The Solar Power Company That Changed the Game
They overcame the odds to bring solar energy to the masses in Singapore. Meet Sunseap Leasing.
Sunseap founders Lawrence Wu (left) and Frank Phuan.
Many think of solar energy as lovely in theory but impractical and expensive in practice. But Singaporean company, Sunseap, has challenged that perception. Thanks to its innovative leasing model, the sustainable energy company is installing solar panels on HDB blocks across Singapore.
Just how did they do this? Well, with a little help from their bank. The story goes that Sunseap founders Lawrence Wu and Frank Phuan (whose father started the solar energy company in the 70s) went from bank to bank looking for a loan in 2011, but none would back them. The panel had a high upfront cost (equivalent to paying up to decades of electrical consumption in one shot) and lenders could not see past these barriers. Finally, Frank and Lawrence went to DBS’ SME banking whose executives Tan Soh Leng and Catherine Tan mooted the idea of a leasing model, to overcome the cost barrier. DBS then gave Sunseap the loan.
By renting solar panels, upfront costs and maintenance fees were drastically reduced.
Fast forward to today, and Sunseap has gone from strength to strength. Its solar panels now grace the tops of HDBs in Jurong and it made the news last year when it helped tech giant Apple run their entire Singapore operations on solar power. In February of this year, the company’s uplifting story was dramatised into Sparks, a DBS mini-series inspired by Sunseap’s true story.
Asia For Good chats with Frank Phuan, co-founder of Sunseap on how he brought his humble family business to operating the majority of grid-connected Photovoltaic (PV) power plants in Singapore.
Why sustainable energy business and the focus on solar power?
We have all witnessed first-hand, the harsh effects of climate change. We cannot continue living in an unsustainable manner, treating resources as though they are an infinite supply and destroying them for the next generation. A sustainable business is a way for us to resist climate change. Our customers can make monetary savings and a meaningful contribution to the environment at the same time. My family has been in the solar panels manufacturing business for over 30 years – I had been exposed to the sustainable energy business from a young age. My father had always advocated the importance of an environmentally-sustainable business, even when the idea of “sustainability” was in its primitive days.
What were the biggest challenges you faced setting up Sunseap?
When we started the first grid-connected system in 2006, it was hard for people to understand the concept. We had to go around government agencies, talking to people to get support and backing for the solar leasing model. It took us around four years to finally receive approval from Energy Market Authority (EMA). In 2010, HDB released the first solar leasing tender, after the model was accepted.Another challenge was how we were going to finance our project – explaining the new business idea to various local banks took a lot of time, and it was really heartening to have DBS finance our first solar leasing project in Singapore.
Tell us about securing HDB as a client.
Solar leasing with HDB started out as an idea to cover all HDB blocks with solar panels, to make energy consumption clean and sustainable. However, there was a high upfront cost for the system.
In the early stages, the process of drawing up the tender was a complicated one because tenders had to be issued separately for the solar panels, installation and maintenance of the system. If there were any errors, it would be difficult to pin-point the source. Solar leasing solved the problem by having only one point of contact for all of these processes.
Limited funds for the solar power development also was no longer an issue for HDB because solar leasing didn’t require high upfront costs.
What do you tell potential clients about the many benefits of switching to solar power?
The main purpose and vision we have for solar leasing is to reduce carbon footprint. However, in Singapore, economics seems to be a more important factor than the reduction of carbon footprint, and solar energy is something that is sustainable over a long period of time. When we offer a discount pegged to the client’s electrical tariff, it serves as a long-term saving and energy hedge for them.
Now let’s get personal. Apart from leasing solar panels, are you particularly eco-friendly in your daily life?
I have a 2.5 kiloWatt-peak (kWp) system installed on the roof of my house. This allows me to save around $50 a month on electrical bills. It also serves as a shelter and is a unique feature in my house. My family also has an all-electric car, the BMW I3, which can be charged with the solar panels installed on my rooftop. A full charge probably costs us less than $5 for a 100km drive – we have not pumped a single drop of petrol since we bought the car some months ago.
Interested in socially conscious living in Asia? Check out Asia For Good's social enterprise directory.
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