Cost of solar panels and conventional electricity usage on a par now.
A Milestone has been reached for green energy here. For the first time, the cost of installing and maintaining solar photovoltaic (PV) panels is on a par with that of using conventional electricity. This is called grid parity, say academics and those in the industry. And it signals that an alternative form of energy could become viable without subsidies, which Singapore does not provide.
Large consumers faced with Singapore’s high electricity tariffs would especially welcome the dipping prices of solar panels.
Singapore’s electricity tariffs are among the highest in the region, said Dr Thomas Reindl, director of solar energy systems at the Solar Energy Research Institute of Singapore. That helps it achieve grid parity for solar power earlier than its neighbors.
In the past year or so, the cost of installed solar power here has roughly halved from $4 per watt to $2 per watt. And installed solar capacity here has gone up to match, from 361.9 kilowatt peak (kwp) – a measure of power output – at the end of 2008 to 5,546 kwp at the end of last year, most of it non-residential.
This would power more than 1,300 four-room HDB flats. Conventional electricity tariffs are 27,27 cents per kilowatt hour. Singapore’s largest PV systems of 500kwp to 1 megawatt peak would currently match those prices – when divided by the expected lifetime of a system, typically about 20 years, and taking the amount of sun into account.
Already, the HDB has been testing solar panels since 2010 under a $31million, five-year scheme. Mr Goh Chee Kiong, director of the Economic Development Board’s (EDB) clean technology group, said the drop in solar energy costs was driven by a rise in manufacturing around the world, and by technological advancement – and cost s will continue to come down. That makes solar panels a more viable option for users here, assuming that conventional electricity prices hold steady at today’s levels, he added.
Asked if grid parity was unexpected, Energy Studies Institute energy economist Tilak Doshi said: “What was unexpected was the rather sharp downward movement in solar PV module prices over the past two years or so.” But, he added, this is due to global manufacturing overcapacity and a drop in demand elsewhere, as governments in Europe cut back on subsidies.
Some companies here are taking advantage of the solar panels price drop:
Last month, Keppel’s K-Green Trust started installing 1MW of solar panels on about 10,000 sq m of roof space in the Keppel Seghers Ulu Pandan Newater Plant, enough to power 250 four-room HDB households. The solar panels will provide about 5 per cent of the plant’s needs.
But experts here say solar panels still have limitations, such as available rooftop space and installation costs. Meanwhile, Singapore is trying to push solar cell research further along. In June the Government’s Energy Innovation Programme Office awarded $11 million t researchers working on solar cells. And last year, the EDB and national water agency PUB announced plans to build a 2MW floating system on the Tengeh Reservoir. “It is a sector that was practically non-existent three to four years ago,” Mr Goh said.
Households may not see the benefits of grid parity just yet. But at least one company, solar leasing company Sunseap, is considering offering solar leasing to residential customers, such as those in landed homes. It will do this by using the savings from large-scale solar panels projects to offset the higher unit cost of smaller ones.