And Their Corrosive Impact on the State
Renewable energy has been presented to Filipinos quite rightly as a response to several urgent and overlapping challenges: rising electricity prices, dependence on imported fuel, vulnerability to climate-related disasters, and persistent poverty. Solar and wind power, in particular, are framed as technologies that could democratise energy, create jobs, and strengthen national resilience.
These promises carry particular weight when viewed through the lens of climate justice—the expectation that climate action should reduce, rather than reproduce, existing inequalities, and that those least responsible for climate change should not bear the heaviest costs of response. A just energy transition follows from this logic. It is not only about shifting from fossil fuels to renewables, but about how that shift is financed, governed, and distributed: who benefits, who carries risk, and whether cleaner energy actually translates into affordable power and reduced vulnerability for ordinary households and communities.
It is in this context that the decision of the Department of Energy (DOE) in January 2026 to cancel a massive number of renewable energy service contracts—and to pursue roughly ₱24 billion in penalties and contractual obligations linked largely to one group of solar companies—takes on significance far beyond the energy sector.
This is not simply a story about a company that failed to deliver. It is a case study in how weaknesses in governance, oversight, and accountability can quietly drain public resources, weaken institutions, and undermine confidence in the country’s ability to manage highly technical infrastructure—whether in renewable energy, flood control, or other critical public systems such as water supply and national telecommunications. When this happens, it is the poorest and most vulnerable—those already facing climate shocks and high energy costs and those who are least able to cope—who ultimately bear the burden. In this sense, infrastructure failure becomes a climate justice issue.
A brief background and timeline
The rise of Solar Philippines
Founded in 2013, Solar Philippines rose rapidly during a period of strong policy support for renewable energy. It became one of the most visible developers of large-scale solar projects and positioned itself as a flagship of the country’s clean energy ambitions.
The grant of a national franchise (2019)
In 2019, Congress granted Solar Para sa Bayan Corporation a national franchise to develop and operate a distributed power system across the country. Such franchises are not routine. They confer extraordinary rights over critical infrastructure and are typically justified by demonstrated technical capacity, financial strength, and the ability to deliver power at scale in the public interest.
From the standpoint of a just energy transition, the granting of such a franchise represents a social contract: public authority and market privilege are extended on the expectation that real, timely benefits will accrue to consumers and communities. Questions were raised at the time—quietly but persistently—about whether a relatively young company had the institutional depth to meet such a critical need and high expectations. Those questions have become more pressing in hindsight.
Accumulation of service contracts and restructuring (2020–2023)
Between 2020 and 2023, Solar Philippines-linked entities accumulated a very large number of renewable energy service contracts under DOE programs, including the Green Energy Auction Program. These contracts granted exclusive rights to develop thousands of megawatts of capacity within defined timelines, backed by performance bonds and other contractual obligations.
During this period, assets were reorganised through listed vehicles such as SP New Energy Corporation (SPNEC), enabling capital entry and exit. Strategic investors—including ACEN Corporation and later Meralco-linked entities—acquired stakes through disclosed transactions. These developments are relevant not because these investors are accused of wrongdoing, but because they illustrate a deeper structural issue: climate-related finance and investment can move even when physical delivery and public benefit lag behind. When this happens, the promise of equitable climate financing—finance that is meant to deliver real social, developmental, and environmental outcomes—begins to erode.
Cancellations and enforcement (2024–2025; announced January 2026)
In 2024 and 2025, the DOE cancelled or accepted the relinquishment of nearly 17,900 megawatts of renewable energy service contracts nationwide. More than 11,000 megawatts—over 60 percent—were linked to Solar Philippines entities.
In January 2026, the DOE publicly announced that it was pursuing approximately ₱24 billion in penalties and contractual obligations related to these cancellations and that the matter had been referred to government legal offices for further action. Around the same time, the Office of the Ombudsman confirmed that it was examining alleged franchise-related violations involving a Solar Philippines firm.
Responsibility, finance, and public interest
Understanding this issue requires clarity about who is involved and in what capacity, because much of the public confusion stems from the overlapping—but not identical—roles of companies, regulators, investors, and political institutions. What follows is not a list of accusations, but a mapping of relationships in a complex governance and financing ecosystem.
