Speaker 1: This is a C N A podcast.
Speaker 1: If you've been thinking about adding a solar power system
Speaker 1: to your home, you're not alone in Singapore. Over 6000
Speaker 1: homeowners installed solar panels on their roofs in 2021.
Speaker 1: Solar looks like a more and more attractive option as
Speaker 1: the cost of going solar trends downwards every year just
Speaker 1: as the cost of climate change keep rising and calls
Speaker 1: to switch to renewable energy grow more urgent
Speaker 1: but harnessing solar isn't as simple as plunking a panel
Speaker 1: on your roof. How can you figure out what's best
Speaker 1: for you and what do you need to consider before switching?
Speaker 1: My guest is belong to, he's the founder of the
Speaker 1: startup Solar AI.
Speaker 1: His company has a software program that offers an instant
Speaker 1: estimate and how much it would cost to install solar
Speaker 1: on your roof. Welcome to the conversations. Thank you for
Speaker 1: coming in today. So good to see you in the
Speaker 1: first off. Let's talk about solar AI what inspired you
Speaker 1: to launch the company three years ago in the midst
Speaker 1: of the pandemic? And how did the idea come about?
Speaker 1: I think quite a lot of it was probably
Speaker 1: a push from climate anxiety. Initially, three years ago, I
Speaker 1: had no background about solar was never like an electrical engineer,
Speaker 1: did like a finance major and then went on to
Speaker 1: management consulting. But at that point in time, I first
Speaker 1: joined kind of like a corporate innovation team. They really
Speaker 1: focus on decarbonization problems, right? So
Speaker 1: I first joined them initially as like an entrepreneur in
Speaker 1: residence and eventually then started studying the problem statement of
Speaker 1: rooftop solar quite closely at that point. One of the
Speaker 1: things which stood out to me was that the energy
Speaker 1: industry has this measurement called the level IZED cost of electricity, right,
Speaker 1: which is kind of like how much it cost and
Speaker 1: to end across the value chain from mining extraction through
Speaker 1: production and finally downstream to distribution. What is that unit
Speaker 1: cost of different energy sources
Speaker 1: From about 2015 globally? Rooftop Solar has already fallen that
Speaker 1: below any other kind of fossil-fuel energy, right? But when
Speaker 1: I was first looking at the problem statement,
Speaker 1: looking around Singapore, I mean, you rarely see rooftop solar
Speaker 1: panels installed, right? And then that just really begs the
Speaker 1: question of okay, if solar is already cheaper than all
Speaker 1: other energy sources, why isn't adoption so much higher? That
Speaker 1: was when I really started exploring and testing out solutions then? Okay.
Speaker 1: So
Speaker 1: how has solar a eyes performance been so far? I wonder,
Speaker 1: you know, what sort of milestone have you achieved since
Speaker 1: the company's inception. Yeah, I remember when I first started
Speaker 1: looking at the problem statement, of course, I mean, the
Speaker 1: first thing that I usually do is go on Google
Speaker 1: and try and search to learn more about solar, right?
Speaker 1: Because I knew nothing at that point in time. I
Speaker 1: remember when I was searching about rooftop solar content, there
Speaker 1: was a lot of content from Australia or us, right?
Speaker 1: But then
Speaker 1: some of them might be misleading. So I think one
Speaker 1: of the examples which stands out the most is in
Speaker 1: Australia because they are on the southern hemisphere, your solar
Speaker 1: panels should be oriented kind of like northwards, right? While
Speaker 1: in the U S northern hemisphere, they should be oriented southwards.
Speaker 1: And so you'd read all these articles saying like okay
Speaker 1: to optimize your solar system, you know, your panels should
Speaker 1: face south or
Speaker 1: Your panels should face north. But in Singapore, because we're
Speaker 1: on the equator, actually the angle of your solar panels
Speaker 1: don't differ, but it doesn't, it doesn't change much instead
Speaker 1: like the flatter, your panels are the more sunlight it captures, right?
