaric Corp.
3. Solar Philippines Power Project Holdings Inc.
4. AC Energy Inc.
5. Vestas Wind Systems AS
6. Aboitiz Power Corporation
7. Trina Solar Co. Ltd.
8. Solenergy Systems Inc.
9. National Power Corporation