In sunny, equatorial Singapore, solar energy is the most promising source of clean energy – and businesses are looking upwards.
“In recent years, there have been more and more customers – in particular, smaller small and medium-sized enterprises (SMEs) – who are keen on adopting solar energy,” says Mr Albert Lim, founder and managing director of SolarGy.
SolarGy is a Singapore-headquartered solar technologies and solutions provider that has completed a slew of notable projects for clients such as Jewel Changi Airport, Resort World Sentosa and the National Gallery Singapore.
It is one of the partners of UOB’s solar financing programme U-Solar, which connects Asean businesses and homeowners with its solar company partners to help them transition to green energy and switch to solar power.
Mr Lim shares that SMEs face a range of challenges in their clean energy journey. “Most of the time, they simply weren’t sure where to begin. Many also had technical concerns such as how it would affect their operations, and whether installing solar panels would affect their buildings’ waterproofing warranty, and so on.”
According to UOB’s SME Outlook Study 2022, 43 per cent of SMEs cited insufficient knowledge as a major barrier to implementing sustainable practices such as a solar photovoltaic (PV) system – a set of electrical components that converts sunlight into electricity.
Other challenges include inadequate non-financial support such as training (39 per cent), and short-term impact on revenue (37 per cent).
Conducted from December last year to January, the study surveyed 800 local SMEs with revenue of less than $100 million to understand the business outlook and key expectations among SMEs in Singapore.
“To an SME, adopting solar energy is also an extremely heavy investment, and they would want to be more prudent with the decision,” Mr Lim says.
This is where the U-Solar programme bridges the gap. First launched in Malaysia in October 2019, U-Solar is now available in Singapore, Indonesia, and Thailand.
It is designed to help businesses and homeowners convert to clean energy at low to zero upfront costs. The programme’s solar partners will manage the installation process from start to finish, and provide maintenance at no added cost.
U-Solar goes beyond simply helping businesses and homeowners finance their shift towards using more sustainable energy, shares Mr Jasper Wong, managing director, head of Construction & Infrastructure at UOB.
“Instead of providing loans on a one-to-one basis, we want to bring together ecosystem players to create an end-to-end solution that connects businesses and consumers across the entire solar power value chain,” Mr Wong says.
He highlights three key objectives of the U-Solar programme, the first of which is to raise awareness to both businesses and homeowners on how they can achieve greater energy efficiency through the use of solar panels.
“This would translate to cost savings for them, given that electricity tariffs in Singapore are on the rise,” Mr Wong explains. In June, The Straits Times reported that the electricity tariff in Singapore rose eight per cent in the third quarter of 2022 compared to Q2 amid a global oil and gas crunch.
He adds: “UOB ensures that ecosystem partners under the programme are reputable companies that can help our end customers achieve at least 20 per cent energy savings.”
The second objective of U-Solar is to help its ecosystem partners – from developers and building owners, to solar solution providers – grow their businesses. The initiative has 17 partners across the four Southeast Asian markets where it operates.
“The programme creates value for our partners as well, because when they embark on cross-border projects, they can leverage on our ecosystem of resources to help them expand across the region,” Mr Wong says.
Lastly, U-Solar aims to simplify access to financing for end users. SolarGy’s Mr Lim shares that one common challenge faced by customers was the lack of access to a financing scheme that matches the payback period of a solar PV system.
“The payback period of a solar PV system is seven to 10 years. However, the hire purchase loans from banks typically have a payback period of three to five years, and are only based on the equipment cost,” Mr Lim explains.
The U-Solar programme for business owners can typically support up to 70 per cent of the total cost of installing a solar PV system, with a loan tenor of seven years. For SolarGy, a system that generates 100 kilowatt-peak of electricity starts from $120,000. However, for most businesses, the money saved from their electricity bills is sufficient to cover the monthly instalments, Mr Lim says.
“In this way, the solar system becomes self-financing, and the businesses enjoy a higher return on investment because they continue to enjoy energy savings after the payback period.”
About 60 per cent of local SMEs are prioritising sustainability in their business practices, according to the UOB SME Outlook Study 2022.
U-Solar is part of the UOB’s suite of sustainable financing solutions under the bank’s Smart City Sustainable Finance framework.
The two other programmes under the framework are U-Energy, which helps businesses and homeowners save on electricity bills and cut carbon emissions, and U-Drive, an integrated value chain solution for the electric vehicle ecosystem.
“The frameworks were designed to make it easier for UOB clients to tap on green financing,” says Mr Wong.
Should companies choose to undertake the development of the framework themselves, it would cost them about $20,000 to $30,000, and take between four to six months to complete.
“Leveraging UOB’s framework – which has been endorsed by the Monetary Authority of Singapore – will enable them to skip the entire step, and save a lot of money because this is provided to them at no additional cost,” Mr Wong says.
As of June, U-Solar has helped to reduce over 186,000 tonnes of greenhouse gas emissions, equivalent to more than 40,000 cars taken off the road for a year, according to UOB.
“It doesn’t stop here – UOB believes sustainability is an ongoing, iterative journey, and we are continuing to innovate to find new ways to help our clients to become even more sustainable in the future.”
The Future of Finance series explores how digital solutions and insights can empower individuals and businesses in a rapidly changing world, to create a more sustainable future.
This article was originally published on The Straits Times and was written by Kareyst Lin, Content STudio.
Source: The Straits Times © SPH Media Limited. Permission required for reproduction