Speaker 1: Since then. I mean, we've written a lot of content
Speaker 1: and these days like our website brings in about 15,000
Speaker 1: monthly readers from across the region.
Speaker 1: And over the last year or so, we've completed in 2022,
Speaker 1: completed more than 100 solar projects. Of course, it's still
Speaker 1: baby steps at this point in time, but we're really
Speaker 1: looking to kind of scale that up, especially with like
Speaker 1: a
Speaker 1: new offering that we launched about six months ago called
Speaker 1: a Rent to Own solar model where we allow customers
Speaker 1: to kind of not have to pay the upfront cost
Speaker 1: of solar, which is oftentimes quite hefty but rather just
Speaker 1: pay for solar as a service on a monthly basis
Speaker 1: where we cover all the installation, of course, as well
Speaker 1: as repairs and maintenance on the system. Really interesting. That's
Speaker 1: a really unique concept. And I wonder how,
Speaker 1: how does this help rooftop solar become more accessible to
Speaker 1: underserved property owners? I think when it comes to rooftop
Speaker 1: solar because in the market is still so new, right,
Speaker 1: most people, when they're thinking about solar, I mean, they
Speaker 1: don't know someone else who's had a solar system for
Speaker 1: maybe more than 2 to 3 years. Right. While solar
Speaker 1: panels are typically wanted for 25 or 30 years,
Speaker 1: If they don't know someone else who's had a solar
Speaker 1: system for more than 2-3 years, it's very difficult for
Speaker 1: them to see through that kind of time horizon. If
Speaker 1: you pay up front for a solar system,
Speaker 1: the typical break even period is about seven years or so. Right.
Speaker 1: And so most people hesitate because a lot of our
Speaker 1: customers will ask us, you know, what if maintenance cost
Speaker 1: becomes really expensive? What if like my system fails after
Speaker 1: a couple of years and valid questions? For sure. Exactly.
Speaker 1: And in a market when there is still quite a
Speaker 1: lack of awareness or maybe misunderstanding about how the product works.
Speaker 1: Sometimes it's quite complicated. It is
Speaker 1: good for them to cross that hurdle to say okay,
Speaker 1: I'll pay like 20 $30,000 upfront for rooftop solar system.
Speaker 1: So these rent to own models that we crafted were
Speaker 1: really kind of created to de risk rooftop solar ownership,
Speaker 1: right by allowing them to install solar without having to
Speaker 1: worry about any out of pocket costs in the system
Speaker 1: because we'll cover all of those. And typically on a
Speaker 1: monthly basis, for example, our average customer might pay
Speaker 1: about 250 to $300 per month. Typically, their electricity bill
Speaker 1: savings is already 350 to 400. So they already have
Speaker 1: the net kind of $100 savings. Even while paying off
Speaker 1: the rooftop solar system after 10 years, they convert to
Speaker 1: their ownership. Quite an investment that can actually pay off
Speaker 1: for many of the households. I'm sure there are a
Speaker 1: lot of listeners wondering what are some of the factors
Speaker 1: that they need to consider before they install these panels?
Speaker 1: I mean, how,
Speaker 1: how you determine the suitability of the property of a
Speaker 1: rooftop panel? Yeah, generally because the cost of solar has
Speaker 1: fallen quite a lot for the average lender homeowners. For example,
Speaker 1: if you actually calculate the annualized return of your savings
Speaker 1: from installing a rooftop solar system, typically the annualized returns
Speaker 1: are between 15 to 20% per year. So actually, if
Speaker 1: you think of it as like an investment class, it
Speaker 1: is prob
Speaker 1: probably one of the best performing investment classes out there.
