As solar installations have doubled in Singapore over the past 4 years, it’s interesting to note that it makes sense for businesses in Singapore for several reasons:

Lower energy costs

Electricity prices in Singapore are among the highest in Asia, and solar energy can provide a more cost-effective alternative to traditional grid electricity. By installing solar panels, businesses can generate their own electricity and reduce their reliance on expensive grid power. A typical pay-back for a solar energy system installed by a business would be around 4 years, considering the incentives such as net metering and sale of Renewable Energy Certificates (RECs) in the market. RECs also have attractive pricing in Singapore, with current levels of SGD 40/REC.

Securing a stable energy cost

In the current geopolitical context where energy security is compromised (due to the war in Ukraine, among other reasons), retail electricity rates are predicted to raise further. The Singapore government is also planning to increase Carbon tax from current $5/tCO2 to $25/tCO2 in 2024–2025, with a view to reaching $50–80/tCO2 by 2030. While Carbon tax is applied to entities that emit direct greenhouse gas equal to or more than 25,000 tCO2e annually, power generation companies and electricity retailers may pass on part or all of the carbon tax to consumers. Currently, the estimated impact of carbon tax ($5 per tonne of greenhouse gas) on households is very small, at about 1% of the utilities bill on average. However, since $5 is poised to grow to $25 and $50–80 subsequently, this could lead to further increases in household and business electricity rates. Solar panels and solar power can help businesses secure a stable energy supply and cost amidst these challenges.

Government incentives

The Singapore government offers some incentives to encourage the adoption of solar energy, in the form of net metering and tax. For instance, with the introduction of net metering, the Singapore government has strongly encouraged solar PV installations for businesses as businesses are now able to generate additional returns from solar panel systems installed even during non-operational hours i.e. on weekends/ holidays. For more information, take a look at the Energy Market Authority website.

Environmental sustainability

Adopting solar energy and solar panels can help businesses reduce their carbon footprint and demonstrate their commitment to sustainable practices. Singapore has set a goal to reduce its greenhouse gas emissions intensity by 36% from 2005 levels by 2030, and adopting solar energy can contribute towards this target.

Brand reputation

Finally, embracing solar energy can help businesses enhance their brand reputation and appeal to environmentally conscious consumers. By showcasing their commitment to sustainability through the use of solar panels and solar energy, businesses can differentiate themselves from competitors and attract new customers.

Overall, solar energy presents a compelling opportunity for businesses in Singapore to reduce costs, improve their environmental impact, and gain a competitive advantage.