SOLAR PHILIPPINES has started operating its Tarlac solar farm, which has contracted its output to Manila Electric Co. (Meralco) at P2.9999 per kilowatt-hour to make it the lowest cost power plant in the country.

“We… will intensify our efforts to bring low-cost solar energy to every Filipino,” Leandro L. Leviste, president of Solar Philippines, said in a statement during the weekend.

The activation of Solar Philippines Tarlac Corp.’s plant comes at a time when the Luzon grid has been experiencing thinning power reserves as some of the power facilities in the area went on unscheduled outages in recent days.

It also follows the granting by the Energy Regulatory Commission (ERC) of a provisional authority for Solar Philippines and Meralco to implement their power supply agreement (PSA) with a clause that raises by 2% annually their agreed power rates.

In an order promulgated on March 4, 2019, the ERC reversed its previous initial ruling that disallowed the annual escalation after Solar Philippines presented evidence proving that even on the 20th year of the PSA, the rate at P4.4577 per kilowatt-hour (kWh) will still be the lowest among the previously approved applications for solar power plants projects.

Mr. Leviste said the Tarlac solar farm has a full capacity of 150 megawatts (MW), allowing it to help address the Luzon grid’s power shortage, which in recent days has ranged from 100 MW to 200 MW.

He said the additional supply means averting rotating blackouts for up to 500,000 households, or more than the entire residential demand of Tarlac.

The Tarlac project uses panels manufactured by Solar Philippines in its factory in Batangas. The factory is developed, constructed, owned, and operated by the Mr. Leviste’s group. It employs more than a thousand workers. — Victor V. Saulon

The original version of this story in the online edition of the newspaper was uploaded with an incorrect photograph, which has been taken down. BusinessWorld regrets the error.