ERC's FIT-All Rate Hike: A Necessary Step or Consumer Burden

by: Roy Jerusalem Cabonegro, Green Normal Media Service (www.facebook.com/green.normal.tv)

On February 19, 2025, the Energy Regulatory Commission (ERC) approved the National Transmission Corporation's (TransCo) application to adjust the Feed-in Tariff Allowance (FIT-All) rate for 2024. The new rate is set at PhP0.1189 per kilowatt-hour (kWh), an increase from the previous PhP0.0838/kWh, and will be reflected in consumers' bills starting March 2025.

The ERC justified this adjustment by citing the depletion of the FIT-All Fund, which compensates renewable energy producers. The fund’s shortfall is attributed to prolonged low prices in the Wholesale Electricity Spot Market (WESM), reducing its capacity to pay the guaranteed rates to renewable energy suppliers. This financial gap necessitated the rate hike to ensure the sustainability of renewable energy payments.

Although some consumer groups have expressed concerns about increased electricity costs, recent research suggests that Filipino households are, in fact, willing to pay more for a cleaner energy mix. A study conducted in Metro Manila found that households are willing to pay up to 19.3% more on their electricity bill for a 20% increase in solar energy. This demonstrates strong public support for renewable energy investments, particularly in solar power. However, other renewable sources such as biomass, wind, and small-scale hydropower had lower willingness-to-pay rates, indicating the need for better awareness and education on these alternatives.

The Makakalikasan Nature Party, which has long advocated for a complete transition to 100% renewable energy, views this FIT-All rate adjustment as a necessary step toward a cleaner energy future. The party supports the development of sustainable mass transportation and green industries and has called for a moratorium on new coal-fired power plants with a phase-out plan for existing ones. While the party has voiced concerns over nuclear energy and waste-to-energy solutions due to environmental and safety risks, it strongly endorses this FIT-All increase as a means of accelerating the country’s renewable energy transition.

The recent approval of the 19.8 MWAC Bongabon Solar Power Project in Nueva Ecija further solidifies the Philippines’ commitment to renewable energy expansion. With the strong public willingness to pay for more solar energy and the necessity of ensuring a financially sustainable renewable energy program, the FIT-All rate hike aligns with both consumer preferences and the long-term environmental goals of the country.
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As the nation moves forward, balancing affordability with sustainability will remain a key challenge. However, with clear public support for renewable energy and policies ensuring the continued funding of these initiatives, the FIT-All rate adjustment appears to be a justifiable and necessary measure in the transition toward a cleaner energy future.