Speaker 1: So the general rule of thumb I think is really
Speaker 1: that if you have a roof, it probably just makes
Speaker 1: sense to go ahead and install solar, right? You could
Speaker 1: choose to have solar as a service model where you
Speaker 1: don't pay any money up front or you could just
Speaker 1: choose to pay it upfront altogether. But generally the couple
Speaker 1: things to look out for, you really want to try
Speaker 1: and maximize your roof space for solar panels. Of course,
Speaker 1: taking into consideration that
Speaker 1: there may be certain parts of your roof which might
Speaker 1: be shaded. Typically, if your roof is shaded or some
Speaker 1: panels in an array are shaded, they may actually affect
Speaker 1: the performance of the outputs of the other panels in
Speaker 1: the same string. So shading areas you would probably want
Speaker 1: to avoid if there are trees, then maybe you might
Speaker 1: want to request for them to be trimmed a little
Speaker 1: bit for instance. And otherwise, because solar panels are installed
Speaker 1: on your roof, of course, for some
Speaker 1: homeowners or like property owners with older roofs, especially like
Speaker 1: tall roofs which might be brittle. They may want to
Speaker 1: consider doing waterproofing. At the same time with the solar installation,
Speaker 1: typically customers with kind of either metal or concrete roof
Speaker 1: of which like for industrial properties. This is extremely common
Speaker 1: typically for new houses, most architectural styles are using metal
Speaker 1: or concrete roofs as well. These roof materials are all
Speaker 1: non penetrative in terms of installation. So it's really kind
Speaker 1: of fast free and then it's really just okay. I
Speaker 1: have this amount of roof space. Let me try and
Speaker 1: maximize the number of panels I can install. That's very interesting.
Speaker 1: You talked about this being a long term,
Speaker 1: 5, 10, 15 years for people who need to move around.
Speaker 1: Is that even? Yeah, the ability of the question if
Speaker 1: you look at like the total cost of installing rooftop
Speaker 1: solar system, that's maybe about in Singapore, like maybe about 50%
Speaker 1: of that is the hardware, meaning solar panels, the inverters,
Speaker 1: any cables, et cetera and then 50% of which is labor.
Speaker 1: So because labor causes such a hefty component.
Speaker 1: If you look at uninstalling and reinstalling a solar system
Speaker 1: onto a new roof also because the roof structure might
Speaker 1: be different, the roof size might be different. Typically, our
Speaker 1: advice to customers is if they have installed solar, just
Speaker 1: tag it onto the property value because now you are
Speaker 1: essentially selling a home with like free electricity, you know,
Speaker 1: like that definitely is
Speaker 1: with something that's selling point. For sure. I wonder how
Speaker 1: the AI fit into all this process. So when we
Speaker 1: first started one of the early hypothesis that we had
Speaker 1: was if you look at the total cost of solar right,
Speaker 1: the industry has this term, they call the soft costs,
Speaker 1: which is generally cost of sales as well as paperwork permitting,
Speaker 1: customer service negotiations. Also
Speaker 1: that costs which are not related to the actual installation
Speaker 1: of the solar system. Right? Soft costs in the rooftop
Speaker 1: solar industry is typically between 25 to 35% of total costs.
Speaker 1: And in comparison, for example, the panels themselves are typically
Speaker 1: around 30%. So soft costs are as high as if not,
Speaker 1: maybe even higher than the solar panels itself. And so
Speaker 1: our theory was really like, okay, let's
Speaker 1: identify ways to try and minimize this soft cost in
Speaker 1: terms of customer education. And so then from there, we've
Speaker 1: really built quite a few kind of computer vision models
Speaker 1: to be able to read satellite imagery, essentially to do
Speaker 1: edge detection, to identify where are the areas of the
Speaker 1: roof edge, start to identify these polygon
Speaker 1: and then start to do some assessment on what is
Speaker 1: the usable error for rooftop solar. The intent of it
Speaker 1: is really to kind of automatically assess what is the
Speaker 1: solar potential of different roofs, right from our company's perspective.
Speaker 1: And that ends up becoming a sales engine to identify
Speaker 1: specific segments of customers in the region.
Speaker 1: But then at the same time on our website, and
Speaker 1: we have also built this into a self service, instant
Speaker 1: solar assessment tool. So customers would be able to click
Speaker 1: into pre assessed rooftops and then instantly get, what is
Speaker 1: the solar potential of their roof? How much could they save?
