Sun, Land, and Strategy: What Really Powers the Philippines’ Solar Boom

Manila’s clean-energy goals are ambitious: after raising renewables to 35% by 2030, it plans to double solar and wind capacity so that half of the grid runs on green power by 2040. To meet this, the government has auctioned off 5 GW of PPAs and plans another 12 GW in the next rounds. Big names like Ayala’s ACEN (AC Energy) and Citicore have quietly amassed project pipelines in the thousands of megawatts to chase those auctions. But targets aside, the crunch question for developers is: Where do you put the panels?  In the Philippines’ crowded archipelago, usable land is scarce.

The result: a fierce “land rush.” Investors and developers now pore over satellite maps, hunting for flat, sun-bathed plots adjacent to grid lines. But unlike the sun, land is not free: it’s contested, regulated, and typically owned by farmers or villages. Foreigners may own 100% of the solar project companies under a new DOE circular (2022), but the 1987 Constitution still bars them from owning land outright. This forces any foreign-funded solar firm to lease land or partner with a Filipino majority owner. In practice, this means blending purchases and long leases to control enough territory without breaking the law.

The Terra Solar Megadeal: Where Land Meets Ambition

No project illustrates this more than “Terra Solar,” a 3,500-hectare solar-and-storage complex in Luzon. Led by Meralco/MGen and Solar Philippines (SPNEC) with UK investor Actis, Terra Solar aims to install 3.5 GW of PV and 4.5 GWh of batteries on Luzon’s plains. Actis’s Sept 2024 announcement noted that Terra Solar will cover “circa 3,500 hectares” and power 2.4 million households, under a 20-year, 850 MW supply deal with Meralco. It’s being billed as the world’s largest solar-plus-storage project.

But on the ground, assembling Terra Solar has been a logistical and political minefield. To build 3,500 ha of panels, the team had to:

• Aggregate hundreds of small farms (often tilting at title disputes and tribal land rights).

• Re-zone land from agriculture to industrial energy use, a time-consuming political step.

• Buy some plots outright (usually unhampered land or government parcels) and lease the rest (often on 25-year contracts).

• Navigate foreign-ownership limits by structuring SPNEC as a Philippine corporation (even though DOE now allows 100% foreign RE ownership, any land title must be held by Filipinos).

Why this hybrid buy/lease? It all comes down to ROI and control. Buying land upfront ties up cash but yields land value gains and bank-friendly collateral. Leasing minimizes capex and speeds up construction, but means paying annual rent and no freehold. Industry insiders say the sweet spot is often “buy low, lease peripheral.” As one developer quips, if you wait for the energy auction, “the land’s gone, or ten times more expensive.” (It’s a strategy Citicore and others quietly follow.)

Since solar returns hinge on land cost, analysts crunch the numbers closely. A rough industry model shows that for a 25 MW farm (~30 ha of land):

• CAPEX: ~$650,000–$800,000 per MW (covering panels, inverters, mounting, EPC, permits, etc. Land acquisition costs are typically calculated separately from CAPEX.)

• Revenue: A 20-year PPA yields roughly $120,000–$150,000 per MW per year (at typical 200-250 kWh/kWp yields).

• OPEX: Another ~$10,000–$15,000 per MW per year (maintenance, security, lease payments if any, insurance).

This translates to net profits of ~$100,000–$135,000 per MW per year, and payback in roughly 5–7 years under stable grid conditions. For example, Solar Philippines’ Calatagan project (63 MW) was expected to break even in about eight years, in line with these estimates. In that sense, every dollar spent on land affects the timetable: paying $5,000/ha vs. $15,000/ha can shift payback by a year. So developers run the math: buying land at $3,000–$6,000/ha keeps ROI in double digits. Leases (often ~$500/ha/year) lower upfront costs, but stretch out returns.

Case Study: Calatagan Solar Farm (Batangas)

Long before Terra Solar made headlines, a local team quietly blazed the trail. In 2016 Solar Philippines built the 63.3 MW Calatagan Solar Farm on 160 hectares of former rice land. It was the largest solar facility in the country at the time and the first utility-scale PV project developed entirely by a Filipino firm. Solar Philippines’ founder Leandro Leviste led the charge – a 22-year-old entrepreneur who convinced banks to back solar in rural Batangas. Pushing start-up solar power, he charged the project cost (~$120M) to lenders: Philippine Business Bank and BDO provided the bulk of financing, with China Bank and Bank of Commerce joining in.

What made Calatagan special? The team locked in land early – acquiring all 160 hectares before prices spiked – and then tapped local workers and banks. In construction, they hired over 2,500 local laborers from Batangas communities, offering jobs and goodwill. The plant was erected in a record two months and began feeding the grid ahead of schedule. With debt service and operating costs covered by long-term power contracts, analysts expected ≈8 years to recover investment. Even now, Calatagan’s story is told as a win-win: transforming “unproductive” land into clean energy while employing locals. Crucially, because Solar Philippines bought (not leased) the land outright, future gains in land value remain theirs – a nugget of upside others gave away.

