The Iran war is accelerating the transition to clean energy in the Philippines, a nation heavily reliant on imported fossil fuels that recently became the world’s second-biggest spender on solar panels.
The spending has been a particular boon to rooftop solar arrays as demand for panels has soared among residents and businesses amid rising electricity prices and concerns over supply shortfalls.
“[In] the first 100 days since the announcement of an energy crisis, which was March 23 here in the Philippines, there was like a fivefold increase in inquiries for rooftop solar,” said Brenda Valerio, Philippines country director of New Energy Nexus, a nonprofit that supports renewable energy.
The spike in energy prices triggered by the war generated unprecedented interest in solar energy.
“It was something that no other marketing campaign was able to do in the past,” Valerio said. “It’s actually convincing people that now is the time.”
The Philippines is the latest test case of whether countries are accelerating the adoption of clean energy to offset geopolitical instability. The nation of 117 million people still relies heavily on coal for energy and is considering creating a strategic petroleum reserve.
The recent growth in solar comes as the Philippines moves to expand domestic energy supplies and cut electricity costs that have spiked since fighting in the Middle East effectively closed off the Strait of Hormuz, a shipping channel the region relies on for imported oil and gas.
In March, after the U.S. and Israel attacked Iran, Philippine President Ferdinand Marcos Jr. said he would fast-track 1.4 gigawatts of renewable energy that was under development.
Marcos declared an energy emergency and issued an executive order directing agencies to accelerate permitting, clearances and grid connections for priority projects. The order expanded earlier efforts to streamline permitting and green energy auctions, and helped solar, wind and hydropower projects, said Nevi Cahya Winofa, an analyst at Rystad Energy researchers.
The Philippines Department of Energy said it would speed the deployment of 1.4 GW of renewable energy through 22 projects by the end of April. It achieved its goal, largely through a sprawling solar project called Meralco Terra, which added 750 megawatts of energy to the grid in mid-July.
“The need to boost our energy sector has never been more apparent,” Marcos said in a statement last month announcing the project. His government wants half of the country’s power to come from renewables by 2040, up from 25 percent today.
The 1.4 GW of new renewables expands the country’s renewable capacity by nearly 14 percent, substantial growth over a short period. But it only covers between 1 and 2 percent of total power demand, according to Rystad.
BloombergNEF forecast that solar installations as measured by power generated would be more than 400 percent higher in 2026 than in 2025. Although BloombergNEF didn’t attribute the growth to the Iran war, other analysts say there is a connection.
“The conversation for renewables has really changed,” said Winofa of Rystad. “Renewables [are] not only about the climate solution. It’s also part of the energy security and energy independence agenda.”
A rooftop revolution?
The boom is partly driven by the falling price of solar panels — mostly made in China — and battery storage, which have made renewables more economical than fossil fuels. The Philippines has the highest residential electricity prices in Southeast Asia.
“The Philippines shows that the clean energy transition is beginning to take root because the economics are becoming compelling,” Alnie Demoral, a Manila-based energy analyst at energy think tank Ember, said in a statement.
The Philippines has imported more solar panels this year from China — the world’s top supplier — than any country other than the Netherlands, which serves as a transshipment hub, according to Ember.
Ember said in May that rooftop solar capacity in the Philippines might have doubled since early 2025 to 1.3 GW and could continue to grow.
The potential for rooftop solar in the Philippines is large, according to the Institute for Climate and Sustainable Cities. Its solar mapper shows that only 0.5 percent of the country’s rooftops have solar panels.
The Philippines’ growing demand for rooftop solar installations is drawing parallels to Pakistan, which became a solar powerhouse after communities sought relief from soaring electricity prices following Russia’s invasion of Ukraine. Unlike other countries in the region, the Philippines doesn’t subsidize power, and the majority of its energy comes from imported fossil fuels, making it vulnerable to geopolitical shifts.
The comparison with Pakistan is imperfect, said Shantanu Jaiswal, head of India and Southeast Asia research at BloombergNEF. And it’s not at the same scale.
“Solar installations rose in Pakistan due to very high utility power tariffs and yet poor electricity supply,” he said in an email. “Whereas [Southeast Asia] is building renewables to meet its rising power needs in a more sustainable and economical way.”
‘Difficulty catching up’
Challenges remain to increasing renewables. Rising interest rates could stall their rapid build-out, while transmission delays have led some project developers to pursue temporary connections to the grid that could threaten its stability, Hanh Phan, a Southeast Asia analyst at BloombergNEF, said in an email.
Valerio said the Philippines faces bottlenecks to scaling up solar, including a shortage of installers and initial costs that some households can’t afford. Soaring demand has created supply chain problems across a country of more than 7,000 islands.
“Now people want solar,” Valerio added, “but it’s the market that’s having a little bit of difficulty catching up.”
Demand is growing so fast that in some parts of the country, installations are being delayed.
Rooftop solar alone also can’t meet the Philippines rapid demand growth, which requires vast solar farms, said Baldesh Singh, a Southeast Asia renewables analyst at S&P Global Energy.
“Utility-scale projects remain essential to provide the heavy, continuous baseload and grid-level capacity required by the country’s expanding industrial and urban sectors,” Singh wrote in an email.
The growth of solar comes as electricity demand needed to power electric vehicles, air conditioning and data centers soars globally. The International Energy Agency predicts that electricity demand will grow by 3.6 percent annually over the next four years and that renewables will overtake coal this year as the largest source of electricity generation.
The transition will take longer in the Philippines, where coal remains the main power source. Rystad analysts expect renewables to cover all demand growth this year as the country cuts energy consumption but don’t expect the trend to hold over the following years.
Still, Matthias Fripp, director of global policy research at Energy Innovation, said there has been steady progress where renewables plus power storage have begun to beat coal.
“This crisis in Iran puts an extra sharp point on that,” he said. “We’re at the point where we’re going to see more and more countries go that way.”