Speaker 1: What is the expected costs? Because they,
Speaker 1: There's still quite a lot of misconception. I mean, some
Speaker 1: customers might feel like, you know, like a solar system
Speaker 1: is really expensive because five years ago I checked in
Speaker 1: with my architect and he told me it was like
Speaker 1: $100,000 just to allow customers to like self educate and
Speaker 1: start to understand the value of solar. It's very interesting.
Speaker 1: Have there been any case where
Speaker 1: a client comes up to you? Can you check if
Speaker 1: this is feasible? And you said sorry, not your place
Speaker 1: has ever had some kids. I mean, of course, with
Speaker 1: rooftop solar systems, you would only be able to
Speaker 1: install it if you own a roof with quite a
Speaker 1: lot of people who are, for example, myself. I mean,
Speaker 1: I live in the H D B I can't install
Speaker 1: solar even if I really, really wanted to. So there
Speaker 1: have been inquiries like that, that we would then have
Speaker 1: to kind of just politely explain to that. Unfortunately, you
Speaker 1: can't do it or in some cases like condominium penthouse
Speaker 1: owners who would be able to install solar
Speaker 1: based on Singapore's current metering structure, there's also some limitations.
Speaker 1: So if you essentially are like a single property owner,
Speaker 1: meaning owner occupied, right? Or if you're a commercial property,
Speaker 1: Like you own the entire building and pay a single
Speaker 1: electricity bill, if you generate excess solar in Singapore sp
Speaker 1: group would actually pay you for that excess solar energy
Speaker 1: for a residential home. It might be about 80% of
Speaker 1: the current sp retail tariff. So
Speaker 1: this quarter is maybe about 30 cents. SP would pay
Speaker 1: you about 24 cents for any solar that's generated. If
Speaker 1: you're a commercial property owner, you would be then paid
Speaker 1: based on the wholesale market rates which fluctuates on a
Speaker 1: half hourly basis based on demand and supply. But for instance,
Speaker 1: if you are a condominium owner or attendant in an
Speaker 1: M C S D because of this thing called like
Speaker 1: the master submitters scheme.
Speaker 1: If you, I know this starts to get a little
Speaker 1: bit technical, but if you generate excess solar, that excess
Speaker 1: solar electrons would actually just end up going into one
Speaker 1: of your other tenants. And so then in that case,
Speaker 1: you have no way of getting compensated for that access
Speaker 1: because the entire building overall before it is
Speaker 1: fed outside to the grid would already then consume that
Speaker 1: solar energy. So in some cases, it's less feasible just
Speaker 1: from an economics perspective, maybe unless they start to consider
Speaker 1: a battery storage system, but then that battery storage is
Speaker 1: also have their own set of kind of like economics
Speaker 1: as well.
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Speaker 1: since we're talking about the battery storage. I mean, there
Speaker 1: are questions about efficiency and reliability. What happens, you know
Speaker 1: when it's dark or cloudy days or at night? Yeah,
Speaker 1: great question. So when you have a solar system, the
Speaker 1: solar system is typically connected into your distribution board for
Speaker 1: the property, which basically serves as an additional input source
Speaker 1: of energy as an alternative to the grid. But this
Speaker 1: is still completely connected to that distribution board. Meaning
Speaker 1: in the evenings, actually, when the amount of sunlight starts
Speaker 1: to decline, your inverters will actually shut off automatically. And
Speaker 1: then thereafter, you basically just continue pulling electricity from the
Speaker 1: grid in the daytime. When solar energy is generating electrons
Speaker 1: will flow in the path of least resistance. So whatever
Speaker 1: appliances are consuming electricity too,
Speaker 1: first pull it out from the solar panels and then
Speaker 1: while they're doing that, they stop pulling electricity from the grid.
Speaker 1: And so then typically your daytime energy consumption or like
Speaker 1: what you're paying your electricity retailer would be significantly lower. Interesting.
