Channel NewsAsia today reported that Singapore’s solar industry still has some way to go before companies are able to offer renewable energy to the public.
S’pore solar industry still fledgling
SINGAPORE: China’s third-largest maker of solar panels may have made Singapore its Asian Pacific headquarters, but observers said Singapore solar companies are still in their early stages to even consider offering their output to the public.
Still, this sunrise industry offers an exciting horizon ahead.
Across Asia, the solar industry got a boost with feed-in tariffs that reduced the cost of renewable energy.
These are cost-based compensation to renewable energy producers to help finance renewable energy investments.
But Singapore made the exception.
Singapore National Environment Agency CEO Andrew Tan said: “We are seeing slower growth in demand in countries where generous feed-in tariffs have been scaled back and markets are oversupplied.
“While it can be debated whether the initial support from governments for the solar industry was essential to its development, the world is now much closer than it was 10 years ago to grid parity, with some local experts even forecasting parity in Singapore by 2016.”
Grid parity means electricity from non-renewable sources will cost the same as renewable’s.
But before that, a new business model has emerged in Singapore’s solar industry.
Instead of selling, solar leasing allows a company to design, install and maintain the solar system at a small portion of the upfront costs.
Companies can also buy solar energy at a lower rate than the current electricity tariff for the next 20 years.
Sustainable Energy Association of Singapore chairman Edwin Khew said: “Companies who actually have a fairly strong balance sheet can go into this leasing thing because you need financing.
“Right now, the financial situation in Singapore, vis a vis, our banks, etc, I think they are still not open to financing such projects because they still aren’t quite sure what are the risk factors involved.”
EDB Singapore Cleantech director Goh Chee Kiong said: “The key impediment is familiarity, because solar projects in Singapore and the region are somewhat new.
“If you go back three or four years ago, there is hardly any major solar projects in this part of the world.
“But things have changed rapidly with the declining cost of solar energy systems. We have international banks – they have operations in Singapore that are related to renewable energy financing.
“The next phase for us is to see how we can encourage our local banks DBS, UOBs to get them familiarised with the financing projects in Singapore for solar, in Singapore as well as in the region.”
Recognising business innovative installations of solar systems in Singapore is one way to create awareness, apart from research and development.
Image taken from marshlight