Update on JTC's Solar Deployment Scheme and Proposal for Landlord-to-tenant Solar Energy Purchasing Guidelines

7 Mr Leon Perera asked the Minister for Trade and Industry whether JTC's mandatory solar deployment scheme can be expanded to all tenants, with JTC offering (i) incentives for tenants with short remaining leases to make up for the inconvenience and (ii) to own solar installations and lease these to tenants with the shortest remaining leases.

8 Mr Leon Perera asked the Minister for Trade and Industry whether there are any plans to develop a set of landlord-to-tenant solar energy purchasing guidelines and to promote such arrangements, given the mutual benefits of lower-cost rooftop solar energy.

The Minister of State for Trade and Industry (Ms Low Yen Ling) (for the Minister for Trade and Industry): Mr Speaker, Sir, can I have your permission to take Question Nos 7 and 8 together, please?

Mr Speaker: Yes, please.

Ms Low Yen Ling: Thank you, Mr Speaker, Sir. For commercial and industrial buildings which deploy solar power on a solar leasing model, the solar developers typically sell the solar energy captured to building owners who would use it to offset the electricity consumption in common areas. For instances where the solar installation is owned by building owners, the solar energy is typically used for common areas by the owners.

Electricity charges and savings are negotiated between the landlords and tenants as part of their overall tenancy agreements. With this in view, it is not appropriate for us to provide guidelines on solar savings alone.

Nevertheless, landlords can consider taking reference from practices established by JTC Corporation (JTC) aimed to encourage solar adoption. JTC adopts a two-pronged approach to encourage solar adoption amongst their lessees. First, JTC runs the SolarRoof programme. This was initially started to solarise JTC's own buildings. SolarRoof was expanded in 2020 to other buildings to make solar adoption more accessible for lessees, including those with shorter leases. Today, JTC's lessees can choose between two solar deployment models, both of which do not require any upfront capital outlay if JTC's appointed solar vendor for the SolarRoof programme is used.

The first model available is through rooftop licensing, where lessees can lease their space to any solar vendor for solar panel installations in return for a rental fee. The second model is solar leasing, where lessees allow vendors to install solar panels on their rooftops and they pay a discounted rate on the electricity generated which offsets their electricity consumption.

JTC implemented the mandatory solar deployment scheme in 2020, as highlighted by the Member. This scheme requires lessees with a new or renewed land lease with JTC of more than 15 years, and with at least 800 square metres of contiguous rooftop area, to carry out solar deployment. Lessees can adopt the two deployment schemes under the SolarRoof programme if they do not wish to own the solar panels themselves.

The Member will be glad to know that JTC is currently studying even more options to push solar adoption further, especially for lessees and tenants with short remaining tenures.

The Government will continue to review ways to incentivise and promote more solar adoption, including co-creating solutions with private developers and industry players, as well as work with stakeholders to maximise solar energy adoption in Singapore.

Mr Speaker: Mr Leon Perera.

Mr Leon Perera (Aljunied): I thank the Minister of State for her answer. Just one supplementary question which is in relation to creating incentives to retrofit, for those that are not covered by the mandatory rule where there is a new tender or new construction, for existing facilities where there is no mandatory rule. I think in some cases, there is an issue where the landlord is not incentivised to really do a solar deployment, which may be able to benefit the tenant. I am wondering whether this is something that the Government can look at in terms of specifying guidelines whereby the benefits can be shared by the landlord and the tenant and there may be electricity generated that goes beyond what is needed for common areas.

Such guidelines may be able to incentivise both the landlord and the tenant to do a solar deployment in cases where it is not mandatory. So, is that something that we can look at?

Ms Low Yen Ling: Mr Speaker, I want to thank the Member Mr Leon Perera for his supplementary question. Please allow me to share that solar energy is currently the most viable renewable energy in Singapore and the Government is committed to continue to accelerate our efforts to promote solar adoption. We are on track to achieving the solar panel deployment target of two gigawatt peak (GWp) by year 2030, which is equivalent powering 350,000 households annually. In fact, since 2015, our solar installed capacity has increased by nine times to over 560 megawatt-peak (MWp) in the third quarter of the year 2021.

Earlier, I cited JTC's mandatory solar deployment scheme. I would like to share that currently a total of 224 MWp has been deployed across JTC's industrial estate – 224 MWp, compared to the 560 MWp I mentioned earlier. So, it is about 40%. This includes JTC's vacant industrial land and buildings owned by JTC and its lessees.

I want to assure Mr Leon Perera that JTC's mandatory solar deployment scheme ensures that the lessees, which means the owner of the building, solarise their rooftops in line with the national efforts to increase our solar energy adoption.

The prerequisite for the mandatory solar deployment scheme is established by JTC in consultation with the solar vendors. For example, as per current market practice, the typical contracting period for solar installation is between 15 years and 20 years, and a minimum of solar installation area of at least 800 square metres is required for the solar deployment for this to be viable. These requirements are needed to ensure that both the lessee as well as the solar vendor have sufficient runway and skill to amortise the upfront fixed investments into the solar panel installation.

Having said that, I want to assure Mr Leon Perera that any lessee with shorter lease period of less than 15 years, or even smaller rooftop space of less than 800 square metres, they can still engage the solar vendor, including JTC's appointed solar vendor to participate in the SolarRoof Programme.

I also want to reassure him that JTC is currently seeking new solar vendors who are able to service shorter contract periods so that we can benefit the lessees and the tenant of shorter compact periods. And in fact, JTC is also engaging existing tenants in land-based facilities to explore the possibility of a license fee sharing model. And in addition, as part of the SolarRoof programme Phase Three tender, which was just launched in November 2021 three months ago, both rooftop licensing and solar leasing rates for shorter contract period options of less than 10 years will be made available.