Business Renewables: Incentives for Companies
For years, renewable energy in the Philippines was marketed to businesses as a moral imperative. "Go Green," "Save the Planet," "Reduce Your Carbon Footprint."
That is all fine and good, but in 2025, the conversation has shifted. With commercial electricity rates in Metro Manila often breaching ₱12.00 to ₱15.00 per kilowatt-hour (kWh), renewable energy is no longer a Corporate Social Responsibility (CSR) slide. It is a financial survival strategy.
However, the transition involves significant CapEx. To soften the blow, the Philippine government offers a suite of incentives under laws like the Renewable Energy Act (RA 9513) and the Energy Efficiency and Conservation Act (RA 11285).
The problem? Most business owners don't know they exist, or they assume the paperwork is too complex to bother with.
Here is a blunt, practitioner’s guide to the incentives available for Philippine companies right now, and how to actually use them.
1. The Fiscal Heavyweights (RA 9513)
If you are installing a large system (typically 100kWp and up), you should look into registering your project with the Board of Investments (BOI). If approved, you unlock the "Big Three" fiscal incentives designed to lower your ROI period.
Income Tax Holiday (ITH)
This is the headline incentive. Under the law, registered RE developers—including companies installing for "Own-Use"—can be exempt from income tax for the first 7 years of commercial operation.
The Reality: This is not automatic. You must register with the DOE and the BOI before you commission the project. For a small 20kW system on a coffee shop, the administrative cost of compliance (annual reports, audits) might outweigh the tax savings.
Best For: Large factories, cold storage facilities, and malls where the system size is 500kWp+.
Duty-Free Importation
Solar panels and inverters are generally imported. If you are a BOI-registered entity, you are exempt from the tariff duties on this equipment.
The Reality: Most reputable installers already handle this on their end. They import the container duty-free and (theoretically) pass the savings to you. However, if you are procuring the equipment yourself for a massive project, this exemption is critical.
VAT Zero-Rating
This has been the most confusing incentive in recent years. Technically, the sale of renewable energy equipment and the power generated is VAT Zero-Rated.
The Update (2025): Recent clarifications under the CREATE MORE initiatives and BIR regulations have tried to streamline this. Domestic enterprises (not just exporters) can avail of this if registered.
Why It Matters: That 12% VAT is a huge chunk of your cash flow. On a ₱5 Million project, that’s ₱600,000. Ensuring your installer bills you correctly (or provides the right documentation for you to claim the refund) is essential.
For a detailed look at how these upfront numbers affect your bottom line, review our breakdown of commercial solar costs.
2. Operational Incentives: Net Metering & Zero Export
These aren't tax breaks, but they are regulatory mechanisms that monetize your solar production.
Net Metering (For Systems < 100kW)
If your business is small—say, a bank branch or a small office—and your system is under 100kWp, you can apply for Net Metering.
How it works: When your office is closed on Sundays, your solar panels are still working. The excess power flows back to the grid (Meralco, VECO, etc.).
The Incentive: The utility pays you for this power (in the form of bill credits).
The Catch: They don't pay you the retail rate (e.g., ₱12/kWh). They pay you the "blended generation rate" (approx. ₱6-7/kWh). It’s not a 1:1 swap, but it prevents that Sunday energy from being wasted.
The "Zero Export" Strategy (For Systems > 100kW)
If your system is larger than 100kW, you are legally not allowed to export power unless you register as a Generating Company (GenCo) with the Energy Regulatory Commission (ERC). That process is a nightmare of paperwork.
The "incentive" here is a technical loophole called Zero Export. By using a smart limiter, you can install a large system (e.g., 500kW) without the hassle of a Distribution Impact Study (DIS) or GenCo license, provided you guarantee zero watts go back to the grid.
Why do it? It speeds up your project timeline by months. You lose the Sunday export credits, but you start saving on your daily operations immediately.
Read more about whether this strategy fits your load profile in our article on zero export solutions.
3. The "No Roof" Incentives (GEOP)
What if you lease your building? Or you are in a high-rise BPO in BGC with no roof access? You can still get incentives through the Green Energy Option Program (GEOP).
The Threshold: If your monthly average peak demand is 100kW or higher, you are a "Contestable Customer."
The Benefit: You can fire your current distribution utility (for the generation supply) and sign a contract directly with a Renewable Energy Supplier (RES).
The Incentive:
Cheaper Rates: Often, RES rates are lower than the volatile WESM-exposed rates of the grid.
Tax Perks: The power you buy is VAT zero-rated (generation charge only).
Compliance: You get a certificate proving your operations are 100% green, which is vital for export-oriented businesses facing global supply chain audits.
4. Banking Incentives (Green Financing)
The private sector has stepped up where the government moves slowly. Philippine banks are currently flooded with "Green Bonds" and are aggressive in lending to renewable projects.
BPI, BDO, Security Bank: All have specific "Sustainable Energy" loan windows.
The Terms: These loans often feature longer tenors (up to 7-10 years) compared to standard commercial loans (3-5 years).
The Collateral: Some banks are now accepting the solar equipment itself as partial collateral, preserving your real estate assets for other uses.
This allows you to structure a Cash-Flow Neutral deal: your monthly loan payment is equal to or less than your Meralco bill savings. You essentially get the system for free after the loan term.
Check our guide on green financing options to see which banks are currently active.
5. The "Hidden" Incentive: Inflation Hedging
This is not written in any law, but it is the most powerful incentive of all.
When you install solar, you are effectively pre-paying for 25 years of electricity at a fixed price.
Grid Reality: Meralco rates have historically risen by 3-5% annually. In 2025, with global fuel volatility, that could be higher.
Solar Reality: Your cost of energy is fixed the moment you buy the system.
If your factory runs on solar, your "fuel cost" for the next two decades is locked in. Your competitors, who rely on the grid, will face rising costs every year. This competitive advantage is worth more than any tax holiday.
For a practical example of how this plays out for manufacturing, read our guide to factory solar.
How to Actually Claim These Incentives
Don't expect your installer to just "handle it" without your input. Claiming fiscal incentives requires active participation from your finance team.
Before You Buy: Check if your project size justifies a BOI registration. If it’s under 100kW, the administrative cost might not be worth the ITH.
During Negotiation: Ask your installer explicitly about "Duty-Free Importation." Are they passing those savings to you?
After Installation: Ensure your accounting team knows how to treat the asset. If you are under Net Metering, ensure the bill credits are actually appearing on your monthly statement.
Conclusion
The incentives for business renewables in the Philippines are robust, but they favor the organized. The government is willing to give you tax breaks, and banks are willing to give you cheap money, but you have to ask for them correctly.
Do not leave money on the table. Whether it’s a tax holiday or simply the ability to export your Sunday power, these mechanisms can improve your ROI by 15-20%.
Next Step: Gather your last 12 months of electricity bills. Look at your "Peak Demand" (kW). If it’s over 100kW, you have options—GEOP, Zero Export, or Open Access.