Receiving your first solar proposal is an exciting moment. Presented with detailed charts and figures, the eye is immediately drawn to the most compelling number: the projected savings. You see a figure that promises to slash your Meralco bill by thousands of pesos a month and a payback period that makes the investment seem like a guaranteed win.
But in a rapidly growing market with a wide range of providers, a crucial question arises: "Is this number real?" While the vast majority of solar installers in the Philippines are reputable professionals, some may use overly optimistic assumptions to make their proposals seem more attractive. The difference between a realistic forecast and an inflated one can mean the difference between a successful investment and years of financial disappointment.
As a consumer, you are not powerless. Verifying a savings estimate isn't about being a solar engineer; it's about being an informed and diligent customer. It's about knowing which questions to ask and which numbers to check. This guide will equip you with the tools to critically analyze any solar proposal, turning you into a savvy buyer who can confidently distinguish a bankable projection from a hopeful guess.
The Foundation: Deconstructing the Savings Calculation
Before you can verify a savings estimate, you must first understand how it's calculated. At its core, the formula is simple:
Total Savings = Total Energy Your System Produces (in kWh) x The Value of That Energy (in PHP/kWh)
Every savings projection you receive is built on these two fundamental components. Therefore, verifying the final savings figure means you must independently verify the legitimacy of both the production estimate and the value assigned to that production.
Part 1: Verifying the Energy Production Estimate
This is the technical side of the equation—the "supply" of your solar energy. A professional installer uses sophisticated software to model this, but you can sense-check their inputs with a few key questions.
1. Start with the Source: Your Electricity Bill
The entire design process must begin with your historical energy consumption. Any installer who provides a detailed proposal without first asking for at least 12 months of your electricity bills is taking a shortcut. Your past usage is the definitive baseline for sizing the system.
- Actionable Tip: Ask the installer to show you their consumption analysis. It should clearly state your average monthly and daily kWh usage based on your bills. If their baseline is a guess, every subsequent calculation is flawed. A professional analysis of your electricity bills is the non-negotiable first step.
2. Question the "Derating Factor" (Real-World Losses)
A solar system in the field never operates at 100% of its laboratory-rated capacity. A realistic production estimate applies a "derating factor" to account for inevitable real-world losses. A proposal that doesn't mention this is a major red flag.
Key losses in the Philippines include:
- Temperature: Solar panels lose efficiency as they get hotter. On a metal roof in the Philippine sun, this effect is significant.
- Shading: Even small shadows have a big impact.
- Soiling: Dust, dirt, and pollution can coat the panels, reducing output.
- Component Inefficiencies: Minor losses occur in wiring and during the DC-to-AC conversion in the inverter.
- Actionable Tip: Ask your installer: "What overall derating factor did you use in your simulation?" A realistic figure for the Philippines is typically between 15% and 20%. If their production estimates seem unusually high, it's likely because they've used a low or non-existent derating factor, presenting a "perfect world" scenario that will never materialize.
3. Demand to See the Shading Analysis
Shade is the number one variable that can destroy a system's performance. A vague assurance that "shade is not a big problem" is unacceptable. A reputable installer will perform a detailed scientific assessment.
- Actionable Tip: Request to see the shading report. It should include a "Solar Access" percentage (e.g., 94%), which tells you how much sunlight your roof receives after accounting for shade. Ask what tools they used (e.g., Solar Pathfinder, PVsyst software). If they cannot provide a comprehensive shading analysis, they have not done their due diligence, and their production estimate is unreliable.
Part 2: Verifying the Value of Your Solar Energy
This is the financial side of the equation—what each kilowatt-hour you produce is actually worth.
1. Calculate Your Own "Blended Rate"
Your installer will use a PHP/kWh rate to calculate your savings. You should verify this number yourself.
- Actionable Tip: Take your most recent Meralco or cooperative bill. Divide the "Total Amount Due" in pesos by the "Total kWh Consumption." This gives you your true, all-in "blended rate." For example: PHP 6,500 / 500 kWh = PHP 13.00/kWh. Compare your number to the rate used in the proposal. They should be very close. If their rate is significantly higher than yours, they are artificially inflating your potential savings.
2. Scrutinize the Electricity Escalation Rate
To project savings over 25 years, installers will often assume that utility electricity rates will increase over time. This is a reasonable assumption, but the rate they use is critical.
- Actionable Tip: Ask: "What annual electricity price escalation rate did you use in your long-term financial model?" A conservative, realistic rate is between 3% and 5% per year, which aligns with historical trends. Be extremely wary of proposals that use a high escalation rate (e.g., 8-10%) as this is a common tactic to make the long-term ROI look dramatically better than it likely will be.
Part 3: Verifying the Overall Financial Picture
Once you've checked the components, look at the final headline numbers—the Payback Period and ROI—with a critical eye.
1. Insist on a "Turnkey" Price
The payback period is calculated by dividing the total system cost by the annual savings. This is only accurate if the "total cost" is truly all-inclusive.
- Actionable Tip: Ask the installer to confirm in writing that their price is a "turnkey" cost that includes all equipment, professional fees, LGU permits, utility application fees, and VAT. A low initial quote that omits these "soft costs" will lead to a much longer real-world payback period.
2. Sense-Check the Payback Period
Based on 2025 market conditions in the Philippines, a realistic ROI and payback period for a typical residential system is between 4 and 7 years.
- Actionable Tip: If a proposal promises a payback period of 2 or 3 years, be highly skeptical. While not impossible for very large systems with high consumption, it is extremely rare for residential setups. A figure this low often indicates that the savings have been inflated or the costs have been understated.
3. Ask for Proof: References and Portfolios
The ultimate verification is real-world proof. A reputable installer will be proud of their past work and happy to let it speak for itself.
- Actionable Tip: Ask for references of past customers with systems of a similar size to the one proposed for you. A quick phone call to ask if their actual savings have matched the installer's projections is invaluable. Additionally, ask to see their project history. A company with a deep and varied installation history is more likely to have its modeling and estimation processes refined through experience. Don't be afraid to check their portfolio and past projects.
Conclusion: Due Diligence is Your Best Investment
Verifying a solar savings estimate is not about being confrontational; it's about exercising responsible due diligence on a major financial investment. A transparent and professional solar company will not only welcome your informed questions but will be impressed by them. They want to partner with clients who understand the value of what they are offering.
Use this guide as your checklist. Go through each proposal, ask these tough but fair questions, and demand clarity. By doing so, you move from being a passive recipient of a sales pitch to an active, empowered partner in your energy future. This diligence is the best way to ensure that the exciting numbers on your proposal become a satisfying reality on your monthly bills. Before you sign, make sure you ask these critical financial questions to get the full picture.