With a growing awareness of the environmental impact of fossil fuels and the need for sustainable energy solutions to meet our increasing energy demands, an increasing number of Filipinos are turning to solar power systems to fulfill their electricity needs. Furthermore, the relentless upward trajectory of electricity prices serves as a significant incentive for many to consider solar power systems as a viable solution to mitigate escalating energy expenses.
However, the pressing question remains: “How much does a solar power system cost in the Philippines?” Despite its numerous benefits, adopting solar power does require an initial upfront investment. In this article, we will initially present typical market prices for these systems and then delve into the factors that influence their pricing.
When exploring solar PV options, you’ll often encounter them marketed as ‘packages’ with specific kilowatt ratings. Examples of such packages may include “1KW grid tie systems.” These packages typically encompass system design, equipment, and installation labor as standard inclusions. Some installers may also offer additional services like net-metering, insurance or post-installation maintenance. These variations make it difficult to compare them side-by-side.
Regardless, let’s compare below what you’ll find as typical price ranges that correlate with the system size. For illustration, we provide some examples right off from the YUDA Marketplace. Note that this range accounts for variations in system type (grid tie vs hybrid vs off-grid systems), equipment quality and installation complexity.
Small Residential System (1-3 kW)
A small solar power system suitable for a typical household might cost between PHP 80,000 to PHP 200,000. Grid tie or On-grid Systems would be definitely cheaper than Hybrid or off-grid systems that would require additional batteries. Related read for the difference of off-grid vs on-grid: Which solar power type is suitable for me?
Medium Residential System (4-6 kW)
A medium-sized system capable of meeting the energy needs of a larger household or small business might range from PHP 250,000 to PHP 700,000.
Large Residential/Commercial System (7 kW and above)
For larger residential properties or commercial installations, costs can range from PHP 700,000 to several million pesos, depending on the size and complexity of the system.
Keep in mind that prices listed are as of October 2023. Solar power system costs are gradually decreasing globally due to advancements in technology, increased competition among suppliers and general economies of scale.
What factors affects the pricing of rooftop solar?
Now that you have an idea of what the typical market prices are, it is now crucial to delve deeper into the factors that can shape and influence pricing. This will empower you with the knowledge to discern why two seemingly similar systems might have contrasting price tags and hopefully, will enable you to make informed decisions and potentially uncover cost-saving opportunities when evaluating solar power options.
#1 System Size
This is the most basic and significant cost determinant. Simply put, the larger the system, the higher the cost. A larger system means more panels, more batteries, more wiring and more labor needed to set up. Also, larger systems with their higher kilowatt ratings, necessitate the use of more robust and higher-rated equipment capable of handling greater voltages and currents. In essence, you’re investing in a more extensive infrastructure to generate a greater amount of electricity.
#2 Quality of Components
The quality of solar panels, inverters, mounting structures, and other system components can vary widely. High-quality components often come with a higher upfront cost but can lead to better performance and durability over time. They might also offer enhanced performance and efficiency, ensuring that your solar power system generates electricity at optimal levels. If you are unable to perform a deeper technical assessment, it may be a safe option to stick with well known and established brands.
#3 Installation Costs
Labor and installation costs can vary depending on the complexity of the installation, location, and the experience of the installer. More intricate installations, such as those involving customized designs or challenging roof structures, typically require a higher level of expertise and labor hours. Your installer also may charge an additional premium if your property is located in a remote or hard-to-reach area. Highly skilled and experienced installers may charge premium rates for their services, justified by their ability to ensure efficient, safe and error-free installations.
#4 Financing Options
The method of financing your solar power system can have a significant impact on the overall cost. Some installers provide installment plans with payment terms ranging from 12 to 36 months. While these plans can ease the burden of upfront payments, it’s essential to note that, over time, the total cost of the system may increase due to accrued interest. Therefore, it’s crucial to carefully review the terms of these installment plans to ensure you secure the best interest rates that align with your financial capacity. By doing so, you can strike a balance between managing immediate costs and minimizing the long-term financial impact of your solar power investment.
#5 Other Add-ons
When evaluating package offerings for solar power systems, it’s essential to check about additional inclusions beyond the basic components. Some packages may appear to cost higher because they include other valuable services like net-metering, insurance or post-installation maintenance. Be aware that while these services offer substantial benefits, they may come with associated costs, such as the typical Php 50,000 fee for net-metering application processing and an annual insurance premium starting at Php 3,000. Careful consideration of these factors can help you make a well-informed decision when choosing the right solar package for your needs.
We hope that this article helped you gain some idea on the current market prices are and what are the possible factors behind the pricing that you see from installers. As prices continue to drop, YUDA hopes more households and businesses will be able to harness the power of the sun to meet their energy needs.
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