The controversies currently hounding Batangas Representative Leandro Leviste seems to weigh on the market performance of SP New Energy Corporation (SPNEC) considering its associated links to the legislator. (READ: SPNEC to rebrand as MGEN Renewable Energy Holdings amid scrutiny over Leviste links)

Leviste’s Solar Philippines Power Project Holdings Inc. (SPPPHI) — from which SPNEC was taken out — is the subject of a P24-billion fine by the Department of Energy (DOE) for failure to fulfill its energy generation contracts. His solely controlled Solar Para Sa Bayan Corp. (SPSB) is as well the subject of a present investigation by the Ombudsman for alleged franchise violation owing to the legislator’s share transactions with SPNEC. 

When these issues blew into the open last January 14, SPNEC’s stock price has a 52-week high of P1.63 and a 52-week low of P1.03 per share market record.  

SPNEC’s dramatic price climb to its 52-week high of P1.63 per share happened on August 8, 2025 solidified by fresh reports on the ongoing construction in July of the Terra Solar project, the world’s largest integrated solar and battery storage facility and a joint venture project of SPNEC involving Meralco’s renewable energy subsidiary, MGreen Renewable Energy Inc. (MGreen). It was also the climax of the various share sales and exchangeable note agreements made by Meralco with Leviste leading to the effective backdoor listing of MGreen through SPNEC. 

SPNEC first disclosed to the Philippine Stock Exchange (PSE) MGreen’s initial investment agreement to subscribe to its common and preferred voting shares amounting P15.9 billion on October 12, 2023. A subsequent key disclosure regarding the initial payment was made on December 1, 2023 which made MGreen as the controlling shareholder of SPNEC with a 50.5% voting interest.

Additional investments and share transfers have been disclosed since then, including a major transfer via a special block sale on October 28, 2025, bringing its stake in SPNEC to 55.96%.

SPNEC’s 52-week low was actually set on April 7, 2025 when the Philippine Stock Exchange index (PSEi) experienced its worst single-day fall of the year, dropping 4.3% (261.34 points) to 5,822.85, triggered by a market-wide sell-off primarily due to fears that US trade policies, specifically China’s 34% tariff on US goods, would escalate into a global trade war.  

However, when the issues against Leviste broke loose in January 14, SPNEC’s share price dropped to P1.06 but managed to close at P1.11 by the end of the day. Since then, SPNEC’s share price has not recovered and remained at the P1.11 to P1.13 range despite public pronouncements by Leviste and Meralco clarifying the points at stake.

Generation business

SPPPHI is the private holding company wholly owned by Leviste, founded in 2013 for his power generation business. It was able to corner the majority of the original renewable energy service contracts awarded by the DOE under its Green Energy Auction Program (GEAP) and with other agreements reached between 2014 to 2019.

SPPPHI holds 33 service contracts accounting for 11,427 megawatts (MW) or roughly 64% of the 17,904 MW total capacity of the 163 renewable energy service contracts awarded by the DOE. Leviste is now facing the largest fine ever levied, amounting to P24 billion as penalty for failing to meet development milestones and delivery deadlines for these service contracts.

By holding these contracts without breaking ground, the DOE claims that SPPPHI prevented the government from meeting its goal of a 35% renewable energy mix by 2030. The company, as well, has effectively blocked the grid from other legitimate developers to help the government realize its plan to reduce the cost of electricity by P2 to P3 by 2030. 

The fine is not a single penalty but a culmination of several financial obligations triggered by the contract terminations. The largest chunk comes from forfeited performance bonds required under the Green Energy Auction Program, equivalent to P14 billion. The rest of the amount includes the “cost of the project” penalties stipulated in the service contracts for failure to deliver, and unpaid training and development fund fees that developers are required to pay the government annually.

The DOE has referred the case to the Department of Justice (DOJ) and the Office of the Solicitor General (OSG) for the collection of the ₱24 billion. There is also a pending recommendation to blacklist SPPPHI from participating in any future government energy auctions. The 11,427 MW service capacity that was obtained by SPPPHI has been “freed up” and will likely be put back on the bidding block for other developers later in 2026.

Power distribution operation

Solar Para sa Bayan Corp. (SPBC) is the renewable energy company established by Leviste for power distribution. It’s the first solar company to receive a nationwide-scope congressional franchise under Republic Act No. 11357. He launched this initiative to provide 24/7 power to off-grid towns using solar-battery microgrids.

Power distribution companies (Distribution Utilities or DUs), including electric cooperatives, must secure a congressional franchise to operate pursuant to Section 27 of Republic Act No. 9136 otherwise known as the Electric Power Industry Reform Act or EPIRA. SPBC was granted a 25-year non-exclusive franchise on July 31, 2019.

Under its franchise, SPBC is authorized “to construct, install, and operate energy systems in specific areas to improve access to sustainable energy.” But the franchise is further limited to “remote and unviable, unserved, or underserved” areas as in areas with no electricity access at all, and in areas “where electricity is available for less than 24 hours a day or fails to meet national service standards.”