Speaker 1: So the assumption is that the solar panels go on
Speaker 1: the roof you talked about in the Singapore being land scarce.
Speaker 1: There is a bit of the issue with the living
Speaker 1: in condominiums. HDB with the amount of urban shading as well.
Speaker 1: Do these factors affect the scalability of the business? Would
Speaker 1: you say that's one of the biggest hurdles in a way?
Speaker 1: Because ultimately, the main constraint is really that we are
Speaker 1: land scars. But then
Speaker 1: if you kind of look at Singapore's potential energy mix overall,
Speaker 1: I mean, we don't have space for like wind as well.
Speaker 1: So if you talk about greening the grid for Singapore
Speaker 1: solar is probably still the best option out there available. Hypothetically,
Speaker 1: if we do soul arise all routes in Singapore and
Speaker 1: we've done some kind
Speaker 1: Like data science behind this, you could probably contribute about 15%
Speaker 1: of samples total energy consumption. So it's still low. But
Speaker 1: that's primarily because as a country, I mean, our energy
Speaker 1: use per capita is extremely high primarily from like the
Speaker 1: industrial processes. But as a business, ultimately, which tries to
Speaker 1: attract external invest
Speaker 1: this, we would have to then also have a regional
Speaker 1: road map. And ultimately, that is really our ambitions as
Speaker 1: well because the single goal for us as a company
Speaker 1: is really to try and massively scale rooftop solar adoption. Well,
Speaker 1: the good news is that solar power, as you mentioned,
Speaker 1: isn't a fringe technology anymore. It's gotten cheap so fast
Speaker 1: over the past decade or so.
Speaker 1: But why is that take up so slow? You did
Speaker 1: mention the education and the people having doubts. But what
Speaker 1: do you think it's stopping them? I think it is
Speaker 1: those factors combined with kind of the fact that status. Cool. Right.
Speaker 1: If we're using electricity, we really only need to pay
Speaker 1: for it when we turn on the switch, when you're
Speaker 1: switching to solar, that's inherently like a sizable upfront cost
Speaker 1: of capital that you need to fork out the ever
Speaker 1: which rooftop solar system cost would be about 20,000 for
Speaker 1: a standard kind of inter terrace house. And of course,
Speaker 1: that is like an investment that you would then require
Speaker 1: like 578 years to see back your returns and then
Speaker 1: really start to get free electricity from that point onwards
Speaker 1: in the market. When most people don't really trust or
Speaker 1: fully understand the product, I think that is really like
Speaker 1: the main blocker. But then in the last one or
Speaker 1: two years as well, we've seen rooftop solar adoption in
Speaker 1: Singapore increase a lot worse.
Speaker 1: Some partners, these are like solar installers when we first
Speaker 1: met them two or three years ago that maybe doing
Speaker 1: like 2 to 3 projects a month and that was
Speaker 1: maybe like a good month. Um These days, they could
Speaker 1: be doing like 30 40 projects back to back every month,
Speaker 1: like residential projects. So we've seen that 10 X increase
Speaker 1: over time, which is really encouraging as well. It certainly is.
Speaker 1: And with the demand, obviously, they're growing number of other
Speaker 1: solar solution startups as well. I wonder how stiff is
Speaker 1: that
Speaker 1: competition in this market? And then how do you plan
Speaker 1: to stay ahead of the game? This is something that
Speaker 1: we would look out for in the last couple of years.
Speaker 1: There have been a lot of companies in Singapore who
Speaker 1: moved into the solar industry. A lot of these are
Speaker 1: generally engineering companies who then started to extend into rooftop
Speaker 1: solar in terms of our business model. This is not
Speaker 1: actually a bad thing because as a company, we typically
Speaker 1: work closely with installer partners to really supply the labor
Speaker 1: to do rooftop solar and
Speaker 1: installations. Of course, the higher that supply the more partners
Speaker 1: we are able to work with and the more capacity
Speaker 1: we have to be able to build projects to customers. Ultimately,
Speaker 1: we are a product or customer service layer, right? Customers
Speaker 1: typically discover us mostly through Google search and then thereafter
Speaker 1: we provide them with these kinds of zero upfront cost
Speaker 1: offers which for the residential segment at this point in
Speaker 1: time or the only company in Singapore that does it.
