How 2041 Hours Of Sunshine Every Year Can Be Converted Into Singapore Dollars

Singapore’s location of being near the planet’s equator means that we have an abundance of sunshine. For the past 16 years, we have had an average of 2041 hours of sunshine every year – that works out to 5.6 hours of sunshine every day.

Singapore has historically had the greatest hours of sunshine in February and March before a weakening occurs the third-quarter of the year. The current hot weather, where temperatures had recently hit 36 degree celsius in Choa Chu Kang, is a timely reminder of this strong renewable energy asset.

Government’s push for solar energy adoption

Sunshine is a powerful source of renewable energy for Singapore to tap into. But, it is currently underutilised here: Today, less than 1% of Singapore’s power consumption comes from solar energy.

Fortunately, the government has plans to push solar energy’s contribution here to 20% by 2050. The cost of solar panels have been declining over the past few decades and this would help drive adoption of solar power.

One of the government’s initiatives for more widespread use of solar power is the SolarNova programme that was launched by the Economic Development Board (EDB) in 2014.

Under SolarNova, around 6,000 governmental buildings (such as schools, flats, army camps, utilities, and more) would have solar systems installed on them by 2020. In December 2015, the very first project awarded from SolarNova was won by Sunseap Leasing Pte Ltd.

Meanwhile, the Public Utilities Board (PUB) had launched a nine-month study back in November 2015 on the feasibility of installing solar panels at reservoirs and other facilities.

Industry involvement

It’s not just the public sector that is looking toward the sun. Last month, Singapore’s largest cleantech company, REC, had unveiled a S$250 million investment related to solar energy projects. S$200 million will go toward expanding REC’s solar panel factory in Tuas and S$50 million will be spent on a joint research project with the National University of Singapore’s Solar Energy Research Institute of Singapore.

There are also companies in Singapore’s stock market that are investing in renewable power capabilities.

For instance, Sembcorp Industries Limited (SGX: U96) had spent S$227 million early last year to acquire a 60% stake in Green Infra, an Indian solar and wind energy company.

Another example would be BBR Holdings (S) Ltd (SGX: KJ5). The company won one solar power leasing contract from the Housing Development Board back in 2014. The company’s latest update on the matter is that the project would have a final commissioning in the first-quarter of this year.

But, the solar energy business is still tiny for BBR – in 2015, solar leasing income was only S$118,000, a tiny fraction of the company’s total revenue of S$425 million in the same year.

A Fool’s take

The government’s push for Singapore to adopt solar power more widely may help drive growth in the solar industry here. It’d be interesting to see which are the companies that can win SolarNova contracts in the future – after all, there are 6,000 buildings waiting for panels to be installed.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Ong Kai Kiat does not own shares in any companies mentioned.