Solar Philippines
Solar Philippines is a private renewable energy developer founded in 2013. It rose rapidly during a period of strong policy support for utility-scale solar and accumulated a large number of renewable energy service contracts issued by the Department of Energy (DOE). These contracts granted exclusive rights to develop solar projects within specific timelines, subject to performance requirements.
Solar Philippines did not require a congressional franchise to hold these contracts; its authority flowed primarily from executive-branch regulation. Over time, however, the sheer scale of contracts held by Solar Philippines–linked entities made the company central to national renewable energy planning, amplifying the public consequences of any failure to deliver.
Solar Para sa Bayan Corporation
Solar Para sa Bayan Corporation (SPBC) is a distinct corporate entity but is historically and strategically linked to Solar Philippines. Its defining feature is the national franchise granted by Congress in 2019, allowing it to develop and operate a distributed power system and sell electricity directly to end-users.
This franchise conferred public-utility–like privileges that go beyond ordinary project development. While SPBC and Solar Philippines are legally separate, they have long been understood—by policymakers, regulators, and the public—as part of the same corporate ecosystem pursuing complementary regulatory pathways: one through DOE service contracts, the other through congressional authority.
Leandro Leviste
Leandro Leviste is central to this story not because of personal allegations, but because of overlapping institutional roles. He is the founder and original public face of Solar Philippines and was closely associated with Solar Para sa Bayan at the time its franchise was granted. He is now a sitting member of the House of Representatives.
While franchises are granted to corporations rather than individuals, his leadership role and public association mean that questions about performance, delivery, and accountability inevitably reflect on him—particularly in a political economy where corporate identity and personal leadership are often closely intertwined. This overlap heightens the importance of transparency and institutional safeguards, even in the absence of any finding of wrongdoing.
SP New Energy Corporation
SP New Energy Corporation (SPNEC) emerged as a listed vehicle linked to Solar Philippines’ renewable energy assets. Through SPNEC, solar projects were aggregated, restructured, and opened to public investment. SPNEC later underwent ownership changes and has stated in official disclosures that it is not liable for penalties associated with Solar Philippines’ cancelled service contracts.
SPNEC’s role illustrates how financial instruments and listed entities can continue to function even as underlying project delivery encounters serious difficulty—a key issue in discussions of equitable climate financing and risk allocation.
ACEN (Ayala Group)
ACEN (Ayala Group), the renewable energy subsidiary of the Ayala Group, entered the picture as a strategic investor through disclosed transactions involving SPNEC. ACEN is not the subject of DOE penalty actions and is widely regarded as a technically capable and reputable renewable energy player.
Its involvement matters analytically because it demonstrates how large, credible capital can enter a project ecosystem after key public rights have already been allocated. This does not imply fault, but it complicates public understanding of responsibility and underscores the need for clear rules on how climate-related investments intersect with pre-existing regulatory obligations.
Meralco and Metro Pacific Investments
Meralco, the country’s largest power distribution utility, and Metro Pacific Investments Corporation (MPIC), a major infrastructure conglomerate, became relevant through later-stage corporate transactions and strategic positioning in the energy sector. Their involvement—directly or through affiliates—reinforced the perception that Solar Philippines–linked assets were being absorbed into the orbit of established power and infrastructure players.
Again, this does not suggest impropriety. But it highlights a structural issue: public-facing risks and obligations often remain with original developers or the state, while assets and opportunities can migrate toward larger, better-capitalised actors. For ordinary citizens, this dynamic contributes to confusion about who is accountable when projects fail.
Regulators, oversight bodies, and the public
The DOE is responsible for issuing, monitoring, and enforcing renewable energy service contracts. The Office of the Ombudsman examines potential administrative or legal issues involving public authority and public interest. Congress grants franchises and exercises oversight over the energy sector.
Finally, the public—especially electricity consumers and climate-vulnerable communities—bears the downstream consequences of failure: delayed power supply, lost public revenues, weakened state capacity, and diminished trust.
What went wrong?
At its core, the problem is not complicated: power plants were promised but not built, at a scale large enough to disrupt national energy planning.
Service contracts are instruments through which the state allocates scarce development space and signals future supply. When a single group of companies holds a disproportionate share of those contracts and fails to deliver, the consequences extend well beyond that group.
Auction slots are locked up for years. Other capable developers—including smaller and more locally embedded actors—are crowded out. Energy supply projections must be revised. Consumers remain exposed to volatile prices and supply constraints.