Case Study: J&V Energy in General Santos (Mindanao)

Taiwan’s J&V Energy offers a contrasting tale of patience. In late 2024 the firm announced it had acquired a 180 MW project in General Santos City on Mindanao. Unlike quick urban sites, this was farm land, spread out over hills: the company spent over two years consolidating 170 hectares of titled farms from more than 50 owners. The painstaking process paid off. With titles in hand, J&V secured a solar service contract (SEOC) from DOE and plans to enter the upcoming Green Energy Auction to lock in a 20-year PPA. By owning the land, J&V can more easily clear environmental studies and grid permits — prerequisites for a reliable bankable project.

This patience matters: owning the land allowed them to present bankable collateral and secure key permits ahead of time — turning land acquisition into the linchpin of the financing strategy. In short, J&V treated land-buying as the foundation of the entire business plan, letting them tender with certainty while rivals scramble for parcels. Once built (expected by 2027), the 180 MW plant will export ~295 GWh/year — enough to meet Pangasinan's electricity demand — at stable fixed prices. For J&V, years of land deals enabled a locked-in payoff later.

The Bigger Picture: Land as Gatekeeper

This terrain matters because land in the Philippines carries layers of meaning. Farmland is often ancestral, and farmers may resist selling to outsiders — especially large swaths, fearing displacement. Titles themselves can be murky: decades-old boundaries, co-ownership quirks, or contested ownership require legal cleanup. Converting agricultural land to industrial (as many solar farms do) triggers public hearings and political friction. No surprise then that, as Solar Philippines’ Leviste observes, “land acquisition is one of the greatest challenges” for solar in an agricultural archipelago.

Foreign players face another wrinkle: under the Constitution, only Filipino citizens or a 60%-Filipino corporation can hold land titles. (Even though recent DOE rules allow 100% foreign equity in solar projects, any land title must belong to a Filipino entity.) This means foreign-invested developers form joint ventures or use long-term leases to secure land rights legally.

All this has made real estate the true gatekeeper of the solar transition. In some zones, the mere act of buying up fields — sometimes years before a project is guaranteed — has driven up local land prices. It’s a controversial “land banking” strategy: critics say it outbids smallholders and skews markets, while proponents argue it’s the only way to secure sites when power auctions arrive. (A recent BoosterCon comment from a landowner ally: “We feel like the peasants are getting squeezed out,” lamented one activist, reflecting local unrest.)

Land Banking: Risky or Visionary?

Some industry veterans unapologetically tout land banking. A Citicore REIT official was frank in local media: by the time the DOE holds an auction, “the land’s gone”, so companies must own it beforehand. ACEN and SolarPhil have indeed snapped up thousands of hectares years in advance. To critics, this looks speculative and unfair; to strategists, it’s visionary. The truth likely lies in between. Yes, early buyers bear carrying costs and risk. But when an auction hits or grid lines open up, being first off the blocks can mean the difference between a greenlight and a doodle on a map.

Land banking also intersects with climate change. Some argue putting solar on idle land is a win-win, but others worry it sidelines agriculture. There’s even talk of “agri-solar” hybrids (growing mushrooms or turmeric under panels) to placate farmers. In the end, every extra solar MW requires real estate — and the most agile developers are treating land almost like another utility.

The People Behind the Panels

The names driving this shift are as telling as the machinery. At the top, Manny V. Pangilinan (Meralco/MGEN) has put the country’s largest utility in the renewables game, even breaking ground for Terra Solar alongside President Marcos in late 2024. Pangilinan himself calls Terra Solar “one of the most ambitious renewables projects the world has ever seen”, and he’s already plugged it into Meralco’s 35% mandate.

Then there’s Leandro Leviste, the 20-something founder of Solar Philippines, who pushed Calatagan and multiple Luzon and Mindanao projects forward — often by shouldering risk that bigger groups avoided. Leviste has openly compared himself to Silicon Valley’s solar evangelists, saying “we are in a unique position to realize the potential” of solar in the Philippines.

Other heavyweights include ACEN (AC Energy), the Ayala conglomerate’s green arm, which quietly owns over a thousand MW of Philippine renewable projects (spanning solar, wind, and now storage) and is set to bid aggressively in each auction. Citicore (unit of Philippine Prime Infrastructure) is another scrappy player — its newly minted REIT means the firm now earns by leasing land to solar operators, so it too constantly scouts land deals.

These are not run-of-the-mill developers. They think like real estate moguls and energy traders in equal measure. The solar gold rush has drawn investors who see beyond volts and watts: they are weaving local politics, community relations, and land value into their power portfolios.

The Final Analysis: Shine Is Not Enough

Yes, the Philippines is blessed with tropical sun. But the success of solar here won’t be decided by weather or modules — it will be decided by how well projects solve the land puzzle. The sun still shines free, but every hectare of productive land under panels needs to be won in a market of competing claims. In practice, the financial model — not the sunlight — often determines project success. As Solar Philippines’ Leviste put it, ultimately “the business model remains the same… whether on land or rooftop”, but the scale and land costs make all the difference.

In other words, the battle for Philippine renewables is solar panels in the sky, and real estate battles on the ground. Winning that contest will determine who lights up the grid — and who lights up profits.