Financial Incentives for Solar in Singapore

With increasing emphasis on clean and renewable energy in Singapore, having financial incentives to help manage your budget is crucial in the decision making process of jumping into the environmentally friendly, green side of energy.
financial incentives for solar in singapore

This article was first published on 6 October 2020 and last updated on 12 February 2021 to include additional details.

In Singapore, we currently have three main governmental organisations that are providing several schemes and incentives to help lessen the financial burden of engaging in solar – the Energy Market Authority (EMA), Building and Construction Authority (BCA) and Economic Development Board (EDB). 

These incentives and schemes can be broken down into two main categories: metering credit schemes and financial incentives for energy efficiency. Let’s take a look at them now! 

Metering Credit Schemes: 

Solar net metering is a type of billing mechanism that credits solar system owners with the excess solar energy which is generated and added into the grid. While Singapore does not provide a full net metering scheme, consumers can sell excess solar electricity back to the grid by registering with SP Services or with the Energy Market Company. 

Firstly, you will need to figure out if you are a Contestable Consumer or a Non-Contestable Consumer. If you are currently buying electricity from SP Services, you are considered a Non-Contestable Consumer, and the Simplified Credit Treatment Scheme (SCT) will be applicable to you.

However, if you are currently buying electricity from any other electricity retailers (for example, through the Open Electricity Market), or directly from the wholesale electricity market, you will be considered a Contestable Consumer. In this case, dependent on the size of your solar system, you can either register for the Enhanced Central Intermediary Scheme (ECIS) or register as a Market Participant (MP) with the Energy Market Company.

Source: Energy Market Authority – Guide to Solar PV

Simplified Credit Treatment Scheme (SCT) 

Non-Contestable Consumers who have a solar capacity of less than 1 megawatt, alternating current (MWac) qualifies for the SCT scheme. To simplify: as long as you are currently buying electricity from SP Services, and are either a homeowner or have a roof space of below 5,000 sqm, you most likely qualify for this scheme.

Under this scheme, any excess energy which is generated from your solar panels will be paid to you at the prevailing tariff rates, minus grid charges. With grid charges (also referred to as network costs) often around 25% of your electricity tariff, SP Services essentially pays you 75% of the electricity price for the energy you have generated, through rebates on your monthly electricity bill.

Your solar installer will be able to register for the SCT scheme on your behalf. Alternatively, businesses will also be able to submit the application form through SP Services’ e-Business portal directly. 

Enhanced Central Intermediary Scheme (ECIS)

If you are a Contestable Consumer with a solar capacity below 10 MWac (which should be the vast majority of solar projects), you can qualify for the ECIS to sell excess solar energy to the market.

Under the ECIS, the excess energy generated from your solar system will be paid to you at prevailing half-hourly wholesale energy prices. It is important to note that wholesale electricity prices can vary significantly based on the demand and supply in the market. In the month of February 2019, it was reported that half-hourly prices ranged from a high of 155.82 cents/kWh and a low of 14.32 cents/kWh.

However, in general, selling excess solar energy under the ECIS is expected to be less profitable than under the SCT scheme. If your rooftop solar can generate a lot more solar energy than you can consume, your solar installers may also recommend you to switch to SP Services to benefit from a higher tariff rate of selling solar energy back into the grid.

Similar to the SCT scheme, consumers who would like to register for ECIS can either do so through their solar installers, or directly through SP Services.

Registration as a Market Participant

Companies with solar capacity above or equal to 1 MWac can also choose to register directly with the Energy Market Company as a Market Participant and a Generation Facility to sell electricity. In this scheme, qualifying companies will be paid at the nodal energy price received by energy generators. Nodal prices are determined based on demand and supply of energy from the electricity network of injection nodes across Singapore. 

Renewable Energy Certificates (RECs)

Apart from selling excess solar electricity generated back into the grid, solar owners in Singapore can also receive financial benefits by selling  Renewable Energy Certificates (RECs) from their solar assets.

Renewable energy certificates, or RECs in short, are tradable assets which represent green electricity that is generated by renewable energy sources. Similar to the concept of carbon emissions trading, RECs allow companies to purchase certificates to offset their carbon emissions and access green energy sources, often to meet their carbon targets.

Companies in Singapore are able to monetize their renewable energy certificates from their solar PV systems through SP Group’s digital REC platform, or with local startup T-RECs.ai.

Financial Incentives for Energy Efficiency: 

Energy efficient technologies refer to technologies that use less energy to perform a task, compared to other forms of technology. By doing so, energy waste is being eliminated. Using energy efficient technology is the cheapest and fastest way to reduce the use of fossil fuels. 

The Building and Construction Authority (BCA) and Economic Development Board (EDB) are looking to encourage the use of energy efficient technologies in Singapore, to create huge opportunities for energy efficiency improvements in our economy. 

$100 million Green Mark Incentive Scheme for Existing Buildings (GMIS-EB)

Targeting private building owners and developers of existing non-residential buildings, the GMIS-EB by the Building and Construction Authority (BCA), is providing a 35% co-funding cash incentive limited to $1.5 million. This scheme seeks to promote retrofitting and improving existing buildings with energy efficient resources, with significant outcomes after upgradation. The existing buildings will be subjected to approval, and requires central air-conditioning and at least 2,000 square meters of gross floor area. Hotels, office buildings, shopping malls and other energy concentrated buildings are suitable for this scheme. 

Enhanced $20 million Green Mark Incentive Scheme for New Buildings (GMIS-NB)

The BCA has also launched the GMIS-NB, specifically for building owners, developers and project specialists who have at least a BCA Green Mark Gold rating. This scheme provides cash incentives to these individuals to speed up the process of introducing energy efficient technologies and building design practices that are environmentally friendly. The amount of cash incentive provided is dependent on the BCA Green Mark rating that the individual has received. Do note that this scheme is only applicable for new buildings.

Other considerations

In 2019, the government has introduced the Carbon Tax as a form of mitigation to reduce greenhouse gas emissions and control the carbon levels in our environment. With the implementation of the Carbon Tax, businesses are forced to reconsider their carbon emissions by choosing to switch to energy efficient technologies or pay the carbon tax.

Do consider these financial incentives if you are looking to reduce carbon emissions and save our environment!

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Cheyenne Njoo
Cheyenne Njoo
Cheyenne is the Content and Product Marketing Intern of Solar AI Technologies. Majoring in the nitty-gritty of Communications and New Media in NUS, she loves sipping on tea while indulging in the world of content creation. In Solar AI, she aims to combat and spread awareness about climate change one *tiny* step at a time. (small feet problems)
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