From the standpoint of transformative adaptation, this represents a missed opportunity. Transformative adaptation requires more than incremental change; it involves reshaping systems and institutions so societies can cope with escalating climate risks in durable and inclusive ways. In the energy sector, this means diversifying actors, decentralising solutions, strengthening public learning institutions, and reducing systemic vulnerability. Large-scale non-delivery does the opposite: it reinforces concentration, fragility, and dependence on a narrow set of actors.
DOE officials have stated publicly that many projects failed to meet development milestones and did not adequately respond to notices issued by the department. Whatever the immediate causes—land access, financing constraints, technical limits, or over-extension—the outcome is the same: the public absorbs the cost.
Climate financing as a governance test
Climate finance is often discussed in terms of scale—how many billions are needed to fund energy transition and climate adaptation. But scale alone is not the core challenge. Governance is.
In principle, climate financing is meant to correct market failures, share risk, and enable transitions that would not otherwise occur—especially in countries facing fiscal constraints and high climate exposure. It is meant to support a just energy transition by lowering costs, broadening participation, and ensuring that climate action delivers tangible benefits to vulnerable groups.
What this case reveals, however, is how easily climate-related finance can become detached from those goals.
The accumulation of large renewable energy service contracts, followed by financial restructuring and capital transactions, created pathways for finance to move even as physical projects stalled. This does not automatically imply illegality. But it does point to a serious misalignment: finance responding to paper commitments rather than delivered infrastructure and public outcomes.
From the perspective of climate justice, this misalignment is deeply problematic. When climate finance rewards scale without delivery, it concentrates opportunity while socialising risk. Communities are left without power. Local governments lose expected revenues. The state loses fiscal and institutional space to invest in adaptation where it is most urgently needed.
Equitable climate financing cannot function under these conditions. It depends on strong public institutions capable of pacing investment, enforcing obligations, and ensuring that climate finance supports transformation rather than speculation.
The visible cost
The DOE’s estimate of roughly ₱24 billion reflects penalties, performance bonds, and contractual obligations associated with cancelled contracts. Whether this amount will be fully recovered remains uncertain and subject to legal processes.
But focusing only on this figure obscures a much larger cost—especially for a country seeking sustained access to climate finance for both mitigation and adaptation.
The even bigger hidden costs
The most serious damage caused by large-scale infrastructure failure is rarely captured in a single number.
Renewable energy projects that are not built do not pay local taxes, land rentals, or fees. They do not generate employment or secondary economic activity. For many local governments—particularly outside major urban centres—these revenues could have supported health services, disaster preparedness, and climate adaptation measures. Their absence deepens existing inequalities.
Renewable energy development requires sophisticated public systems: auction design, grid studies, contract management, and regulatory enforcement. When hundreds of projects collapse or stall, years of public investment in planning and oversight are effectively written off. Officials are diverted from learning and system improvement to managing disputes, litigation, and clean-up.
Following major failures, governments tighten rules. While necessary, this also raises transaction costs and slows future project development. More importantly, repeated failures undermine confidence among international climate funds, development partners, and responsible investors. The country’s credibility as a destination for equitable climate financing is weakened, just when long-term support is most needed.
Perhaps most damaging is the loss of trust. Investors become cautious. Financing costs rise. Citizens grow sceptical of government promises. This erosion of confidence weakens the social contract that underpins any credible just energy transition.
And a wider pattern
The renewable energy cancellations echo a broader and longer-running pattern visible in the country’s flood-control sector.
Over many years, tens of billions of pesos allocated for flood-control projects have been lost to substandard work, incomplete projects, or infrastructure that exists only on paper. These failures disproportionately affect poor and climate-exposed communities, turning what should be climate adaptation investments into sources of injustice and harm.
The connection between renewable energy and flood control is not technology—it is governance. In both cases, large sums of public money and climate-related financing were committed to technically complex infrastructure. In both cases, oversight proved insufficient to prevent large-scale non-delivery. And in both cases, the consequences extended far beyond individual projects: weakened institutions, drained budgets, and eroded public trust.
Of compounding effect
These failures do not occur in isolation. Flood vulnerability disrupts power systems. Weak energy systems slow economic recovery after disasters. Fiscal losses limit investment in both prevention and resilience.
