Investment in Southeast Asia’s solar revolution

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solar powerAcross the sun-drenched tropical expanse of Southeast Asia, solar power is increasingly gathering a polished appeal.

In the Philippines, lawmakers are passing renewable-friendly incentive schemes; Indonesia has more than doubled its solar panel project pipeline for 2013 from the previous year; and solar developers have taken a greater shine to Thailand, now being supported by the Asian Development Bank (ADB) for the development of three solar plants.

The renewable revolution has not squeaked its way into emerging Asia by chance. Prices for photovoltaic panels have dropped precipitously in past years as a result of technological advancement, bringing the once capital-intensive technology into reach of emerging economies and catalysing private interests.

“When we first started in 2009, you could get solar panels for about $3 per watt. The costs today are between four and six times as cheaper and efficiency has improved,” Omran Al Kuwari, CEO of GreenGulf, a Doha-based renewable energy company, recalled to Inside Investor.

Investors in energy from every spectrum of the business world have caught on to the trend, be they institutional or private individual, seeking out paths to make rosy returns on the cost-efficient source of electricity.

At the top of May 2013, REC Solar, a US-based renewable and solar electric system producer, secured the latest contract to supply Thailand with a power capacity of 72 mega watts through the construction of six solar plants. Already a visible player in Southeast Asia, REC currently operates 82 mega watts in the region.

A active renewable investor itself, Thailand is also searching for solar opportunities in the region, namely Green Earth Power, which said earlier in May that it will invest into as solar power plant in Myanmar, the country’s first and the world’s third largest installation.

The ADB has likewise strongly supported the development of solar energy in the region, leading by example in 2012 with the installation of $100 million worth of solar panels on the rooftop of its new headquarters in Mandaluyong, Manila with a capacity of 571 kilowatts.

Standing solidly behind its publically displayed investment, the ADB has since promoted pet projects, such as e-trikes in the Philippines, which the bank has identified as having high solar potential, especially in sunny towns and cities across the archipelago. Moreover, in April 2013, the ADB announced it would commit to lending $85 million to Solarco, a unit of Thailand’s second-biggest private power producer, Electricity Generating Public Corporation, to construct three solar plants. The 57 megawatts of projects will be constructed with a $52 million loan, while the other $33 million will be given to Solarco through the ADB Clean Technology Fund.

Indonesia, the world’s largest archipelago, has taken a strong government-led approach to obtaining their cache in the global solar industry. For 2013, the Indonesian government has earmarked $103 million for the development of 36 solar energy projects, which it plans to develop with private partners through BKPM, its investment arm. The proposed pipeline will make the total of active solar plants across Indonesia come to 153, up from 117 in 2012, back when the government spent $71.8 million investing in 17 new solar plants.

According to Alihudin Sitompul, the renewable energy director at the Ministry of Energy and Mineral Resources, the government is actively seeking partners to enter into joint ventures to develop the new solar plants due to financial and technical constraints.

In the Philippines, financial cooperation by governments and institutions have been coupled with green incentives schemes. Promised when the Aquino administration entered in 2010, the proposed feed-in tariff, a popular policy mechanism, for green technology has finally needled its way through the thick bureaucracy and is due by 2014. The policy will be applicable for all energies classified under the renewable bracket, such as solar, wind, geothermal and biomass.

Under the new incentives scheme, investors in renewable energy will be eligible for power-provider contracts offered above the market rate, measured per every kilowatt-hour sold.

With an appealing business climate on the horizon, the Philippine Solar Power Alliance (PSPA) has taken to targeting 6.12 megawatts of grid-tied solar rooftop installations in the country by end-2013. With an installed capacity of 1.12 megawatts of grid-tied solar rooftop installations throughout the country in 2012, the PSPA has continued to encourage consumers and the private sector to tap into the potential of solar energy.

While Indonesia began offering more incentives for the development of renewable technology in 2010, analysts before the country still lags behind along with the Philippines in terms of attracting the private sector to exploit the potential its geography possesses. For example, Indonesia has 40 per cent of the world’s identified geothermal potential.

Creaky bureaucracies are nothing new in Southeast Asia. The renewable sector will find natural inclusion into the region and investors will be able to cut through this given the current trend of support.

