ASIATODAY.ID, JAKARTA – Integrating batteries enhances reliability and increases project profitability – measured by the internal rates of returns (IRRs) – for solar projects by 1.2–9 percentage points (pp) across Viet Nam, the Philippines and Indonesia, according to Ember’s new analysis.
The analysis finds that Indonesia offers the strongest price signal based on PPA (Power Purchase Agreement) ceiling prices for storage, with solar project IRRs going up to 23% after including storage, from 11-16% without storage.
Rising PPA prices for storage-integrated projects signal a maturing market that values reliability and long-term stability over short-term price competition.
Overall, the analysis finds that project profitability for solar projects in the three ASEAN countries is extremely sensitive to PPA tariffs and capital costs. This reflects the importance of having mature renewable energy markets for both reducing costs and improving IRRs.
Using a system advisor model, the analysis finds that when PPA rates rise by just 10 pp, solar projects’ IRR can rise between 33-45 pp. Similarly, a 10 pp drop in capital costs can send solar projects’ IRR surging by 18-41 pp.
The findings highlight that the three nations can unlock private and public capital investments in clean energy by focusing on integrating storage, improving PPA tariffs and lowering capital costs. The countries can do so by cementing stable, predictable policies around tariffs, risk allocation and auction design, while also fast-tracking project approvals and easing bottlenecks that inflate capital costs.
Hedging risks in renewable energy projects helps stabilise prices and boosts investment appeal for long-term sustainability.
For example, the Philippines’ indexation of Green Energy Tariff for GEA projects marks a positive shift by giving IPPs avenues to include the forward price of renewable energy production. This way, the idiosyncratic asset risk of projects is separated from the value of generated power.
“Southeast Asia is firing on all cylinders to build an integrated, competitive, and resilient region — and energy is at the heart of this transformation. Accelerating clean energy deployment will require stronger regional governance, harmonised planning, and coordinated resilience strategies,” said Dr Dinita Setyawati, Senior Energy Analyst and lead author of the report on December 2, 2025.
“Bold reforms are essential to place renewables at the forefront of the region’s energy security.”
The report finds that policy reforms are already boosting investor confidence. Viet Nam’s Direct Power Purchase Agreement (DPPA) could double the share of renewables from 19 to 42% by allowing factories to buy clean electricity directly.
The Philippines has opened its renewable sector to 100% foreign ownership, spurring a new wave of solar-plus-battery projects.
Further, Indonesia’s Ministry of Energy and Mineral Resources introduced currency risk-sharing and recognises carbon-credit rights for renewable developers, a decisive step toward a fully home-grown, clean-energy system.
“Indonesia continues to push for a clean energy transition by optimising all available natural resources. The energy sector holds great potential for job creation, thus, efforts to enhance renewable energy use also focus, in addition to on-grid electricity, on captive sectors, developing storage systems, biofuel, energy efficiency and clean energy investment,” said Dr Dadan Kusdiana, Secretary General of Indonesia’s Ministry of Energy and Mineral Resources.
The report emphasises that stronger grid planning, faster permitting, and blended-finance mechanisms are critical to sustain the momentum in driving investments in renewable energy in the region.
“Southeast Asia has no shortage of renewable ambition, but lacks systems that work,” said Atem S. Ramsundersingh, CEO of WEnergy Global.
“A multi-trillion-dollar opportunity is stalled by circular bureaucracy, outdated permitting, and neglected grid infrastructure. With smart governance reforms and decisive execution, megawatt targets will mean something, energy security will be achieved, and foreign investment will flow into the region.”
(AT Network)