In this way, infrastructure failures reinforce one another and amplify national vulnerability. They undermine the very conditions required for transformative adaptation—long-term planning, institutional learning, and inclusive decision-making.
A climate justice and development issue
Whether courts ultimately confirm wrongdoing in specific cases is important—but accountability matters even before legal outcomes are final.
Franchises, service contracts, and licenses are not private favours. They are instruments through which society entrusts private actors with public responsibilities tied to climate action and development. When those instruments can be accumulated, traded, and abandoned without proportionate consequence, the result is fragility, not progress.
From a climate justice perspective, weak accountability shifts the costs of failure onto those least able to bear them. From a development perspective, it corrodes the state’s capacity to govern.
Building a just transition
What, then, can be learned from this case—beyond memes and public accusations and counter accusations? Beyond immediate controversies and ongoing legal processes?
First, discipline in the allocation of public rights matters. Renewable energy service contracts and congressional franchises are not speculative instruments. They are public trusts. Granting them at scale without rigorous, ongoing verification of technical, financial, and organisational capacity invites failure—and shifts the cost of that failure onto the public.
Second, equitable climate financing requires strong state capacity. Climate finance is meant to correct market failures and support transitions that would not otherwise occur naturally or automatically. When governance is weak, however, climate-related finance can reward paper commitments rather than real delivery, concentrating benefits while socialising risks. This undermines both climate justice and long-term investor confidence.
Third, accountability must operate across institutions, not only through courts. Legal processes are essential, but they are slow and retrospective. Effective accountability also requires transparent disclosure, consistent enforcement of milestones, and credible consequences for non-delivery—regardless of political stature or corporate scale.
Fourth, transformative adaptation depends on institutional learning. Large-scale failures in renewable energy and flood-control infrastructure reveal the same underlying problem: the inability of public systems to learn, adapt, and correct course early. Without this capacity, climate responses remain reactive, fragmented, and unjust.
Finally, public trust is a form of national capital. When infrastructure promises collapse, trust erodes—not only in specific projects, but in the state’s ability to govern complex transitions. Rebuilding that trust requires more than new projects. It requires demonstrating that lessons have been learned, rules will be enforced, and public interest will prevail over short-term gain.
It is also important to be clear-eyed about expectations. While it is possible for private companies and investors to align with the aspirations of a just energy transition, equitable climate financing, transformative adaptation, and climate justice, it would be naïve to assume that these goals will naturally guide private decision-making. Private capital responds primarily to risk, return, and regulatory signals. The consistent pressure to ensure that climate action delivers fairness, inclusion, and long-term resilience has historically come not from markets alone, but from civil society, affected communities, and an informed public demanding more of both corporations and the state. It is this collective pressure that compels governments to craft development strategies, regulatory frameworks, and public investment priorities that are genuinely aligned with these broader ambitions.
There is, undoubtedly, much more to examine in the regulatory framework governing power generation in the Philippines—from market design and grid integration to pricing, competition, and system planning. A detailed assessment of these technical and legal dimensions, however, is not the primary aim of this piece. Rather, the analysis here is intended to underline a more fundamental point: that regulatory frameworks must be strengthened and applied consistently so they serve clearly articulated public goals as part of a whole-of-government, integrated, and coherent approach. These include sustainable development, climate justice, a just energy transition, equitable climate financing, and transformative adaptation—not merely the rapid scaling of capacity or the movement of capital.
A just energy transition, supported by equitable climate financing and oriented toward transformative adaptation, cannot be built on ambition alone. It rests on institutions that are credible, capable, and accountable. The real cost of failing to strengthen those institutions will not be measured only in pesos or megawatts, but in diminished capacity to protect the vulnerable and to lead the country through the intertwined crises of climate, energy, and inequality.
Without these guardrails, the energy transition risks becoming technically sound but socially hollow—delivering megawatts and financial returns while falling short of the justice, resilience, and transformation that climate action ultimately demands.
Author’s Note
This analysis is based on publicly available reporting, official statements, regulatory disclosures, and government announcements, including those issued by the Department of Energy in January 2026 and confirmations by the Office of the Ombudsman. Legal and investigative processes related to the matters discussed are ongoing. No findings of criminal liability are asserted in this piece. The purpose of the analysis is to examine governance, climate justice, equitable climate financing, and development implications in the public interest.
