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Solar Energy in Singapore: Top 3 Financial Incentives

Explore our top 3 financial incentives to owning solar systems in Singapore!

Table Of Contents

In Singapore, various governmental bodies, including the Energy Market Authority (EMA), Building and Construction Authority (BCA), and Economic Development Board (EDB), offer incentives to promote solar adoption on our island. In this article, we will explore 3 major financial incentives for both residential and commercial solar panel systems.


1) Net Metering Schemes

Solar net metering in Singapore is a billing mechanism that credits owners of solar panel systems for the excess energy they generate. While Singapore doesn’t offer a full net metering scheme, consumers can choose to sell surplus solar electricity back to the grid by registering either with SP Services (SPS) or the Energy Market Company (EMC).

There are currently three main schemes:

a) Simplified Credit Treatment Scheme (SCT)

b) Enhanced Central Intermediary Scheme (ECIS)

c) Market Participant (MP) with the EMC

Now, let’s delve into the specifics of each plan. For a brief visual overview of these schemes, please consult the flowchart below.

solar financial incentives in the market for solar consumers
Source: Energy Market Authority – Guide to Solar PV

Simplified Credit Treatment (SCT) Scheme

  • Only applicable to residential solar panel installations
  • Only applicable to non-contestable consumers (buying from SP Services)
  • Applicable for solar panel systems with less than 1 MWac capacity

SCT compensates you for any surplus energy your solar panels generate at the prevailing tariff rates, deducting grid charges. Grid charges, also known as network costs, usually make up about 20-25% of your electricity tariff. This implies that SPS will reimburse you with approximately 75-80% of the electricity price for the energy you’ve generated. For instance, in Q3 2022, with the SP Group tariff at $0.3017 per kWh (before GST), solar homeowners under SP Group would receive $0.2423 per kWh for any excess solar energy injected into the grid.

For homeowners, solar installers can handle the registration for the SCT scheme on their behalf.

Enhanced Central Intermediary Scheme (ECIS)

  • Applicable to both residential and commercial solar installations
  • Applicable to contestable consumers (buying electricity from a retailer of your choice)
  • Applicable for solar panel systems with less than 10 MWac capacity

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 Enhanced Central Intermediary Scheme (ECIS).

Under ECIS, solar energy surplus will be compensated based on 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!

Typically, ECIS is slightly less profitable for long-term excess solar energy sales than the SCT scheme. If your rooftop solar generates much surplus energy, we recommend a switch to SPS for better grid tariff rates.

Likewise, homeowners can register for ECIS through their solar installer.

Market Participant (MP)

  • Only applicable to commercial solar panel installations
  • Applicable for solar panel systems with more than 10 MWac capacity

Companies with a solar capacity of 1 MWac or higher can opt to directly register with EMC as a Market Participant for electricity sales. In this setup, eligible companies receive payment based on nodal energy prices, determined by energy demand and supply from injection nodes across Singapore.

It’s essential to note that becoming a Market Participant involves substantial upfront costs, primarily suitable for energy companies with multiple assets. These fees comprise a non-refundable one-time registration fee of $5,400 and an annual fee of $10,800.

2) Renewable Energy Certificates (RECs)

  • Applicable to both residential and commercial solar installations

In Singapore, solar owners can also benefit from the sale of Renewable Energy Certificates (RECs), providing an additional financial incentive. RECs are tradable assets representing green electricity generated from renewable sources, allowing solar energy producers in Singapore to derive value from their solar panels. Each REC corresponds to 1MWh of electricity produced by their solar panels.

Corporations without their own solar installations can use RECs to offset their carbon emissions and access sustainable energy sources. By purchasing RECs, these companies gain certified access to solar energy generated by solar producers, facilitating a win-win arrangement. It aids companies in achieving their carbon reduction goals while providing financial support to solar energy producers for maintaining their systems.

Click here for our detailed article on RECs!

Monetising RECs, however, can be a complex process. If you’re interested in buying or selling RECs, don’t hesitate to contact us. At Solar AI Technologies, our experts are ready to assist you in navigating this intricate process and ensuring financial incentives are achieved.

3) Financial Incentives for Energy Efficiency in Singapore

Green Mark Incentive Scheme for Existing Buildings (GMIS-EB 2.0)

  • Available for commercial to residential building types which meet the criteria
  • Available till the available funds have been fully committed or by 31 March 2027 (whichever is earlier)

In March 2021, Singapore unveiled the Singapore Green Building Masterplan (SGBMP) to enhance building sustainability and energy efficiency. As part of this, the Building and Construction Authority (BCA) introduced GMIS-EB 2.0 on June 30, 2022. GMIS-EB 2.0 aims to improve the energy performance of existing buildings and accelerate the transformation of 80% of Singapore’s buildings into green, energy-efficient structures by 2030.

The GMIS-EB 2.0 scheme offers substantial financial incentives of up to $1.2 million or 50% of qualifying costs, prioritising buildings meeting high energy performance standards. GMIS-EB 2.0 encourages energy-efficient retrofits and is open to buildings with a minimum Gross Floor Area (GFA) of 5,000 square meters. Eligible building types include commercial, industrial, and residential, with specific criteria for light industrial buildings based on Singapore Standard Industrial Classification (SSIC) codes. This initiative aligns with Singapore’s commitment to sustainability and energy efficiency, contributing to a greener built environment.

You can read more about GMIS-EB 2.0 in further detail here.

Conclusion

In conclusion, Singapore offers a range of financial incentives to encourage solar adoption and enhance energy efficiency in its buildings. We urge homeowners to explore the possibilities of solar panel systems and leverage these financial incentives not only to reduce energy costs but also to contribute to a more sustainable future. Embracing solar energy is not just an investment in your property; it’s an investment in a cleaner, greener Singapore.

At Solar AI, we have an innovative approach for homeowners to adopt solar. With our 10-year rent-to-own solar program, there are 0 upfront costs and instant savings. Join us in this sustainable journey, reduce your energy bills, and contribute to a greener future for Singapore.

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Solar AI Technologies
Solar AI Technologies
At Solar AI, we combine geospatial data and artificial intelligence to provide home and property owners with the tools and knowledge to get solar as easily as possible. Our mission is to use technology to simplify the solar experience for everyone.
Solar AI Technologies
Solar AI Technologies
At Solar AI, we combine geospatial data and artificial intelligence to provide home and property owners with the tools and knowledge to get solar as easily as possible. Our mission is to use technology to simplify the solar experience for everyone.
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