Snippets of Environmental Conversations on the Island by students in the Environmental Studies programme
Sunseap: Singapore’s Solar Leader
By Subhas Nair (far left), Alex Pont (3rd from right), Peter Lewis (2nd from right) and Maria Ivanenko (far right), with Mr Brandon Lee, Senior Manager of Business Development at Sunseap Singapore.
“The iPhone 10 is going to be better than the iPhone 6, but why do you buy now?”
This was the question posed to us by Mr Brandon Lee, Senior Manager of Business Development at Sunseap Singapore. If you answered ‘because you need it’, then you need to pay attention to solar energy in Singapore, and in particular, the work being done by the Sunseap Group.
We had the pleasure of sitting down with Mr Lee at his office at Boon Lay Way. Sunseap is a local business involved in providing solar energy to companies in Singapore. The company recently made headlines when Apple Inc. announced that they would be working with Sunseap to power their facilities with renewable solar energy.
When Sunseap started in 1979 as a manufacturing company, it initially produced solar garden lights which were distributed in Singapore, Malaysia and the United States. Then, Sunseap moved to producing solar panels which were regionally distributed. However, the adoption rate of these solar systems was low due to the high upfront cost borne by the consumer. In 2010, Sunseap restructured their company to focus on solar leasing.
Some examples of Sunseap’s projects around Singapore. From left to right: HDB estate, Ng Teng Fong General Hospital, Singapore American School.
Unlike traditional solar business models in which solar installation requires high upfront costs, long term paybacks and coordination with multiple partners, the Sunseap Solar Leasing Model offers an integrated and simple solution to its customers. Under this new model, Sunseap installs solar panels on their customer’s rooftops and charge them only for the energy they use, at a rate competitive to their electricity retailer’s rate. As such, customers save money in a convenient way – they only need to sign a 20 year leasing agreement! The solar system, however, still belongs to Sunseap.
Given the high upfront costs of installing a solar system, the only way Sunseap can be sustainable and viable is by working with financial institutions. According to Mr Lee, “this is a 20-year model” and as such “you can’t run this business on ad-hoc financing”. Sunseap finances their initial investment through a long-term (low-interest) loan and with economies of scale, they are able to earn the revenue to cover the installment and maintenance costs of their systems. Furthermore, Sunseap recently obtained the Electricity Retail License from the Energy Market Authority (EMA) of Singapore. This license allows Sunseap to sell the surplus clean energy they generate to building owners who may not have a roof suitable for installation of solar panels.
One of the most striking takeaways from our meeting with Sunseap is their ambitious plan for future development and expansion; they aim to bring their production to 100 MW by the end of 2015 and double production every year thereafter. Prior to this meeting, we were under the impression that solar technology was too expensive and could not be brought to scale. However, our interview with Mr Lee taught us that with the right management and financial innovation, solar energy can be cost competitive.
This public perception that solar energy is not financially viable is another hurdle that Sunseap has been working to overcome, and the Government’s cooperation in installing solar on the roofs of HDB flats has been a catalyst in encouraging businesses and other organisations to adopt cleaner energy. We were inspired by the rapid growth and promising future of Sunseap, and we hope that it can serve as a model to bring solar energy to scale both regionally and worldwide.
Mr Lee also touched on the shifts in culture that Sunseap was trying to create. By leasing solar panels and taking the hassle out of solar energy, Sunseap endeavoured to encourage greater adoption of solar panels. This has been very successful. When we asked about Sunseap’s customer base, he replied that they were growing at very high rate, as their big projects have informed other customers, and many different corporations have approached them for their services. This massive increase in solar panel adoption, he hopes, will bring the awareness that solar is a viable option for everyone.
Furthermore, Sunseap has received considerable government support in terms of endorsement. The government agencies, namely HDB and MPA, have been the biggest lessor of solar panels. They create energy for the town councils and ports respectively. Interestingly, Mr Lee pointed out town councils have not used significantly less energy after the installation of solar panels, as this energy is routed to public utilities rather than individual residential use. Competition to consume less energy has not yet been created amongst residents of HDB flats due to the fact that solar has not been channeled for residential use. Thus, next steps may include creating this cultural shift by getting residents involved in energy use tracking.
However, the road to success has been, and continues to be challenging. One technological obstacle that faces Sunseap is the lack of viable energy storage technology. An efficient and cost-effective battery technology is critical to the adoption of solar technology, as it would allow solar systems to provide power at night. Furthermore, the dramatically lowered cost of solar technology has played an enormous role in Sunseap’s ability to provide affordable solar schemes. However, continually falling solar costs has led to late adoption of technologies, as customers will often choose to wait for even lower prices rather than buy immediately.
We were pleasantly surprised to find that our preconceived perceptions of solar energy were wrong. Solar energy is indeed affordable and can be harnessed in a country even as land scarce as Singapore. We need to stop waiting and start adopting solar technology. This would represent cost-savings to consumers, and could also create a cultural energy revolution which could change the energy landscape in Singapore. Sunseap is truly an environmental innovator, and we are excited to see how they can continue expanding their portfolio in Singapore and in the region.
So before you buy your next iPhone, think once more about what solar energy could do for you.