SPBC’s franchise also specifically mandates the use of “Distributed Energy Resources (DERs) and Microgrids utilizing renewable energy,” like solar or hybrid systems.

Despite having a congressional franchise, SPBC must still secure permits to operate from the DOE and the Energy Regulatory Commission (ERC). It is also required to charge “reasonable and just” rates approved by the ERC.

In its franchise, SPBC is likewise explicitly not entitled to government subsidies for its operations under this law, unlike many electric cooperatives.

Lately, Leviste admitted that SPBC is defunct and has not been operational for several years. He cited regulatory hurdles and “red tape” as reasons for the company’s failure to launch its planned microgrid projects.  

Sustainability and viability issues  

SPNEC is legally and operationally distinct from SPPPHI. It is not involved nor in any way affected by the P24 billion fine imposed by the DOE on the latter. Per disclosures to the PSE, too, it appears that SPNEC never had any share transactions with SPBC that may constitute an unauthorized transfer or violation of SPBC’s congressional franchise.

As of January 2026, SPNEC is completely transformed into to a subsidiary of Meralco from a Leviste-led startup. Meralco has taken solid majority control with Leviste holding a significant minority stake directly and indirectly through SPPPHI’s remaining stake in SPNEC.

At the market price of approximately P1.11 to P1.13 per share, the market capitalization of SPNEC is divided as follows:

SPNEC’s enterprise value is estimated at P128 billion, taking into account the heavy debt load carried by the company to finance its P200-billion Terra Solar project.

Despite these clarifications, SPNEC’s soft market performance is unabated. Leviste’s negative reputational overhang as one of the most controversial personalities in business and the Philippine political landscape today is just too much.  

The previous excitement the Terra Solar Project has brought to the public — being the world’s largest single-site solar project surpassing projects in China and India for it’s a 3.5 gigawatts (GW) solar power system paired with 4.5 gigawatt-hours (GWh) of battery storage capacity — is lost.  

MGreen also received a termination notice from the DOE on its Sta. Rosa power project, in which it is currently appealing to the agency for reconsideration. Meralco’s “PR” refrain about the matter is but complacent too.

But what could be the more undermining factor is SPNEC’s power system: as of mid-January 2026, the Terra Solar Project has become the definitive test case for the Philippines’ energy transition. While it is being hailed as a “monumental milestone,” the National Grid Corporation of the Philippines (NGCP) has issued stern technical warnings that highlight the fragility of SPNEC’s power. The most significant technical challenge raised by the NGCP involves frequency stability.

NGCP cited data from the San Marcelino Solar Farm, where a single cloud caused a sudden 300 MW drop in output within seconds. Because Terra Solar is so massive (3,500 MW), a similar weather event could cause a massive “power hole” that the grid cannot easily fill.

Under RA 9513, solar is “must-dispatch,” meaning it gets priority. NGCP argues that this law forces the grid to accept unstable power even when it risks a total blackout.

SPNEC included a 4,500 MWh Battery Energy Storage System (BESS) to address the issue. But NGCP is not satisfied unless the BESS must be “grid-forming.” This means the batteries must act as a virtual anchor for the grid, providing “fast-acting response” to mimic the steady rotation of traditional coal or gas plants.

SPNEC is working on its BESS in phases: its Phase 1 of 1,125 MW of storage is ongoing, and is designed to sustain power for 4 hours, specifically to cover the “evening peak” when solar generation ends but demand spikes.

Also, the mismatch between the project’s speed and the grid’s capacity that was discovered in late 2025 is critical bottleneck. The ERC recently authorized Terra Solar to use “temporary bus-in connections” to the 500-kV Nagsaag-San Jose line. The permanent connection point, the San Isidro 500-kV Substation, is not expected to be completed by the government until 2031 or later.

Operating on temporary connections for the next 5+ years increases the risk of local voltage fluctuations, which NGCP says already caused minor equipment damage in parts of North Luzon in December 2025.

If the NGCP’s technical concerns aren’t met, the entry of Terra Solar could ironically lead to more frequent brownouts in the short term due to “system frequency fluctuations.” However, if the BESS works as intended, it will provide the first-ever “24/7 solar” at a scale that could finally lower the average Meralco bill by reducing reliance on imported coal. – Rappler.com

(The article has been prepared for general circulation for the reading public and must not be construed as an offer, or solicitation of an offer to buy or sell any securities or financial instruments whether referred to herein or otherwise.  Moreover, the public should be aware that the writer or any investing parties mentioned in the column may have a conflict of interest that could affect the objectivity of their reported or mentioned investment activity. You may reach the writer at [email protected])  

Related articles on the Leandro Leviste solar energy business:

• [Vantage Point] The Leviste gambit: Monetizing clean energy for political gains?
• [Vantage Point] The Leviste solar saga – why markets should be worried
• [Vantage Point] Consumers pay for DOE’s delayed action on Leviste firms 
• [Vantage Point] The solar tale: Jurisprudence slays Leviste’s thinly veiled tact