Searching for ways to save money on utility bills? Want to be part of the global movement towards renewable energy? If you’re looking for a sure-fire way to cut monthly household expenditure, solar is the way to go. In the past few years, the price of solar panels in Singapore has fallen significantly and there has been no better time to start. Hesitate no longer! Here’re some of the top financial benefits that you can enjoy when you choose solar energy in Singapore.
Solar Panel Financial Incentives in Singapore
Financial Schemes
Make money with your solar set up! Did you know that there are currently several financial schemes in Singapore that allow you to sell excess solar you have generated back to the grid? The Energy Market Authority (EMA) has set up several different schemes that allow you to benefit from switching to solar. Two prominent residential schemes are the Simplified Credit Treatment (SCT) scheme and the Enhanced Central Intermediary Scheme (ECIS). The scheme that you’ll qualify for will depend on your current electricity service provider.
Simplified Credit Treatment (SCT) Scheme
Households that use SP Services (SPS) will be eligible for the SCT scheme. If you use a different electricity provider under the Open Electricity Market (OEM), you’ll qualify for the ECIS. Under the SCT scheme, you’d be paid for any excess energy generated by your solar panels at prevailing tariff rates minus grid charges. Since grid charges are around 25% of electricity tariffs, this means that you can sell excess solar back at about 75-80% of SP Group’s electricity tariff rate. In Q3 2022, with an SP Group tariff of 30.17 cents/kWh (before GST), you’ll be able to sell excess solar to the grid at 24.23 cents/kWh! This will be credited to you through rebates on your electricity bills.
Enhanced Central Intermediary Scheme (ECIS)
With the ECIS, SPS will act as an intermediary in handling the purchase of excess electricity generated by your solar panels. How much you earn will then depend on the half-hourly wholesale energy prices in Singapore (also called USEP for Uniform Singapore Energy Price). These prices fluctuate greatly and can change ten-fold within a month, but generally are expected to be lower than SP Group’s rates in the long run. You can find USEP price information on the Energy Market Company (EMC)’s website.
Editor’s note [14 February 2022]: in the past few months up till the time of writing in February 2022, wholesale energy market prices in Singapore have been extremely volatile, at an average of 43.80 cents/kWh between Oct to Dec 2021 and hitting peaks of 449.91 cents/kWh. While this means solar homeowners who are being compensated at USEP prices for excess solar is getting a windfall, the choice between selecting SCT and ECIS schemes should be carefully considered.
This means that if you’re generating a significant amount of excess solar energy and selling it back to the grid, you may earn more if you switch to SPS. This depends on 3 factors: (i) your monthly energy consumption, (ii) your daytime energy consumption, and (iii) the size of your solar installation. Reach out to us and we’ll be glad to give you more advice on this!
Renewable Energy Certificates (RECs)
RECs are another great way for you to enjoy the financial benefits of the solar energy generated by your system in Singapore. RECs are tradable renewable energy attributes that represent the amount of electricity generated by your solar setup. One REC is equivalent to 1MWh of electricity produced by your solar panels.
A typical 10kWp residential solar system will generate 12.5MWh of clean electricity in a year, which equates to 12.5 RECs. While the prices of RECs fluctuate, RECs may be able to fetch up to $30 in the market which means an extra $375 in financial benefits from your solar every year.
Unfortunately, selling RECs at this point may be a bit complicated as the REC market is not yet matured. To start selling RECs, property owners will first have to register their solar installation as a recognised solar generation source. Thereafter, a manual application will be required to report the solar energy generated and issue the certificates on a periodic basis. Interested to explore this option? Visit SP Group or local startup, T-RECs.ai, to find out more.
Pay Zero Upfront with Solar Loans
Incur no upfront costs. Installing solar panels in Singapore has never been more affordable, and with newly launched solar loans you won’t even need to bear any initial costs. There are currently two solar loan options in Singapore with more likely to come in the future.
The OCBC Solar Panel Loan allows you to take a loan of up to $30,000 with a loan tenure of up to 5 years to finance your solar installation. The loan program features an unchanging yearly interest rate of 2.09% per annum, with a flexible repayment period. The UOB U-Solar Programme, on the other hand, includes benefits such as a three-year interest-free loan repayment period and attractive promotions with their solar partners. These loans support you in making the switch to solar without having to dig deep into your savings!
However, do check in with your selected solar installers to ensure that these programs do not come with any hidden fees. Some financing providers may charge solar installers a mark-up in order to finance loans at zero interest rates, so watch out for that!
Note that these loan programs are also subject to some terms and conditions – these may vary from additional fees like an admin charge and cancellation or prepayment fees, or having to pay for the solar loans through bank credit cards.
Long Warranty Durations and Low Maintenance Costs
Solar replacement warranty durations are long and maintenance costs are reasonable. Solar panels in Singapore usually come with a 20-year to 25-year warranty, with their inverters often having a 5-year to 12-year warranty. These warranties cover the replacement of equipment for physical defects in your solar system for a majority of your solar panels’ lifespan. What’s more, many solar providers also provide packages that cover maintenance fees for a considerable period! Furthermore, rooftop solar panels are built to be weather-proof and rarely require maintenance. Solar panels are also installed at an angle so that they can be “self-cleaning” when it rains.
Even when you’ll need to pay for maintenance and cleaning fees for your home solar system, they are generally affordable. Pay as little as $200, for your solar installer to clean your solar panels and check that your inverters and breakers are fully functional. For your added convenience, almost all solar installers also provide accompanying online monitoring tools or mobile apps for you to track your solar system’s performance. Look out for installers that provide long equipment and maintenance warranty periods along with good tracking technology for the greatest savings!
Pick the Solar Panel that Fits your Budget in Singapore
The budget that you set aside for solar panels in Singapore is highly customisable. Let’s look at solar panels and the various options available in the market. There are three main types of solar panels in Singapore: monocrystalline, polycrystalline and thin-film. These solar panels are separable by several characteristics. Monocrystalline panels are the most popular in Singapore. Despite slightly higher costs, they have the highest efficiency and durability under high temperatures — perfect for Singapore’s weather. That said, you might also want to consider other characteristics like the brand, affordability or the aesthetics of the different panels. Most solar installers in Singapore carry different brands and types of solar panels. Don’t hesitate to share your preferences with them!
Be Rewarded for Commitment
The longer you commit the more you earn! Solar is a long-term commitment that can generate cost savings for you for 20-30 years. With many new financial schemes and great advancements in solar technology, solar is now affordable and reasonable. The average breakeven period for residential solar panel setups in Singapore is only between 6 to 8 years. However, as with most technology and hardware, you’ll have to be prepared to spend some money on your home solar system.
If you’re in for the long haul, utility savings over 25 years can be upwards of $50,000 for an average 10kWp system. What’s more, with a quality solar system, maintenance will also be infrequent and are reasonably priced when needed. Most importantly, your home will eventually rely on a renewable and clean source of energy and you’ll be doing your part in making the world that much greener!
This article was first published on 3 May 2021 and last updated on 10 August 2022 to include additional details.
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