Tag: asian power

16
Jan

Southeast Asia’s solar industry thrives despite market expectations

The solar explosion may be diminishing in some countries, but definitely not in Southeast Asia.

When forecasters noticed slower solar PV installations worldwide in 2017, when developed markets neared saturation, it put investors under loads of stress to determine whether Southeast Asia would be the next fountain of solar growth. Analysts can speculate the potential of this region of approximately 600 million people, especially as governments and developers have started to understand the strict regulations, outdated technology and poor infrastructure that has been diminishing the investment in the Southeast Asian solar projects. But the sheer amount of work to be done puts the region a long way off from reaching a solar renaissance.

“As renewables markets mature, renewables investors are looking to new markets for their next source of growth. Solar PV generation has great potential and has been the most attractive renewable energy source amongst the Southeast Asian nations,” said Eric Ho, director at Renewable Energie Singapore. “Growth prospects are tremendous in Southeast Asia with a combination of fast-growing economies with resulting investment in manufacturing, transportation and energy infrastructure, rapid growth in electricity demand and good solar resource,” he further stated, noting that annual solar radiation levels in the region ranges from 1,460 to 1,900 kWh/m2 per year.

Asian Power: Southeast Asia's solar industry thrives despite market expectations

Asian Power: Southeast Asia’s solar industry thrives despite market expectations

Feed in Tariff to expand and Thailand to be the role model

Feed-in tariff (FiT) schemes have been helpful to the solar PV growth in Southeast Asia. In Thailand, which is by far the largest producer of solar energy in the region as there is strong government support, solar capacity has increased in the past three years, from 1,299MW in 2014, and 2,021MW in 2015, to over 2,800MW in 2016, which is higher than those of all other Southeast Asian countries combined. Thailand is not looking to slow down its solar PV expansion anytime soon. They have a target to have installed 6,000MW by 2036. The country is also becoming a regional role model for Southeast Asian nations that are starting to scale up their programs.

“Because of Thailand’s experience with large solar farms and its promoting policies, it forms a hub for PV testing services and a source for information. Solar energy projects are offered the highest feed-in tariff (FiT) subsidies,” said Ho. “In the past years, several FiT programs for smaller solar energy projects were created with very attractive rates. By giving the highest FiTs to the smallest producers, the government aimed to promote green energy communities and small-scale rooftop programs.”

Investors are also heading over to the Philippines, which, since the launch of the FiT program a few years ago, had no solar industry. The fast pace of Solar expansion in the Philippines, made them one of the the top 10 markets in the world. “The FiT program drove solar PV development in the Philippines into high gear,” Ho noted. “Solar PV is expected to reach 3 GW of utility solar by 2022.”

Dave Maslin, country manager for OWL Energy, believed that the FiT process generated investor interest when it was first shown but it was far from perfect. It was believed that the process had problems with transparency and guidance. “After securing a service contract and Department of Energy (DOE) approval on its commerciality, the project developers were caught in a limbo: It had no obligation to proceed but had the go-signal to begin construction.”

Solar in Southeast Asia, Thailand in particular, is thriving. In order for you to jump on the band wagon, get in contact with us and we’ll help you to get set up.

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