Singapore startup seeks to shed light on solar affordability

Solar AI Technologies is looking to promote the installation of solar panels in households in Singapore, where renewable energy adoption remains low. The local startup believes its “rent-to-own” service can address the key factors behind low consumption, such as hefty upfront costs and a lack of confidence that renewable energy can be used. generation can be an alternative energy source.

Solar AI’s rent-to-own model allows homeowners to pay a monthly fee to harness solar energy without any upfront costs to install or maintain the panels. According to Bolong Chew, co-founder of Solar AI, by absorbing the costs required to deploy and maintain the system, the startup hopes to address the top barrier keeping adoption low in Singapore. .

Founded at the start of the pandemic in early 2020, the local startup was incubated and incubated by French energy conglomerate, Engie. Chew was a resident of Engie before leaving the corporation to found Solar AI.

The startup is aiming to convert 5,000 properties across Southeast Asia to solar by 2025, with plans to expand into the Philippines and Malaysia markets in the future. The former solar system offers significant potential as local electricity prices are the same or higher than Singapore, but with lower manpower costs, solar systems can be installed in the Philippines with 20% to 30% lower cost.

Chew hopes to “go barefoot” in the Philippines by 2024, followed by Malaysia in 2025. For now, however, Solar AI is focusing on expanding its base in Singapore, where it will look to build. build processes and strengthen its capabilities before embarking on its regional expansion plan, he told ZDNET.

So far, the company has had 28 registered residents, including 12 customers who have signed up for a 10-year lease to own the company. The remaining 16 customers are in the 5-year plan. The average customer pays SG$250 a month and saves SG$300 to SG$350 monthly on electricity.

With the majority of Singapore’s population, or about 80%, living in public housing apartments government agency HDBSolar AI’s target customer group mainly includes owners of land-based private properties as well as commercial properties.

HDB has its own renewable energy initiatives, announcing in 2019 a target of 540 MWp by 2030 as it hopes to generate 648 GWh (gigawatt-peak) of solar energy per year. This is part of the national target of 1.5 GWP by 2025 and 2 GWp by 2030, among other targets outlined in Singapore Green Plan.

HDB in February of this year revealed plans to match 8,400 blocks of HDB apartments using solar energy energy, with the installation of solar photovoltaic (PV) systems scheduled for completion in the third quarter of 2025. Of the 8,400 targeted HDB blocks, solar panels have been installed on the roof of the house. 2,700 apartment buildings, the rest will be rolled out gradually in the next 2-3 years, according to HDB.

Beliefs, awareness needed to promote the use of solar energy

Such initiatives will help foster confidence and awareness that solar energy can be a viable energy source, which Chew believes is still lacking in Singapore.

He notes that the cost of ownership has dropped significantly by 89% over the past decade, but solar energy consumption remains low due to a general lack of confidence that it can serve as a worthwhile alternative. trust. Furthermore, the cost savings can take several years to materialize, leaving few homeowners willing to invest in a system where they also know little about maintenance requirements.

According to Solar AI, it costs the average homeowner S$20,000 to install a rooftop solar system and more than S$150,000 for a commercial property owner.

And while solar panels have a lifespan of up to 25 years, providing a long-term investment for owners, most are still hesitant to fork out the upfront capital required to install a system that only pays off. breakeven point after 5 to 8 years.

“The perceived risk of solar is high,” he said, adding that this has prompted Solar AI to offer rent-to-own, offering a zero upfront cost option. while eliminating the need to maintain the homeowner’s system.

A portion of the customer’s recurring monthly bill is charged to the startup’s revenue.

Chew wants to reach a customer base of 500 already occupied homes next year, as well as become the company’s commercial customers.

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