Soaring fuel costs from the Iran war are pushing panicked consumers in hard-hit Asia toward rooftop solar power, while China stands to cash in as the world’s largest provider of solar technology. In the Philippines, where a national energy emergency is already underway, a survey of 20 local solar companies found a 70% increase in weekly installations and a six-fold jump in customer inquiries since the conflict began.
Who Gets Hit First
The people absorbing the blow are not the ones making the decisions. In the Philippines, which relies heavily on Middle Eastern crude oil and liquefied natural gas, the closure of the Strait of Hormuz has made it one of the most impacted Southeast Asian nations. Local airlines are weighing fuel rationing. Public transport workers are receiving cash handouts. Gas and diesel prices have shot up. To conserve energy, government offices have shifted to a four-day work week and been told to keep air conditioning no lower than 24 degrees Celsius, or 75 degrees Fahrenheit.
Oil and gas spikes during the first 60 days of the Iran war cost Filipino consumers, businesses and public institutions more than $600 million, the climate nonprofit 350.org estimates. That bill lands where these crises always land: on ordinary people, on workplaces, on public services, on anyone who needs transport, cooling, or electricity to keep life moving.
Brenda Valerio of the nonprofit New Energy Nexus, which ran the survey, said, “This crisis is a driving force for solar,” and, “People want solar and people want solar now.” Customer interest in rooftop solar jumped from around 115 inquiries in February, before the start of the Iran war on Feb. 28, to more than 450 by mid-April, according to the New Energy Nexus survey. Jaime Quemado, who recently bought a rooftop solar system in Manila, said, “When we got our energy bill after the Iran war broke out, we were very shocked. It was wow. It was a significant increase,” and said there were growing concerns about potential power outages, which led him to look for an alternative energy source like “solar, which is very abundant here in the Philippines.”
The New Winners in the Energy Scramble
The war is also creating a windfall for the industrial powers already sitting on the supply chain. China is poised to profit from demand caused by the war. Chinese clean technology equipment exports hit a record high in March, according to energy think tank Ember, and worldwide interest in solar is increasing. Li Shuo, director of the Asia Society Policy Institute’s China Climate Hub, said, “China really is, by far, leading this race,” and called the renewable industry “a one-man show.”
On two blisteringly hot days in Manila, EcoSolutions installers sweated through the set up of an 18-kilowatt rooftop solar system, which included 28 panels from major Chinese manufacturer LONGi and four batteries from Suzhou-based battery group Dyness. Richmond Reyes, EcoSolutions president, said, “The war has helped the solar industry really get its footing.” Joel Remegio of the Association of Solar Installers of the Philippines said the energy crisis is a “game changer” for the nation’s nascent solar industry.
Valerio said solar groups must “ride this wave and take advantage of this momentum.” That line says plenty about how quickly crisis gets translated into market opportunity, even when the original shock is being felt as higher bills and tighter budgets.
Policy, Markets, and the Limits of Choice
Marissa Cerezo of the Department of Energy’s Renewable Energy Management Bureau said clean technology, like rooftop solar, is quickly scalable because it is “accessible to all of us,” and added, “This gives us the power to choose them.” But the choices being offered are still shaped by the same energy system that made the crisis so punishing in the first place.
Solar is being embraced across Southeast Asia. Indonesia set an ambitious target to install 100 gigawatts of rooftop solar by 2034, a leap from its current 1.3 gigawatts. Vietnam wants to install rooftop solar on at least 10% of public offices and homes nationwide by 2030. Thailand is considering new policies to give rooftop solar users a bigger bang for their buck by increasing the amount of surplus energy the national grid can buy. Yu Sun Chin of the research group Zero Carbon Analytics said the energy crisis is incentivizing these decisions. She said, “It totally makes sense for policymakers to take another look at rooftop solar and see ways that they can save costs.”
Online marketplaces and utility companies in the U.S. and across Europe also have recorded jumps in solar sales and inquiries since the Iran war began. Jan Rosenow, a professor of energy and climate policy at Oxford University, said, “Solar is definitely one of the easiest things people can do” to cut monthly electricity bills. He said the availability and affordability of rooftop solar make it the easiest clean technology solution given the higher expense for buying an electric vehicle or installing a heat pump.
Ember noted China exported 68 gigawatts worth of clean technology products in March, equivalent to Spain’s entire solar capacity and double its February output. Ember found the Iran war is accelerating the world’s energy transition. Exports to Africa hit 10 gigawatts, a 176% jump from February, with rapid growth in Nigeria, Kenya and Ethiopia. Exports to other Asian nations doubled to 39 gigawatts, including major increases to India, Malaysia and Laos.
Ramnath Iyer of the U.S.-based Institute for Energy Economics and Financial Analysis said the speed of the transition depends on whether world leaders “decide to go ahead with electrification and move away from fossil fuels.” Li said Chinese companies had an oversupply of solar panels and other equipment before the war, putting them in a prime position to capitalize on current demand. He said, “When it comes to the clean tech sector, China at this point in time is already so far ahead,” and, “The current situation in Iran will help China cement its dominance.”