LAST month, the nation’s largest distribution utility caused a bit of a stir when Larry Fernandez, vice president and head of utility economics for the Manila Electric Co. (Meralco), told a Senate committee that the company supports stricter regulation of rooftop solar installations, including standardization of key components, certification of installers, and a “crackdown” on so-called “guerrilla” installations, those that are done without registration and the corresponding building and safety permits. As I wrote at the time, even though that is what Fernandez literally said, it was reported in such a way as to cast Meralco as being opposed to rooftop solar, while omitting some context that would have clarified the utility’s legitimate concerns about its uncontrolled growth.
Although little more has been said about the topic since that Senate hearing in early May, the term “guerrilla solar” has come to mind for me lately, as I moved to a new location a couple of weeks ago, and spent a couple of days last week in Cebu. In both the neighborhoods surrounding the complex I now live in and in the parts of Cebu that I traversed last week, the proliferation of what I would term “small solar” is hard to miss. Every other house or small business seems to have an installation of some kind or another; a solar panel or two on the roof, or one or two small ones of the sort that can power a rechargeable light or fan installed in some fashion.
These are not energy consumers that would be considered part of the upper strata of the economic pyramid. The installations one can see are relatively inexpensive, ranging from a few hundred pesos to perhaps a few thousand. Whether the reliability of something purchased at a bargain price from Shopee or TikTok Shop is good enough is certainly a question, but the fact that people are buying these things is significant.
The only other country where I have seen the term “guerrilla solar” pop up in the news is Germany, and it turns out that it is a big business there. Germany is the current global leader in what are called “plug-in” solar installations; the official count of them is just over one million, and there are perhaps two or three times that number that have not been counted by utilities or the government.
The boom in plug-in solar installations began in 2022 when energy prices in Germany skyrocketed due to the Ukraine war. A lot of that energy has been replaced by renewable energy, but that has not reduced costs by much, and the ongoing strife in the Persian Gulf has also helped to keep electricity prices high. Plug-in solar is different than what we normally see here in the Philippines; a typical entry-level system costs between $500 and $1,000, and consists of a panel generating between 300 and 800 watts connected to a microinverter that plugs directly into a standard wall outlet.
If the panel is mounted in a good location, it can offset between 10 and 20 percent of a household’s electricity demand from the grid, although in practice the average is somewhat lower than that. A common selling point is that the plug-in system can usually offset a home’s “vampire” usage, the continuous baseline load for things such as internet equipment, refrigerators, digital displays and control systems on other appliances, and the like. The savings are relatively modest, perhaps $10 to $15 per month depending on the conventional cost of electricity, meaning that the system will pay for itself in four to five years in most cases. Plug-in systems can work with net metering to allow the customer to sell excess power back to the grid, but this does not seem too commonplace, as most systems simply do not generate enough power to make it worthwhile.
Where plug-in systems are described as “guerrilla solar” is when they are installed in places where they are typically not allowed, such as apartment balconies. This is apparently a growing issue in Germany, and part of the reason there is increasing pressure from utility companies and public safety officials to crack down on them. Since plug-in solar is an entirely off-the-shelf, do-it-yourself system, officials worry about the safety of the products being sold and whether they are being properly connected, especially in older buildings. In addition, home solar of any type complicates supply and distribution management for the utility, if it is unaware that these systems are in use. This was a point raised by Meralco last month, although it probably could have been explained better.
Just as with Meralco here, the public perception of the pushback from utilities and regulators in Germany has been perceived by the public as an effort to quash small solar installations. That may be the case in Germany, although I would not necessarily assume that, but for Meralco it really is not. After all, Meralco has its own rooftop solar subsidiary, called MSpectrum, which offers an extremely competitive package for consumers interested in going that route. If anything, Meralco’s concern for competition applies to that part of its business, and not the inconsequential impact rooftop solar has on its conventional distribution business.
I have said this before, and it bears repeating. It is perfectly reasonable that government regulators — primarily the Department of Trade and Industry in this case — insist that solar equipment is properly certified and safe, and that it is installed by qualified suppliers and contractors. It is also perfectly reasonable for regulators — the Energy Regulatory Commission in this case — to insist that solar installations, whether they are of the net-metering type or not, be properly registered, so that electricity demand on the upstream systems, Meralco’s distribution grid and the larger national grid, can be efficiently managed. Little things like solar-powered lights or batteries can be exempted, but solar systems actually intended to offset a significant part of a consumer’s demand on the grid should not.
By the same token, within those reasonable bounds, the uptake of small solar systems should be encouraged and facilitated by minimizing red tape and eliminating costs not related to the purchase and installation of the equipment. Policymakers and regulators should be more sensitive to consumers’ concerns over energy costs — they are not particularly sensitive now, despite what they think of themselves — and there is another important reason not related to economics that needs to be taken into account. Encouraging households and businesses to adopt solar if they are able encourages public participation in the energy transition; in a small, mostly symbolic way, perhaps, but it helps to change mindsets.
Bluesky: @benkritz.bsky.social
Website: www.badmannersgunclub.com