This as the Department of Energy (DoE) said it will launch the National Renewable Energy Program (NREP) -- which seeks to maximize the renewable energy potential of the country -- on June 14.

The NREP will outline the renewable energy targets and directions in the country’s energy and power mix for the short and long term. The NREP will also establish a framework for existing and planned policies for the promotion of renewable energy.

The government is tasked to provide policy directions for renewable energy under the Renewable Energy Act of 2008. Some of these policies include the establishment of feed-in tariff rates and renewable energy portfolio standards.

Feed-in tariff guarantees payment to renewable energy investors through a universal charge. The renewable energy portfolio standards require distribution utilities to source a certain percentage of the power they distribute from renewable energy sources.

"They should revise it from 100 megawatts (MW) to 20 MW and distribute the remaining 80 MW to cheaper renewable energy like mini-hydro and biomass," Senator Sergio D. Osmeña III told BusinessWorld in a telephone interview.

He proposed that the remaining 80 MW solar energy allocation be split between biomass energy, which would augment the income of farmers, and mini-hydros, which could be harnessed for small irrigation projects.

Under the Renewable Energy Act, the government has set installation limits on renewable energy in order to prevent "grid shock," when electricity from these sources come on line.

The total installation target recommended is 830 megawatts (MW), consisting of: 100 MW for solar energy, 250 MW each for hydroelectricity and biomass, 220 MW for wind power, and 10 MW for ocean energy.

The NREB has already submitted FIT rates for the approval by the Energy Regulatory Commission (ERC). The proposed rates are: P7 per kilowatt-hour (kWh) for biomass, P6.15/kWh for run-of-river hydroelectricity, P10.37/kWh for wind power, P17.65/kWh for ocean energy and P17.95/kWh for solar energy.

"The Renewable Energy does not mandate the allocation of the 100 MW to solar energy," Mr. Osmeña said in a press statement on Friday.

"In the first three years alone, the additional costs to subsidize solar energy would be around P1.7 billion. Solar energy, if introduced in haste, will unnecessarily burden the consumer," he added.

The Senator pointed out energy experts who indicate that the cost of solar panels could drop by 50% within five years. "That would be the proper time to consider using solar energy; a P9/kWh rate for 20 years would certainly be more tolerable."

Sought for comment, National Renewable Energy Board Chairman Pedro H. Maniego told BusinessWorld in a text message: "the installation targets are not yet final. We are still waiting for DoE (Department of Energy) certification based on NGCP (National Grid Corporation of the Philippines) grid integration study. Thus, NREB could still revise installation targets.

"As to the proposal of Senator Osmena, NREB could deliberate on this together with the final recommendations of DoE and NGCP." -- Camille Erika R. Sarte and Emilia Narni J. David