Saturday, September 17, 2011

Singapore's First Solar Leasing Project

Solar power production, although very attractive, requires a very high upfront cost. Solar photo-voltaic panels are relatively expensive compared to energy they produce. The upfront cost can be only covered in a very long period (20+ years), if it can be covered at all. This is basically the main reason you do not see solar panels on the top of every building. It is simply not financially attractive yet. Or maybe it was simply not attractive in the recent past.

A privately held company in Singapore now offers a Solar Leasing solution. Sunseap Leasing, an affiliate of Sunseap Enterprises (which is Singapore subsidiary of SUNSET Energietechnik GmbH), offers a leasing scheme which enables its customers to go solar at an affordable price. The company shoulders design, development, installation and maintenance work and cost of the solar photo-voltaic system while the customer pays a percentage of upfront cost and simply continues to pay by buying electricity from the solar system.

And Singapore's largest developer, The Housing & Development Board (HDB), officially became their first customer to lease 2 mega-watt-peak (MWp) solar photovoltaic (PV) systems. The systems will be installed on the top of 45 HDB residential blocks in Punggol in this  first solar leasing project in Singapore.[1]:

"HDB will cover 30 percent of the initial start-up costs or S$3.28 million, while the outstanding costs will be obtained from Pasir Ris Punggol Town Council through the solar power that is generated and consumed over the years.

Cheong Koon Hean, Chief Executive Officer of HDB, commented, “Punggol, as Singapore’s first Eco-town is the ideal location for us to expand our solar PV installations through solar leasing.”

“The solar leasing model presents a win-win situation for all parties. Energy usage can be optimized with lower usage of power from the grid, thus reducing our carbon emissions in the long term.” [2]

Solar Photo-voltaic modules on HDB rooftops in Singapore - Source: Sunseap Enterprise Pte. Ltd.

It is great to hear that the project cost and risk is largely shouldered by private investment. I am personally against making something feasible by large subsidiary from taxpayers money, so I was always skeptical about this solar power buzz since most projects in Europe and US are only feasible by government subsidizes.

It is now very good to see that a private company shoulders the risk and bulk of upfront cost. Solar power production can indeed be feasible in Singapore since we have relatively high insolation (solar energy received by an area in a given time) and electricity prices are relatively higher here. At first glance, Singapore lacks large lands that is required by solar panel systems but Singapore does not lack large, flat rooftop area. Actually HDB rooftops are great places to install solar panels since they are large, flat and covers a large population of energy consumers.

Installation of this system will be completed by mid 2012. Punggol is selected because it is Singapore’s first Eco-town thus the ideal location for HDB to expand solar PV installations through solar leasing.

[1] - First Solar Leasing Project In Singapore
[2] - HDB kicks off Singapore's first solar leasing project

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