While tax incentives benefit power producers, Republic Act No. 9513 or Renewable Energy Act also features market mechanisms designed to benefit everyday business operations. Business owners can leverage these statutory mechanisms to dictate where their power comes from and even become small-scale power producers themselves.
Renewable Portfolio Standards and the Green Energy Option
The law establishes a “Renewable Portfolio Standard” (RPS), a market-based policy requiring electricity suppliers to source an agreed portion of their energy supply from eligible RE resources (Republic Act No. 9513, Section 4 and Section 6). To give end-users operational control, the law created the “Green Energy Option.” This mechanism legally empowers end-users to choose renewable energy to meet their energy requirements (Republic Act No. 9513, Section 4). Upon a determination of technical viability by the DOE, end-users may directly contract their energy requirements from RE facilities, with distribution utilities mandated to provide the physical connection (Republic Act No. 9513, Section 9).
Net-Metering for Distributed Generation
For businesses investing in on-site generation (e.g., solar panels), the law provides for “Net Metering.” This is appropriate for “distributed generation,” defined as a system of small generation entities supplying directly to the grid, where no single entity exceeds one hundred kilowatts (100 kW) in capacity (Republic Act No. 9513, Section 4). Under a net-metering agreement, a distribution grid user has a two-way connection and is charged only for net electricity consumption, receiving credits for any overall contribution to the grid (Republic Act No. 9513, Section 4 and Section 10).
Typical Scenario: A cold-storage warehouse owner spends a premium on daily electricity. They install a 90 kW solar array on their warehouse roof.
Practical Advice for Business Owners: Do not let excess solar power go to waste on weekends when the facility is closed. Legally demand a net-metering agreement from your local distribution utility. The law mandates that subject to technical considerations and without discrimination, distribution utilities shall enter into these agreements with qualified end-users (Republic Act No. 9513, Section 10). This ensures your weekend solar generation effectively subsidizes your weekday power consumption.
20 June 2026
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Nicolas and de Vega Law Offices is a full-service law firm in the Philippines. You may visit us at the 16th Flr., Suite 1607 AIC Burgundy Empire Tower, ADB Ave., Ortigas Center, 1605 Pasig City, Metro Manila, Philippines. You may also call us at +632 84706126, +632 84706130, +632 84016392 or e-mail us at [email protected]. Visit our website https://ndvlaw.com.
