KICK STARTING THE PHILIPPINE RESIDENTIAL ROOFTOP MARKET. by: Mike de Guzman CEO, SolaricCorp.

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1 KICK STARTING THE PHILIPPINE RESIDENTIAL ROOFTOP MARKET by: Mike de Guzman CEO, SolaricCorp.

2 The Philippine Market High power rates at P12/kWh (~US $0.26/kWh) Fragmented-7,107 islands, reliance on diesel peaking plants Severe energy shortage on the horizon Frequent power outages due to shortage. Mindanaodavao-CDO and even metro manila had some rotating outages in 2014 and prediction is dire in 2015 with the shutdown of Malampayaplant. Large popluationbase in remote unelectrifiedareas. Common to find entire towns with only 12 hours a day coverage. Heavy reliance on Diesel plants.

3 The Power Shortage According to Department of Energy s (DOE) forecast, the worst of the rolling power outages will hit the country second week April of 2015 when power supply deficiency is seen at 285 megawatts This will most likely result in rotating power outages of up to 2 hours. Severe brownouts will also be felt in March, April, and May The DOE said it is extremely problematic sourcing out the system s need for contingency reserve placed at about 647MW for the Luzon grid.

4 Distribution Utilities MERALCO is the Philippines largest distributor of power, powering 5.1M customers. It accounts for 75% of Luzon and 55% of the entire Philippines energy sales.

5 Why small scale rooftop? It displaces the highest power rates at ~P12/kWh (~US $0.26/kWh) RESIDENTIAL COMMERCIAL INDUSTRIAL P12.48/kWh P 11.04/kWh P8.78/kWh Regulatory frameworks and Utility interconnection policies are becoming more defined. Payback of Solar installations is about 5 years for residential customers, if built below daytime baseload Low labor costs Economics now back up grid tie solar, next is implementation and education.

6 Philippine homes with solar SOLARIC is leading the trend in rooftop PV in the Philippines. SOLARIC has the most number of rooftop installations and the most number of approved net metering installations in the country. We ve installed 1MW in the past year and doubling capacity every quarter

7 Philippine SMEs with solar Solaricdoes 3 to 4 rooftop installations per week in Metro Manila, and another 3 to 4 per week in other provinces, ranging from 500Wp to 15kWp Solarichas a dealer network, a sales training program, and an installer training program

8 Permitting & Net Metering Submit Net Metering application form to Distribution Utility (DU) Submit Electrical Permit & certificate application to City hall Wait for contract, permit/certification, and finally, installation of the net meter The whole process takes 3 months to 6 months, depending on the area having jurisdiction, and multiple visits to the DU office and various city hall offices. Other DUsdon t have a Net Metering application form yet, we have to provide one. In these instances, it could take up to 10 months or more.

9 Net meters installed 90 Days from application to code retrofit, to approval and net meter installation. Total cost: P14,000 (USD $311) 78 Days from application to code retrofit, to approval and net meter installation. Total cost: P10,000 (USD $222)

10 Permitting Costs Net Metering Distribution Impact Study : P5,500 or P19,500 depends on the DU. ERC charges P1,500 (collected by the DU) City Halls charge anywhere from P1,500 to P11,000+ Best case scenario total: P8,500 (US $188) Worst case scenario total: P42,000+ (US $933) Total Average Cost: P12,000 (US $266) *costs do not include time / manpower

11 Philippine s first POP-NET (Peak Off Peak with Net Metering) Installation

12 Other Costs Most homes older than 3 years or so do not have a service disconnect and will also be required to change their meter base to have a Net Meter installed. This will cost the homeowner roughly P8,000 to P20,000+ depending on size of main line. (US $ 177 to $444+)

13 Inspections DU and City Hall inspection of customer facilities include: service disconnect, grounding, certification of equipment, verification of anti-islanding and reclosing times, etc. Must pass all requirements prior to the installation of actual Net Meter.

14 No Net Metering? Without net metering, its highly likely the unidirectional meter will count any export as consumption customer s bill will go up. No requirements on the DU end, but the local building department / City Hall requires an electrical permit.

15 Supply Chain Economics Expensive logistics channel to get goods through to Manila. Red tape, brokerage fees, VAT, port delays and congestion. Solar Modules are DUTY FREE, but must still pay VAT. All other items (rails, inverters, etc have a duty and a VAT) It costs almost the same amount of money to get a container from Shanghai to Manila, vsa truck from Manila port to an address within Manila. It takes 3-5 days from Guangzhou to Manila, but 10 to 14 days to unload the boat due to port congestion

16 The Market Clients demand local presence for after sales service and warranty -looking for dependable outfits at reasonable rates Clients are looking for hybrid grid-tie and off-grid solutions due to the looming power crisis.

17 Hybrid OffGrid San Jose Nat l High School, Tacloban 10kVa, 3kW with 48V/400Ah battery bank enough to power 2hp aircon and 20+ computers

18 The Market Financing or loans to middle class consumers will open the floodgates to mass adaptation. If we can prove that monthly payments are less than savings created by solar it will be a win-win proposition. PPA agreements to large institutional users, and also light commercial kWp and 100kWp to 2 MW, heavy industrial users. 15 year PPA

19 The Market The Philippine market is vast and the need for cost effective renewable energy is universal.

20 Technology Transfer SOLARIC provides training on the basics of PV, as well as PV installer training for it s nationwide network of installers and dealers.

21 Typhoon HaiyanRelief Efforts

22 SOLARIC has put power in schools, geothermal power plants, hospitals, churches, town centers, clinics, police stations