Solar energy is one of the fastest growing sectors for startups in the Philippines. (Photo: iStock)
The Philippines is witnessing a surge in companies focused on promoting sustainable development, especially in the clean energy sector, where the number of startups has quintupled over the past four years. Most of these startups are concentrated in solar, small hydro, and wind technologies. However, challenges such as small scale and difficulties in fundraising are seen as major obstacles to their development.
Clean energy startups focus on wind, solar, and hydro
A report by the U.S.-based nonprofit organization New Energy Nexus highlights a dramatic increase in clean energy and climate-related startups in the Philippines, growing from 15 to 91 in four years. Nearly half of these startups (49%) belong to the renewable energy generation sector, while others focus on sustainable transportation or smart mobility (8%), energy access (8%), and waste management (7%).
Regarding critical funding sources for startups, 87% of the capital comes from government grants and competition prizes, followed by loans, angel investments, and crowdfunding. The report indicates that since 2020, 18 startups have collectively raised nearly $1.3 million.
Brenda Valerio, country director for New Energy Nexus Philippines, told Singaporean sustainable media outlet Eco-Business that supply gaps caused by large companies considering distance and insufficient economic feasibility are being filled by solutions provided by these startups.
Startups like Shifttech Marine, which designs solar panels specifically for fishermen, and Hive Energy PH, which offers solar backup power, do not set minimum order requirements, meaning they are willing to accept orders as small as one unit.
Challenges in scaling up for startups
The report attributes the significant increase in energy startups in the Philippines to various regulations and policies implemented by the government to support renewable energy and entrepreneurship. In addition to the Microgrid Systems Act and the Electric Vehicle Industry Development Act enacted in 2022, related legal frameworks for research and regulatory bodies have also been established.
Despite the presence of successful cases, these startups still struggle to scale up. The report analyzes that part of the reason is the difficulty in finding venues for large-scale testing. Unlike India and Singapore, the Philippines lacks comprehensive startup incubation centers that connect public and private sector resources, resulting in many startups facing a lack of private investment and the inability to expand operations.
Valerio warns that although there has been noticeable progress in the clean energy startup ecosystem in the Philippines, the lack of connections, funding, testing facilities, and skills training poses a risk of stagnation in development.
Source: New Energy Nexus、Eco-business
