GEOP, RCOA or Solar? The Three Levers on a Philippine Business Electricity Bill

Quick Answer

Two thresholds moved this year. The DOE lowered the Green Energy Option Program threshold from 100 kW to 50 kW, and now permits businesses in the same franchise area to aggregate demand with no limit on group size. The ERC lowered the RCOA contestability threshold to 100 kW effective 26 June 2026. Most mid-sized Philippine businesses now qualify for something they didn't in 2025. The three levers reach different parts of your bill. GEOP and RCOA replace the generation charge — 91% of your energy cost, but only the energy cost. Solar removes kilowatt-hours entirely. Neither touches the demand charge. They stack. On a 60 kW facility we modelled, solar alone cuts 42% of the bill and GEOP alone cuts 7.6%. Doing solar first and GEOP on what remains reaches 46% — while the demand charge sits untouched throughout. Your load factor decides the order. Below 0.4, demand charges are up to 27% of your bill and neither procurement nor generation reaches them. Fix the peak first.

What changed in 2026

Two separate regulatory moves, both widening access, both underreported.

GEOP dropped to 50 kW

The Green Energy Option Program, established under the Renewable Energy Act, lets an end-user buy electricity directly from a renewable energy supplier instead of taking the distribution utility's generation charge.

<cite index="12-1">The Department of Energy officially lowered the minimum eligibility threshold from 100 kW to 50 kW of average monthly peak demand</cite>, and <cite index="5-1">now allows multiple end-users within a contiguous area to consolidate their demand, making it easier to meet the minimum eligibility requirement</cite>. <cite index="5-1">For GEOP aggregation there is no limit to the number of end-users that can form a group, provided they are all located within the same franchise area.</cite>

It is also not the end point. <cite index="12-1">The DOE will conduct an annual review of the 50 kW threshold, prioritising gradual reduction to 20 kW, 10 kW, and eventually 0 kW.</cite>

The aggregation provision is the part most people have missed. A group of tenants in one industrial estate, or several branches within a franchise area, can now combine demand to qualify — even where no single site reaches 50 kW.

RCOA dropped to 100 kW

Separately, the ERC lowered the Retail Competition and Open Access threshold to 100 kW, effective 26 June 2026. RCOA lets a qualifying customer buy generation from any licensed Retail Electricity Supplier, renewable or not.

Below that threshold, Meralco's Retail Aggregation Program allows customers to aggregate demand to qualify.

What each lever actually reaches

This is the part nobody explains, and it decides everything.

Under Meralco's General Power Secondary tariff (July 2026, VAT-exclusive):

Generation is 91% of your energy charge. That is why switching supplier matters — and also why it is capped. GEOP and RCOA replace one component. They cannot touch system loss, distribution energy, or the demand charge.

Solar is different in kind. It doesn't renegotiate a rate, it removes kilowatt-hours — so it takes the generation, system loss and distribution-energy components together, at ₱10.1355 per kWh removed.

Neither reaches the demand charge, which is billed on your single highest sustained draw regardless of consumption.

The arithmetic, on a real profile

A facility with 60 kW peak demand and a load factor of 0.45 — typical of a restaurant, a mid-size office, or a light manufacturing operation on one shift.

GEOP alone

Suppliers compete on the generation rate. Assume a discount below Meralco's generation charge:

Real, and it requires no capital at all — it is a procurement decision, not an investment. But it is bounded by what a supplier will discount.

Solar alone

Larger, because it removes the whole energy stack rather than discounting one component — but it needs capital and roof.

Both

Solar first, GEOP on what's left:

Note the order. Doing solar first shrinks the volume GEOP applies to, so GEOP's contribution falls from ₱17,983 to ₱8,867. That is not a reason to skip it — it is a reason to negotiate the GEOP contract knowing your solar plans, rather than signing a volume commitment you'll undershoot.

Which lever first? Use your load factor

Load factor = monthly kWh ÷ (peak kW × 720)

It tells you how much of your bill is energy versus capacity — and therefore which levers can reach it.

A low load factor is the signal to stop and look at operations first. Staggering equipment start-up, moving deferrable work off the peak, pre-cooling, and correcting power factor all cost nothing and reduce a charge that no procurement contract and no solar array will touch.

The practical differences

The strategic difference is ownership. GEOP and RCOA are better rates on power you keep buying. Solar is an asset that stops you buying it. A supply contract ends; an array doesn't.

For a business with sustainability reporting obligations, GEOP delivers a clean claim on 100% of consumption immediately, where a rooftop array typically covers a portion. Some businesses do both for exactly that reason.

What to do before you talk to anyone

Pull the demand (kW) figure off your bill. Not consumption — peak demand. It determines which programmes you qualify for and how much of your bill is beyond their reach.

Calculate your load factor. Two numbers, one division, and it tells you the order of operations.

Check whether you're already eligible. Distribution utilities notify qualifying customers, but notifications get missed. At 50 kW average peak you may qualify for GEOP now and not know it.

Consider aggregation if you're below 50 kW and have branches, tenants or neighbours in the same franchise area. This is new, and it has no group size limit.

Request your load profile data. Free from your DU, and it shows when your peak actually occurs — which is the one thing that determines whether solar reaches your demand charge.

Then decide in order: fix the peak, install what the roof and load profile justify, and negotiate supply for what remains.

Frequently asked questions

What is the GEOP threshold in 2026?

The Department of Energy lowered the Green Energy Option Program threshold from 100 kW to 50 kW of average monthly peak demand. Multiple end-users within the same distribution utility franchise area may now aggregate their demand to qualify, with no limit on group size. The DOE has stated it will review the threshold annually with a view to reducing it to 20 kW, then 10 kW, and eventually zero.

What is the difference between GEOP and RCOA?

Both let a qualifying customer buy generation from a Retail Electricity Supplier instead of the distribution utility. GEOP requires the supply to be 100% renewable and applies from 50 kW average peak demand. RCOA allows any generation source and applies from 100 kW, lowered from 1 MW effective 26 June 2026.

Does GEOP or RCOA reduce my demand charge?

No. Both replace the generation component of your energy charge, which is about 91% of the energy cost per kilowatt-hour. Demand charges — ₱427.97 per kW for transmission and ₱232.20 per kW for distribution — are billed on peak capacity and are unaffected by who supplies your generation.

Should I do solar or switch supplier?

They address different parts of the bill and can be combined. In our modelled 60 kW facility, a 100 kWp array cuts 42% of the bill while GEOP at a 10% generation discount cuts 7.6%. Doing both reaches about 46%. If your load factor is below 0.4, demand management should come before either.

Can small businesses join GEOP?

Individually, only at 50 kW average monthly peak demand or above. However, the 2026 rules allow multiple end-users within the same franchise area to aggregate their demand with no limit on group size, which brings the programme within reach of tenants in a shared building or estate, and of businesses with several branches.

Does GEOP require any capital investment?

No. It is a procurement right rather than an investment — you change who supplies your generation, not your equipment. That is the main practical difference from solar, which requires capital but leaves you owning an asset that produces for about twenty-five years.

Assumptions and sources

Sources: Department of Energy GEOP revised rules, 2026; Philippine Star and Manila Bulletin reporting on the threshold reduction; Energy Regulatory Commission RCOA threshold reduction effective 26 June 2026; Meralco Summary Schedule of Rates.

Thresholds and rules are changing on an announced review cycle. Confirm current eligibility with your distribution utility before acting.

Send SolarSwitch twelve months of bills including the demand (kW) figures and we'll tell you which levers you qualify for, in what order they're worth pulling, and how much of your bill none of them can reach.