Plus Solar Systems, a specialist in solar power solutions, is upbeat about its green energy business with the prices of solar panels falling and more factories looking at cutting down energy costs. DAVID TAN reports.
SOLAR energy consultancy, Plus Solar Systems, expects its business to grow by 20% this year, as more commercial premises turn to the power of the sun to reduce the cost of doing business.
Executive director Ko Chuan Zhen says the company is confident about growth due to new market penetration in states like Penang and Johor. There, large manufacturing concerns are seeking to cut operational costs.
“With footprints in these states, we expect our market share to exceed 15% by the end of the year, compared to less than 15% currently,” he says.
A commercial premise can save 10% to 70% of their operation cost by turning to solar power, depending on the size of the roof area and power consumption, according to Ko.
“If the operation is sizeable, with a roof area of about 38,000sq ft, the savings could go up to 70% of the operational budget.
“Depending on the size of the premises, the savings could be between 30 sen and 50 sen per kilowatt (KW) hour,” says Ko.
A roof area of between 8,000sq ft to 38,000 sq ft requires around RM500,000 to RM2.5mil in investment to fit in solar panels.
“Based on the savings of 30 sen and 50 sen, such a company could recover its investments in six to seven years,” Ko adds.
Up to the end of 2015, Solar Plus had in total installed solar panels with a combined capacity of 27 megawatt peak (MWp).
“This is equivalent to the daily energy usage of 5,400 houses.
“About 80% of our projects are from the commercial sector, including solar farms, industrial properties and commercial buildings with Green Building Index (GBI) certificates. Some 20% of our projects are from the residential segment,” he says.
According to Ko, the demand for solar power comes mainly from the Klang Valley, Johor, Penang, and Kedah.
“The residents in these areas are more willing to invest in new, cost-saving technologies. These are also areas with the most manufacturing facilities requiring high energy consumption,” Ko adds.
The price of solar cells has dropped by over 85% worldwide since 2008, due to the injection of fresh capital to boost capacity to meet rising demands, he points out.
“The increased in solar cell production capacity has led to prices decreasing by about 20% annually. The Asia Pacific region is now a strong emerging market for solar power, as large manufacturing companies are adopting solar energy to drive down substantial operational cost,” he adds.
Ko says the biggest challenge for Plus Solar is creating awareness among factory operators regarding the incentives that could be obtained from the Federal Government.
“Most of them are not aware that the Federal Government has an incentive programme which gives rebate amounting to 25% of the investment cost for green technology.
“The incentive is called named Green Investment Tax Allowance (GITA), which is offered by the Malaysian Investment Development Authorities (Mida),” he says.
Ko says the company also wants to help power producers set up solar power plants throughout the country.
“The Federal Government’s goal is to produce about 1.5 gigawatt peak (GWp) of solar energy by end of 2020. The 1.5GWp of solar energy is equivalent to the daily energy usage of 300,000 houses,” he reveals.
Ko is also eyeing the regional market.
“The consumption of solar power is also growing in other Asean countries like the Philippines, Indonesia, and Vietnam, where they have recently launched their respective feed-in tariff programmes.
“We hope to tap into these overseas markets in three years,” he says.
Certainly, the global figures for the solar business seem to support Ko’s optimism.
According to Colorado-based global research house, IHS, the demand for solar modules will grow, stemming from the increased global solar installation demand, and this could reach 65.5GW this year.
The IHS report noted that module shipments would exceed 2015 numbers by 10%, with revenues hitting US$41.9bil.
According to SolarPower Europe, the new EPIA (European Photovoltaic Industry Association), the cost of solar power installation has come down quicker than expected and the trend will continue.
“The lowest reported in-house module production cost (including depreciation) in China was 37 US cents per watt in the first quarter 2016,” the report says.
Canadian Solar, one of the three biggest solar companies in the world by revenue, targets module cost to be as low as 29 US cents per watt by the fourth quarter of 2017, according to the SolarPower Europe report.
Meanwhile, the global installation of solar power is expected to hit 97GW by 2020, up from about 50GW in 2015, according to SolarPower Europe.
Moving forward, Plus Solar’s strategy is to do more than just installation. It also wants to focus on providing turnkey solar services, comprising financial solutions, engineering, procurement, construction and commissioning (EPCC) services for residential, commercial industrial and utility projects.
“We are also on the lookout to invest in potential income-recurring solar projects from local and overseas solar panel manufacturers.
“So far, we have invested about RM8mil into two solar farm projects in the northern region.
“The projects have the capacity to generate 1MWp of solar power — enough to power 200 houses for daily usage,” he says.
Ko adds that the company has signed with Huawei to use its string inverters to convert direct current to alternating current for solar projects in the Asean region.