In Singapore, several governmental bodies provide schemes and incentives to help promote the adoption of solar in our island city. They are the Energy Market Authority (EMA), Building and Construction Authority (BCA) and Economic Development Board (EDB). Planning to install a home solar setup or a solar panel system on the rooftop of a commercial and industrial (C&I) building that you own? Here’s a look at some of the top financial incentives for solar in Singapore!
1) Metering Credit Schemes
Solar net metering is a type of billing mechanism that credits solar panel system owners for the excess energy generated by their system. Singapore doesn’t provide a full net metering scheme. That said, consumers can sell excess solar electricity back to the grid by registering with SP Services (SPS) or with the Energy Market Company (EMC).
If you’re currently buying electricity from SPS, you’re a non-contestable consumer and the Simplified Credit Treatment Scheme (SCT) will be applicable to you.
However, if you’re buying electricity from any other electricity retailer — for example, through the Open Electricity Market or directly from the wholesale electricity market — you’ll be a contestable consumer. You’ll then be able to go for the Enhanced Central Intermediary Scheme (ECIS) or register as a Market Participant (MP) with EMC.
Simplified Credit Treatment (SCT) Scheme
*Applicable to residential solar panel installations only
Households that are non-contestable (under SP Group) who own a solar panel system qualify for the SCT scheme.
With SCT, any excess energy generated by your solar panels will be paid to you at the prevailing tariff rates, minus grid charges. Grid charges (also referred to as network costs) are often around 20-25% of your electricity tariff. This means that SPS will pay you 75-80% of the electricity price for the energy you’ve generated through rebates on your monthly electricity bill. For example, in Q3 2022 with SP Group tariff at $0.3017kWh (before GST), solar homeowners under SP Group will be paid $0.2423/kWh for any excess solar energy injected into the grid.
For residential solar panel systems, your solar installer will be able to register for the SCT scheme on your behalf, as part of the solar PV registration and submission process to SP Group during the installation.
Enhanced Central Intermediary Scheme (ECIS)
*Applicable to residential and C&I solar panel installations
If you’re a contestable consumer with a solar panel system that has a solar capacity of less than 10 MWac — which should be the vast majority of solar projects — you’ll qualify for the ECIS.
Under the ECIS, excess energy generated by your solar panel system will be paid to you at prevailing half-hourly wholesale energy prices. It’s important to note that wholesale electricity prices can fluctuate based on demand and supply. In the first half of 2022, half-hourly prices ranged from a high of $4.2493/kWh to a low of $0.0876/kWh!
In general however, selling excess solar energy via ECIS in the long term is expected to be slightly less profitable than under the SCT scheme. Does your rooftop solar generate a lot more solar energy than you consume? We’d recommend switching to SPS to benefit from selling solar energy back to the grid at a higher tariff rate.
Similarly, the registration for ECIS can be done through your solar installer.
Market Participant (MP)
*Only applicable to commercial solar panel installations
Companies with a solar capacity above or equal to 1 MWac can also choose to register directly with EMC as a Market Participant to sell electricity. In this scheme, qualifying companies will be paid at the nodal energy price received by energy generators. Nodal prices are determined by the demand and supply of energy from the electricity network of injection nodes across Singapore.
Note that however becoming a Market Participant requires significant upfront fees, and is typically only suitable for energy companies with multiple assets. Fees include a non-refundable, one-off registration fee of $5,350 as well as an annual fee of $10,700.
2) Renewable Energy Certificates (RECs)
*Applicable to residential and C&I solar panel installations
One of the other financial incentives that solar owners in Singapore can enjoy is the sale of Renewable Energy Certificates (RECs). RECs are tradable assets that represent green electricity generated by renewable energy sources. RECs enable solar energy generators in Singapore to monetise their solar panel systems. One REC is equivalent to 1MWh of electricity produced by your solar panels.
RECs allow corporations that don’t own solar panel systems to offset their carbon emissions and access green energy sources. They do so by purchasing RECs that come with a certified right to solar energy produced by solar energy generators. This creates an ideal win-win situation for both parties. Buying RECs help corporations meet their carbon targets while providing solar energy generators with funding to upkeep their solar panel systems.
However, the process of monetizing RECs can be lengthy and troublesome. To get started with buying or selling RECs, reach out to us and let us assist you.
3) Solar Financial Incentives for Energy Efficiency in Singapore
*Only applicable to C&I solar panel installations
Energy-efficient technologies are ones that use less energy to perform a task by eliminating energy waste. They are the cheapest and fastest way to reduce our reliance on traditional fossil fuels. Recent financial incentives by BCA and EDB aim to boost energy efficiency in Singapore with the use of energy-efficient technologies like solar.
Green Mark Incentive Scheme for Existing Buildings (GMIS-EB 2.0)
Update: GMIS-EB’s funds have been fully committed and is no longer available. Hence, this section has been updated with details of GMIS-EB 2.0, in place of GMIS-EB, on 7th June 2022.
Targeting private building owners and developers of commercial and institutional developments, light industrial buildings and residential buildings, the GMIS-EB 2.0 by BCA provides up to $1.2 million in subsidies, or 50% of your qualifying cost, whichever is lower.
This qualifying cost is determined by the number of tons of CO2 your retrofit saves, multiplied by a fixed cost that increases with a better green mark standard. With $63 million worth of funds, this scheme seeks to promote retrofitting and improvement of existing buildings with energy-efficient resources.
To qualify for the scheme, existing buildings need to first satisfy a few pre-requisites. These include the attainment of a BCA Green Mark rating and at least 5,000 square meters of gross floor area. This scheme is applicable for hotels, office buildings, shopping malls and other energy concentrated buildings.
You can read more about GMIS-EB 2.0 here.
Green Mark Incentive Scheme for New Buildings (GMIS-NB)
Update: As of 7th June 2022, the funds for GMIS-NB have been fully committed.
BCA also launched a similar scheme for new buildings. The enhanced $20 million GMIS-NB is 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 introduction of energy-efficient technologies and environmentally-friendly building design practices.
The amount of cash incentive provided depends on the BCA Green Mark rating that the individual has received.
To find out more about government grants and incentives for commercial property owners, jump to our article on “Government Grants and Subsidies for Businesses to Go Green”.
Other Considerations
*Only applicable to C&I solar panel installations
In 2019, the government introduced the Carbon Tax. The aim of the tax was to reduce greenhouse gas emissions and to control the carbon levels in our environment. This has motivated many businesses to limit their carbon emissions to avoid added taxation. Many have chosen to switch to energy-efficient technologies like solar.
Want to reduce carbon emissions, save our environment and opt for a cost-efficient renewable energy option? Make the switch to solar today!
This article was first published on 6 October 2020 and last updated on 12 August 2022 to include additional details.
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