Solar project economics in three countries

The analysis of 10 MW solar projects in Viet Nam, the Philippines, and Indonesia reveals that PPA pricing and capital expenditures are the primary determinants of profitability. While project returns vary by country, integrating batteries can significantly boost the Internal Rate of Return (IRR), particularly in Indonesia and Viet Nam. The report highlights that a 10 percentage point change in PPA prices or capital costs can shift IRRs by up to 45 percentage points. Beyond technical economics, the document identifies policy bottlenecks—such as curtailment in Viet Nam and permitting delays in Indonesia and the Philippines—as critical risks to investment, while noting recent regulatory efforts like the Philippines' EVOSS and Indonesia's Presidential Regulation 112 to improve bankability.

• PPA pricing and capital expenditures are the most significant factors influencing solar project profitability. A 10 percentage point change in new PPA prices can alter the Internal Rate of Return (IRR) by 33–45 percentage points, while a 10 percentage point difference in capital costs can cause an 18%–41 percentage point change in IRR.
• Integrating batteries can enhance project returns, with the most significant impact seen in Indonesia and Viet Nam. In Indonesia, battery integration can raise the IRR to 23%, and in Viet Nam to 7.3%, whereas returns in the Philippines remain the same.
• PPA ceiling prices for solar projects vary by location, ranging from $0.053/kWh in North Viet Nam to $0.09/kWh in Sumatra (with a reduced rate of $0.049/kWh from years 11–20), and $0.076/kWh in the Philippines.
• Capital costs for 10 MW solar projects range between $4.3 million and $6.4 million, with battery integration adding between $0.7 million and over $2 million to these costs.
• Viet Nam's solar projects face specific economic hurdles; to achieve a 10% IRR, capital costs for solar projects would need to drop from $5.5 million to $4.4 million, and for solar plus battery projects from $6.1 million to $5.1 million.
• Administrative and policy bottlenecks negatively impact project returns. In Indonesia and the Philippines, overlapping land rights and local approvals can extend timelines by over a year, reducing IRR by 0.6% per month of postponement. In Viet Nam, solar curtailment reached up to 40% in 2022, reducing developer revenues by the same amount.
• The Philippines has implemented the Energy Virtual One-Stop Shop (EVOSS) and Green Lane Certification to reduce bureaucratic delays. As of December 2024, 176 projects have green lane access, including 141 solar, hydropower, wind, geothermal, and biomass projects valued at over $70 billion.

APA

Ember (2025). Solar project economics in three countries. https://ember-energy.org/chapter/solar-project-economics-in-three-countries/

Chicago

Ember. Solar project economics in three countries. 2025. https://ember-energy.org/chapter/solar-project-economics-in-three-countries/.

Wikipedia

{{cite report |author=Ember |title=Solar project economics in three countries |date=2 December 2025 |url=https://ember-energy.org/chapter/solar-project-economics-in-three-countries/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ember2025solar, author = {{Ember}}, title = {{Solar project economics in three countries}}, institution = {Ember}, year = {2025}, month = dec, url = {https://ember-energy.org/chapter/solar-project-economics-in-three-countries/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }