Solar Panels / energy business in Singapore

Table of Contents

Introduction. 3
Overview of the Industry. 4
Singapore’s Energy Structure and Key Aspects. 5
Solar Industry Focus in Singapore. 6
Industry Policy Analysis and Implications. 7
Economic Analysis and Implications. 10
Industry Drivers. 11
Trend and Forecasts. 12
Conclusion. 13
Recommendation. 13

References. 13

Appendix. 15

Appendix 1: Payback period, solar PV panel 15

Appendix 2: Price of Solar Energy. 16

Appendix 3: Price of Solar Panels. 17

Appendix 4: Cost Electricity. 18

Executive Summary

Singapore is highly reliant on oil and gas as sources of energies. These energies are imported at expensive prices. The country is trying to focus on much more sustainable energy and has resulted to investing in research and new ways of creating energy. The country invests in sustainable energy for much more affordable energy. The paper will start by having an over view of the energy in the country and how it has progressed with time. This will go on to focus on the various models so as to have a good picture of how the industry operates. From this the forecasts and policies affecting the industry will be so as to get the feasibility of the industry for solar energy production. Since businesses look to get economic success, this will be focused in terms of investments, taxes and policies as well as competition available. Lastly, the paper will focus on the industry drivers and trend and future ability. Through this elements, the paper will come up with a recommendation.

Solar Panels / energy business in Singapore

1. Introduction

Located in the tropical climate, Singapore’s solar energy looks to be the most promising energy resource. The country has put in place efforts, like investment in solar technology test-bedding projects that place the path for use of solar technology on a bigger level when solar is economically usable. This means that the price of solar energy has to be close to traditional energy. However, Singapore looks at solar energy as being promising, it has not been made applicable in grid parity. This is due to solar power being not economically viable at this level.

In 2008, the country set up a Solar Energy Research Institute of Singapore and started to work. Its duties is to undertake industry-based research and growth on solar energy. The method is to acquire experts from within and outside the country. Focus was directed to industry relevant regions of R&D and engage in globally popular organizations to acquire knowledge. The paper will focus on the viability of solar energy in Singapore. The business of acquiring solar energy using solar panels so as to create energy to the country.

2. Overview of the Industry

Singapore is highly reliant on solar, as a form of renewable energy, to meet its energy needs. For the past decade, there has been a rising concern on global warming hence putting pressure on the government to change its energy strategies. The country is greatly developing and moving towards less fuel reliant energy solution. Investment has been directed to the industry in terms of resources and research so as to generate sustainable solutions (King, and Wettergren, 2011). The solar energy is an irregular source of energy that is greatly adjusted to tropical weather settings and hence would be widely applied in the country. There are a number of solar panels that are in process of being develop and advanced at a high speed. Additionally, this is undertaken through study of integrated systems that are in use in Europe and other nations.

Singapore industry makes use of Inglin installed solar PV that are priced at 3.50 – 4.00 SGD/Wp that would be enough to meet the grid parity. Currently the industry has companies, like Phoenix Solar, that installs the grids. However, the price of placing the solar modules is on the decline because of the supply and advancement in addition to innovations. Additionally, it is expected that the price of electricity will rise (King, and Wettergren, 2011). The industry is able to acquire reduced costs using a whole system method by focusing on cost of cables, mounting systems and inverters. The use of solar energy in Singapore is growing to be a commercially relevant venture with focus on how the government is showing interest in the growth of renewable energy and more so the solar energy.

Due to Singapore’s limited resources as an optional from of energy, the government has turned its focus to solar energy. Here, the government is keen in applying energy efficiency as an essential strategy. Hence, funds would be directed by the government as a way of increasing efficiency in the process of indoor cooling. This is since it is a main field of energy consumption in the warm climate that is found in the country (King, and Wettergren, 2011). Through this, the government looks to handle the issues of climate change and energy security.

3. Singapore’s Energy Structure and Key Aspects

Singapore’s energy system is fostered through competition in the creation and distribution of energy through solar panels that work efficiently and react nimbly to varying situations. The country was the first in Asia to liberalize electricity. Due to the competition issues, most of the power plants were initially powered through fuel (Kalogirou, 2004). They have since changed to much more energy efficient means that are efficient and distribute benefits to economy. The solar panel industry is growing fast through government support. It has dropped carbon intensity and electricity costs (Appendix 4).

Singapore is getting huge investments in Solar PV panels. The Housing industry through the Housing Development Board accorded Norway Company with over 2 million to install the solar photovoltaic panels on the houses (Kalogirou, 2004). It is with this installation that it will be the biggest solar panel procurement in Singapore. The electricity acquired from the solar panels will several areas.

The project is divided into phases where the housing project will installation of solar panel will be the second phase while the first phase will lead to 500 kWp solar pV installation at four HDB. The solar power acquired will offset the electricity that facilitate the common regions. The housing project has a great ability as over 80% of the occupants in Singapore about 4.8 billion are in these houses (Luther, 2010).

4. Solar Industry Focus in Singapore

Singapore’s economy has grown over the past few periods due to foreign investment and social development. The country’s GDP went from 9255 USD to 43 867 USD while the population grew fast from 2 million citizens to well over 5 million in 2010 (King, and Wettergren, 2011). Without regard to its size, the country has developed to be a global metropolis and successful location of industry. Singapore is located by the equator making the climate around it warm and humid. This type of climate has a great impact on the industry’s energy use.

In 2008, the country’s total primary energy production grew to 3.83 toe/capita, the occupants used electricity of about 8, 186 kWh/capita while the emission was 9.16 t CO₂/capita (Liang, 2010). Drawing comparisons from nations with extensive energy production like Sweden, we are able to get that the primary production in 2008 was 5.36 toe/capita, the electricity use was 14 811 kWh/capita and emission 4.96 CO₂/capita (King, and Wettergren, 2011). Even though the energy use is great in Sweden, the emission is higher in Singapore.

In terms of distribution of occupations, over 20% of the country’s GDP is acquired from manufacturing, 15% from wholesale and retail commerce, 13% from business operations.

The liberalization of energy by the industry began in 1995. This was made possible through corporatizing industry resources and commercial footing them (Kalogirou, 2004). This led to the creation of an energy market. The industry as gone through structural reforms over time; 2001 saw the introduction of a legal and regulatory model. This was the basis of a new electricity market for the industry. The Energy Market Authority of the country was formed through an act. The structural changes in the energy industry resulted to the creation of wholesale market National Market of Singapore in 2003 (King, and Wettergren, 2011). EMA resulted to the creation of NEMS and was issued with power to oversee:

The separation of ownership in the industry
Setting up of a power system and market operator
Setting up a whole sale market.
Liberalize of retail market.

However, the energy industry is limited on natural resources and is impacted by the geographical and physical attributes (Liang, 2010). Hence, solar energy is not well exploited as oil and gas. The country has advanced and aimed to use solar energy using solar panels. It’s relative small scale to oil and gas.

5. Industry Policy Analysis and Implications

In 2007, the government of Singapore has noted the threats that arise from global economic variation and noted that it is an environmental issue. The country would be an integrate of several global strategies to handle to look into the issue through doing their part while not volunteering to limits its emissions at cost of economic progress (Keong, 2008). Taking this in mind, the government included the Ministries of Trade and Industry (MTI), foreign relations, Finance, Economic Development Board and Environment Resources as well as Energy Market Authority. This integration of several ministries in Singapore looks to come up with a National Energy Policy (Keong, 2008). This policy looks to have a balance of policy goals of economic success, energy security and environmental sustainability.

The policy comprises of six main strategy points that look to make it necessary to acquire the goals of a progressive economic growth (Keong, 2008). At the same time making sure that there is energy security and safeguarding the natural setup.

Strategy 1: creating competitive markets

Through this, Singapore is able to acquire cheap solar energy and make sure there is economic competitiveness. In addition to liberalization of the market, the country is looking on how to acquire complete contestability. Failures that arise in the market are resolved using market-based tools or standards and procedures. The private sector similarly can innovate and acquire energy security.

Strategy 2: Improve energy efficiency

This is important as it makes it possible for the country to acquire its goals of energy policy. This considers that the application of less energy to acquire the same result. This will reduce the reliance on other energy imports and raise security and trim business costs, as well as reduce pollution (Keong, 2008). The government has created an Energy Efficiency Programme Office and began an extensive national energy efficiency strategy. This is headed by NEA.

Strategy 4: Build Energy Industry and Invest in R&D

Singapore looks to develop its energy opportunities in renewable energy. This calls for a rigid R&D that can uphold the industry. This will make it possible for the country to manage energy issues in the country.

Strategy 5: Improve Global Cooperation

It is necessary that energy policy includes efforts that aim to promote other energy companies. Singapore takes part in several efforts keen on energy in renowned associations like Association of Southeast Asia nations, APEC and EAS. Through this steps the country is able manage issues of climate change.

Strategy 6: Create an Inclusive Government Approach

Considering the complication and significance of a sustainable plan of a comprehensive energy policy it is necessary to have the whole government involved. This started in 2007 when EPG was an association of several agencies (Keong, 2008). EPG looks to create and manage energy policies and efforts.

The NEA report of 2007 of the energy industry gives several policies that will develop the energy industry. These strategy are divided from local to regional status.

Expanding Solar Production

There has been a growing demand for electricity, Singapore has noted the major benefits of elevating their solar energy production of over 1 MW daily. With its vast temperature, the government has to take this opportunity to develop the growth and development of solar panel installation and allow for investments as well as create jobs. This policy looks to sustain the country’s share of international volume hence creating the liquidity needed secure business in the industry.

Develop the industry to energy trading

Singapore has been conscious of the opportunity that has presented itself in solar energy to create electricity. It has to make use of the experience it has it oil trading to increase its solar energy production of products priced and traded in the country (Keong, 2008). In 2007, the companies that deal in the Global Trading Trader Programme (GTP) solar energy distribution were issued with taxation at the rate of 5% in income acquired from LNG trading. The trading programme similarly comprises of emission of trading credits.

Develop the clean energy sector

The global market for clean technologies looks to go through major development. In terms of the projected growth Singapore has noted that clean energy is essential for growth. The abilities that Singapore has in industrial equipment places it in a good base to acquire opportunities that come about in solar markets. Another necessity vital for development of the energy sector is the creation of environment which allows and develops technological innovation.

Assist sustainable energy solutions providers to grow in the region

Another major focus is to note that the current high rate of urbanization and consciousness regarding climate change issues will lead to major request for sustainable energy solutions that are vital in urban areas. There are parts of the country that can acquire market opportunities, one of them being intelligent grid management that can be met through a several energy services. These services have the ability to allocate their skills on energy efficiency and sustainment.

6. Economic Analysis and Implications

When looking at the economic aspect of solar panels it is viable to say that focus on the net value of investing in the industry annually without considering inflation or returns. This can be done with the help of payback method (Keong, 2008). Looking how maintenance is added in the investment annually, it acquires a return in investment the same as the cost of income acquired from value of electricity required. The diagram shows the net value annually if the first scenario is taken into consideration. The graph (Appendix 1) shows the net value annually if the first instance is taken into consideration. Additionally, it shows that investment in the industry will take about 20 years to break even.

The mean level of energy acquired from the sunlight for every square meter was 1312 kWh/m². This shows a panel generation of about 257 kWh/m² yearly. The amount acquired annually is shown (Keong, 2008; Appendix 2). It shows the price elasticity acquired from the solar panels being about 7 SGD/kWh. The price declines with additional electricity in a certain period (Appendix 3). This relates to the decline income annually.

7. Industry Drivers

There are several drivers found in the energy industry. For solar energy to work effectively, there are several bodies that work behind to make sure that it is possible. They are three; the government, private sector and the consumers. The consumer among all of these drivers is the most important as he is the last user of these process and if he or she is not there then the efforts made by the government and private sector will not exist. Though they all play a vital role in the industry.

Common in all of the other industries, the government’s presence is comprised of mixed fortunes as it has to control the industry while aiming to give financial assistance to private sector to invest in the industry (Luther, 2010). This variation in attributes offers conflicting policies and needs. For instance, the government aims to limit its spending, elevate access by the consumers, strengthen the private investment hence getting income and taking into consideration the aspects of climate change.

Going to the private sector, any advancement of financial assistance acquired from it will be directed to getting new technology that can transform the market. The aim is definitely is to get profit that will accord wealth to the investors. There are conflicting focus that have to considered; like presence of bodies with ideas that can attract investors an clients but risky and there are huge companies with experience that may affect them (Luther, 2010). These companies may look to spoil their operations while making sure that they keep focus on the finances. Taking into consideration the innovation happening, there will always be matters related to business structures that result to major decline.

In this category falls other competing companies. There is major competition in whole sale market comprising of five major companies. Singapore power acquired sums up to 9581 MW, while the biggest companies in the industry are Power Seraya, Tuas Power Ltd and Senoko Ltd that create 84% of the total power for the country (Zahedi, 2005). Such companies have innovative technology that drives the companies’ effectiveness to great heights.

Lastly, there are clients. In majority of the times where energy is the main issue, since people will constantly have to use energy to drive their daily lives (Zahedi, 2005). This applies in industrial and transportation areas for the objective of manufacturing and transportation of products and services that meets the needs of the clients. Only the companies in the energy industry that are aware of this and apply it will be able to be successful in marketing to the client.

8. Trend and Forecasts

Solar energy in the country has an average output of 1,150 kwh/kwp/year. The country sets to increase its solar energy output to 9,800MW and 53,900MW by 2030. Currently, R&D in solar energy is directed to pilot projects financed by the government (King, and Wettergren, 2011). There are 4 power plants with a maximum of 251 MW meeting only 2% of the total power need in the country.

In December 2009, the total output for the solar capacity was about 1.8 MWp. Plans are in progress to bring this to 4 MWp under government control. Singapore looks to set up itself as the base of R&D for renewable energy (Liang, 2010). The government has created its solar capacity model to facilitate RE design, integration and acquisition.

9. Conclusion

The paper has been to undertake an industry focus of solar energy in Singapore. The system is noted to be new to the country and has grown fast due to a lot of investment and government support through policies. Though challenges arise that make it hard to effectively apply the new energy production method using solar PV panels.

10. Recommendation

Focus on the industrial research showing other competing energy production methods, it is interesting to analyze the abilities provided by PV technologies to facilitate energy production like GaAs and GaInP. However, they are quite expensive and are not competitive in the market. On the other hand it is recommended to dedicate time and focus on the energy that can be saved through using the PV solar panel as another option to other forms of energy. Taking into consideration that this is a new system in Singapore, it would be quite difficult to get its actual terms. It has however been successful in other countries and may call for expensive tools and staff to make it work. Time should hence be given to acquire resources in tools, staff and finances for implementation.

References

Kalogirou S. A. (2004). Solar thermal collectors and applications. Progress in Energy and Combustion Science, 30, p. 231–295

Keong P. K. (2008). Energy for Growth: Singapore’s National Energy Policy. Retrieved on 11th November 2013 from http://www.esi.nus.edu.sg, retrieved 2011-02-26.

King, S. and Wettergren, P. (2011). Feasibility Study of Renewable Energy in Singapore. Retrieved on 11th November 2013 from http://www.diva- portal.org/smash/get/diva2:444754/FULLTEXT01.pdf

Liang L. H. (2010), “Solar power usage in Singapore could reach grid parity by 2014.” Retrieved on 11th November 2013 from http://www.rechargenews.com.

Luther (2010). Solar energy – the basis for a sustainable global energy supply system, SERIS. Retrieved on 11th November 2013 from http://www.seris.sg.

Zahedi A. (2005). Solar PV (PV) energy; latest developments in the building integrated and hybrid PV systems. Renewable Energy, 31, p. 711–718.

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