Philippines Poised For Renewable Energy Boom As Capacity Set To Double By 2031

The Philippines is on the cusp of a major energy transition, with renewable power capacity projected to more than double over the next five years. Recent market intelligence indicates the country’s total renewables capacity could rise from 14.45 gigawatts in 2026 to 34.37 gigawatts by 2031—a compound annual growth rate of almost 19%. This rapid expansion underscores a decisive shift away from fossil fuels and toward cleaner, more resilient energy systems.

Policy Tailwinds Are Accelerating the Shift

Government measures are a central driver of this growth. The Renewable Portfolio Standard (RPS) is steadily ratcheting up the share of clean power that utilities must procure, moving from 11% in 2024 to 35% by 2030. Complementing the RPS, a moratorium on new coal-fired power plants aims to reduce dependence on coal, which still accounts for around 60% of the country’s electricity supply. Together, these policies shape a clear pathway for renewables to scale quickly.

Solar and Wind Lead as Costs Fall

Declining technology costs are boosting the competitiveness of solar and wind. Solar module prices, in particular, have fallen to the point where utility-scale solar in regions such as Ilocos Norte can undercut traditional generation. Several landmark projects are advancing, including the 3.5 GW Terra Solar complex and a 600 MW ACEN solar farm in Bataan. Beyond onshore renewables, the Philippines is also exploring offshore wind and ocean energy as long-term options to diversify supply and strengthen the grid.

Corporate Demand Is Powering New Investment

High electricity tariffs have encouraged large consumers—such as data centers and Business Process Outsourcing operations—to lock in cheaper, greener power through corporate power purchase agreements. These contracts help companies meet sustainability goals while providing bankable, long-term revenue streams that support project financing and spur further development across the sector.

Challenges: Grid Constraints and Regulatory Complexity

Despite strong momentum, critical hurdles remain. Grid congestion and delays in transmission upgrades are slowing the integration of new capacity and limiting the flow of power from resource-rich regions to demand centers. Regulatory uncertainty can also hinder project timelines and raise costs. Addressing these constraints will be essential to realizing the country’s renewable targets on schedule.

• Transmission buildout: Accelerate priority projects to relieve congestion and connect new solar and wind zones.
• Market coordination: Improve permitting, interconnection processes, and clarity on ancillary services.
• System flexibility: Invest in storage, grid modernization, and forecasting to manage variable renewables.

Rising Investor Interest and a Competitive Market

Investor appetite is growing, supported by looser foreign ownership restrictions and clear policy signals. Competition is intensifying as established players and new entrants scale up their pipelines. Leading developers and utilities—including Aboitiz Power, ACEN Corporation, and Solar Philippines—are positioning to capture market share as auctions, bilateral deals, and corporate procurement accelerate.

Economic Impact and Outlook

The expansion of renewables is more than an environmental milestone—it is a significant economic opportunity. Increased investment can catalyze job creation, drive industrial activity across supply chains, and enhance energy security by reducing exposure to imported fuels. Over time, a modernized grid paired with abundant clean generation will help stabilize prices and improve reliability for households and businesses.

With robust policy support, targeted infrastructure investments, and growing corporate participation, the Philippines is poised to emerge as a regional leader in renewable energy. If grid upgrades keep pace and regulatory frameworks remain supportive, the country can meet its ambitious targets—delivering a cleaner, more affordable, and more resilient energy future by 2031 and beyond.