 

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Reading Time: 3 minutes

Across the sun-drenched tropical expanse of Southeast Asia, solar power is increasingly gathering a polished appeal.

Reading Time: 3 minutes

solar powerAcross the sun-drenched tropical expanse of Southeast Asia, solar power is increasingly gathering a polished appeal.

In the Philippines, lawmakers are passing renewable-friendly incentive schemes; Indonesia has more than doubled its solar panel project pipeline for 2013 from the previous year; and solar developers have taken a greater shine to Thailand, now being supported by the Asian Development Bank (ADB) for the development of three solar plants.

The renewable revolution has not squeaked its way into emerging Asia by chance. Prices for photovoltaic panels have dropped precipitously in past years as a result of technological advancement, bringing the once capital-intensive technology into reach of emerging economies and catalysing private interests.

“When we first started in 2009, you could get solar panels for about $3 per watt. The costs today are between four and six times as cheaper and efficiency has improved,” Omran Al Kuwari, CEO of GreenGulf, a Doha-based renewable energy company, recalled to Inside Investor.

Investors in energy from every spectrum of the business world have caught on to the trend, be they institutional or private individual, seeking out paths to make rosy returns on the cost-efficient source of electricity.

At the top of May 2013, REC Solar, a US-based renewable and solar electric system producer, secured the latest contract to supply Thailand with a power capacity of 72 mega watts through the construction of six solar plants. Already a visible player in Southeast Asia, REC currently operates 82 mega watts in the region.

A active renewable investor itself, Thailand is also searching for solar opportunities in the region, namely Green Earth Power, which said earlier in May that it will invest into as solar power plant in Myanmar, the country’s first and the world’s third largest installation.

The ADB has likewise strongly supported the development of solar energy in the region, leading by example in 2012 with the installation of $100 million worth of solar panels on the rooftop of its new headquarters in Mandaluyong, Manila with a capacity of 571 kilowatts.

Standing solidly behind its publically displayed investment, the ADB has since promoted pet projects, such as e-trikes in the Philippines, which the bank has identified as having high solar potential, especially in sunny towns and cities across the archipelago. Moreover, in April 2013, the ADB announced it would commit to lending $85 million to Solarco, a unit of Thailand’s second-biggest private power producer, Electricity Generating Public Corporation, to construct three solar plants. The 57 megawatts of projects will be constructed with a $52 million loan, while the other $33 million will be given to Solarco through the ADB Clean Technology Fund.

Indonesia, the world’s largest archipelago, has taken a strong government-led approach to obtaining their cache in the global solar industry. For 2013, the Indonesian government has earmarked $103 million for the development of 36 solar energy projects, which it plans to develop with private partners through BKPM, its investment arm. The proposed pipeline will make the total of active solar plants across Indonesia come to 153, up from 117 in 2012, back when the government spent $71.8 million investing in 17 new solar plants.

According to Alihudin Sitompul, the renewable energy director at the Ministry of Energy and Mineral Resources, the government is actively seeking partners to enter into joint ventures to develop the new solar plants due to financial and technical constraints.

In the Philippines, financial cooperation by governments and institutions have been coupled with green incentives schemes. Promised when the Aquino administration entered in 2010, the proposed feed-in tariff, a popular policy mechanism, for green technology has finally needled its way through the thick bureaucracy and is due by 2014. The policy will be applicable for all energies classified under the renewable bracket, such as solar, wind, geothermal and biomass.

Under the new incentives scheme, investors in renewable energy will be eligible for power-provider contracts offered above the market rate, measured per every kilowatt-hour sold.

With an appealing business climate on the horizon, the Philippine Solar Power Alliance (PSPA) has taken to targeting 6.12 megawatts of grid-tied solar rooftop installations in the country by end-2013. With an installed capacity of 1.12 megawatts of grid-tied solar rooftop installations throughout the country in 2012, the PSPA has continued to encourage consumers and the private sector to tap into the potential of solar energy.

While Indonesia began offering more incentives for the development of renewable technology in 2010, analysts before the country still lags behind along with the Philippines in terms of attracting the private sector to exploit the potential its geography possesses. For example, Indonesia has 40 per cent of the world’s identified geothermal potential.

Creaky bureaucracies are nothing new in Southeast Asia. The renewable sector will find natural inclusion into the region and investors will be able to cut through this given the current trend of support.

 

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