Jakarta, 2 December – 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.
