But what makes solar installations a worthwhile investment? How much do they cost, and what does the installation process involve? Alika shares more.

Solar energy not only supports Singapore’s national push towards net zero but also offers practical advantages for consumers – helping them to reduce their electricity bills over time.

By generating their own solar power, private homeowners and businesses could improve their self-sufficiency for electricity consumption. They could even sell the excess solar-generated electricity to the national grid, helping to offset their energy costs or even generate revenue.

“That said, like any major investment, it’s important to weigh both the benefits and costs,” Alika said.

Solar-related costs generally fall under two categories: upfront expenses, such as the cost of installing the solar photovoltaic (PV) systems, and recurring costs including operation and maintenance.

Another key consideration is the levelised cost of solar energy (LCOE), which reflects the cost of generating electricity. “Simply put, the LCOE refers to the cost per unit of electricity by dividing the total costs by the total electricity that the solar panels generate over their lifetime. And the LCOE has steadily declined over the years due to technology advancements,” she shared. In other words, the cost of solar power has gone down.

The good news is that most rooftops can support solar PV installations. However, several factors can affect their suitability. “For instance, rooftops with many small sections, steep slopes or are structurally complex may pose challenges for installation,” Alika explained. “Shading from nearby buildings or trees can also impact efficiency, as solar panels perform best with direct sunlight exposure.”

For a professional assessment of their rooftop’s suitability, homeowners and businesses could consider solar system providers listed on the National Solar Repository website.

Understanding the regulatory steps involved in solar installation is essential to ensure a smooth and compliant process.

For one, you need a solar PV installer to engage a Qualified Person, a registered architect or professional engineer, to oversee the design and installation of the solar PV system, and to obtain the necessary permits.

It is also important to engage a Licensed Electrical Worker (LEW) to commission and turn on the solar PV system. Alika said,” The LEW ensures that the system is safely connected to the electricity grid and complies with all technical and safety regulations, preventing potential hazards such as electrical faults or power disruptions.”

The cost of installing a solar PV system depends on its size. “As a rough estimate, upfront costs can range from S$1,000 to S$1,600 per kilowatt-peak. For recurring costs, they are generally between 1% and 2% of the total solar PV system cost on an annual basis,” Alika explained.

When it comes to the payback period, Alika shared that this would vary based on factors like the size of the solar PV system and individual consumers’ electricity consumption patterns. She observed that most consumers are likely to break even in about seven years, although those with larger systems and higher electricity usage may see shorter payback periods.

According to Alika, there are several payment schemes available in the market. The payment scheme to go for will depend on the type of consumers, solar system capacity, as well as the payment scheme that consumers go for.

Consumers who buy electricity via SP Group and have less than 1 megawatt alternating current (MWac) of embedded solar capacity have the option to register with SP Group under the Simplified Credit Treatment (SCT) Scheme. “With this scheme, you will be paid based on the prevailing electricity tariff rate minus grid charges. The grid charges are excluded from the payment as there are costs to maintaining electricity infrastructure and transporting the electricity, which are incurred by SP Group as the national grid operator, and the consumer still needs to rely on the grid connection.” Alika explained.

For those consumers who buy electricity from electricity retailers and have less than 10 MWac of embedded solar capacity, they could opt for SP Group’s Enhanced Central Intermediary Scheme. “Payments under this scheme are based on the prevailing half-hourly wholesale electricity prices, which fluctuate with real-time demand and supply conditions in the electricity market,” Alika explained. This means the payments you get will vary depending on market conditions, unlike the more fixed rate for the SCT scheme.

Yes, you can.

For private homeowners and businesses who are unable to install solar panels on their properties, Alika shared that they could consider buying solar-generated electricity directly from a solar system provider that owns solar installations.

For others, they could consider signing up for price plans offering green electricity from solar generation or electricity that is offset by Renewable Energy Certificates (RECs), which certify that the energy is produced from renewable sources.