Motivations for Deploying Solar
Reasons for deploying solar energy include reducing carbon emissions, meeting corporate sustainability goals, being part of a green building development, financial savings by leveraging on solar energy’s cost-competitiveness, and making use of otherwise under-utilised roof spaces.
“We recognise the importance of sustainability and the need for us to drive positive changes for the environment and community. SIAEC started our sustainability journey a few years ago and we have since installed solar panels across all our hangars to generate renewable energy. The adoption of solar energy reduces our exposure to volatility in electricity pricing. Today, we are seeing energy cost savings of 18%, thanks to solar power alone.”
– Mr Foo Kean Shuh, Senior Vice President Corporate Planning, Fleet Management & Commercial, SIA Engineering Company –
Solar Leasing: A preferred approach
The most common deployment approach is via solar leasing, whereby the company leases its space to a solar vendor that will install, own and operate the solar panels. The company can choose to buy all or part of the solar energy generated.
Advantages of Solar Leasing
The advantages of a solar leasing model are that there are no upfront capital costs for the company, the cost of electricity is lower than buying from the electricity retailers, energy pricing can be negotiated and fixed over the long term with the solar vendor, the vendor takes on the operating costs and risks for the solar PV systems, and this can enhance the value of the facilities. The process for solar leasing, which could take about 2 years between agreement and actual implementation, is fairly seamless post-contractual negotiations as the installation and other works are done by the appointed vendor.
Companies on a solar leasing model can choose between paying a cost-effective fixed tariff or a floating tariff pegged at a discount against the prevailing national regulated rate. In this way, companies are assured of reaping savings throughout the contractual term. The absolute savings would depend on the contribution of solar to the company’s overall energy consumption, commercial terms agreed with the solar vendor, as well as the prevailing market tariff rates. One company reported that it saw 20% savings in its energy expenditure.
Overcoming Implementation Challenges
- An implementation challenge highlighted by companies was the need for additional upfront investment and space requirements if batteries were to be installed to store electricity for on-site usage during evening hours. This applies to both company-owned and solar leasing models. Without battery storage, surplus solar energy generated in the daytime can instead be sold to the grid.
- Another highlighted issue was that tests had to be done to ensure rooftop solar panels did not interfere with radar and navigation systems, or cause reflective glare for pilots. The context of this safety concern was that many of the aerospace companies were located near the airports.