Speaker 1: But then at the same time, this is also like
Speaker 1: a business model which is well established in other parts
Speaker 1: of the world, right? So in us, you have a
Speaker 1: lot of listed companies like Sandra and solar city who
Speaker 1: are all operating on this model. And in Europe may
Speaker 1: be the largest companies are maybe about 56 years old, right?
Speaker 1: So Southeast Asia as a region is maybe 10 years
Speaker 1: behind us, like five years behind Europe. And we're really
Speaker 1: taking all of that learning and what's worked for consumers
Speaker 1: to try and apply them and
Speaker 1: In the region. And your goal is to convert 5000
Speaker 1: properties across Southeast Asia to solar by 2025, 2 years
Speaker 1: left coming along. So there's still a lot to do.
Speaker 1: Our expansion plans is really over the next 1.5 years
Speaker 1: to start to move into Philippines. Their electricity prices in
Speaker 1: us dollar basis is about the same as Singapore, right?
Speaker 1: But of course kind of cost of living adjusted. That's
Speaker 1: about three times higher.
Speaker 1: The benefits of solar is even more heightened when your
Speaker 1: cost of retail electricity is expensive, right? As well as
Speaker 1: when your cost of solar installation, primarily from the labor
Speaker 1: component because panels and inverters, these are all global supply
Speaker 1: chains are really standardized, right? When your labor component cost
Speaker 1: is able to be reduced,
Speaker 1: then the kind of cost savings that you get from
Speaker 1: installing solar compared to just taking electricity, but really creates
Speaker 1: a lot more savings for these customers. What do you
Speaker 1: envision for the future of solar energy in Southeast Asia?
Speaker 1: And how does a solar ai fit into that vision?
Speaker 1: I really am hopeful that in the region, rooftop solar
Speaker 1: would be able to start to contribute a really significant
Speaker 1: share of the grid. Of course, there are some kind
Speaker 1: of teething problems which we would have to address as
Speaker 1: an industry over time in terms of kind of the
Speaker 1: dark curve of solar, which is when solar is generated
Speaker 1: typically in the daytime. But of course, there's still continued
Speaker 1: energy usage and
Speaker 1: some of these problems will have to be addressed. But
Speaker 1: then I am really bullish that solar can play a
Speaker 1: really large role in this as a company. Our mission
Speaker 1: ultimately is really to make it as simple as possible
Speaker 1: for any property owners to get solar. So firstly, starting
Speaker 1: out from like an education and awareness perspective, thereafter, we
Speaker 1: have then, you know, six months ago, launched off
Speaker 1: for us to really eliminate that problem of like having
Speaker 1: to pay a high upfront cost for rooftop solar. I mean,
Speaker 1: ultimately really drive this forward just to kind of take
Speaker 1: it every step of the way and like remove any
Speaker 1: barriers to entry for customers to get solar. Brilliant us.
Speaker 1: Let's hope the sun keeps shining on your business and
Speaker 1: we see higher adoption of renewable technology like solar in
Speaker 1: the region as well. Well, thank you so much for
Speaker 1: coming in. No problem. Pleasure talking to you. Thank you.
Speaker 1: Thanks to my guest, belong to and thanks to all
Speaker 1: of you for tuning in. We hope you enjoyed this
Speaker 1: episode but do remember to subscribe and like this podcast.
Speaker 1: So you know, when a new episode drops, you can
Speaker 1: find cnn's climate and sustainability coverage online. At Sienna dot Asia.
Speaker 1: The team behind this podcast is Joanne Chan Cyan Win,
Speaker 1: Jacqueline Chan and Christina Robert and I'm Julie, you signing off.