SolarQuarter ASEAN had an exclusive conversation with Mr. Milan Koev – Chief Executive Officer, Hexagon Peak and got insights on the company’s offerings in the region and future growth plans. He highlighted the importance of floating solar and also storage systems in the South East Asian solar market.
Please tell us about your esteemed company Hexagon Peak’s solar offerings in South east asia.
Hexagon Peak is a C&I project developer in Southeast Asia. We are headquartered in Singapore and in addition run operations in Vietnam, Thailand, Philippines and Japan. We have developed around 60 MW of private PPAs in the region, with the strongest presence in Vietnam, where we are working with leading multinational conglomerates like Foxconn, Meggitt and others.
Tell us a bit about the recent technology and cost trends in the South East Asian solar market.
From a technology standpoint there is quite a lot happening. We start seeing more and more very high efficiency panels being installed on the roofs. Right now efficiency of over 21% is already an industry standard for C&I applications. The inverters are getting smarter as well. Inverters communicating directly with the O&M suppliers on the O&M schedule, sending reminders and recommendations is what I find super cool.
Southeast Asia is a C&I market, except for Vietnam, where we are working on a utility scale project for the upcoming DPPA program. But apart from that, there is no utility scale development at the moment with the pending FiT 3 in Vietnam and the next LSS in Malaysia. So from the cost perspective we haven’t seen much change really in the C&I segment.
The overall growth of panel prices of up to 10-15% has increased the project CapEx by something like 4-6%. I believe the prices will now stabilize for a while, however in the mid- and long-term the equipment cost (especially panels) will continue to drop. So it’s really a small bump on the road instead of a real price trend. And even despite these supply chain uncertainties, despite COVID, travel restrictions and lockdowns, the industry will account for a net growth again this year.
How do you think floating solar can contribute towards attainment of the south east asia region’s renewable target?
Solar will be the biggest source of renewable energy in Southeast Asia. In fact globally solar is the biggest source of new energy capacity added. Floating solar will solve land issues in some countries in SEA, such as Singapore. So floating will overall play a role, particularly in reservoirs and lakes, but I think in order for floating solar to really pick up and catch up with the significance of off-shore wind as comparison, we will need to see much more capital deployed in open sea solar, essentially becoming an off-shore solar industry. Project financing remains an obstacle today for such industry to pick up, with lack of data on the effect of sea salt corrosion, exposure to strong current and the environmental impact of sea life. I am optimistic that with maturity of such projects, lenders will take a less conservative position and will enable more investments into the space.
Your company is into solar storage systems as well. Please tell us the significance and benefits of combining storage with solar.
In Southeast Asia the presence of storage systems remains insignificant unfortunately. The still high CapEx for batteries makes such systems applicable for geographies with high cost of retail on-peak electricity, which is not really the case in SEA countries. However the improvements of technology, battery life cycle, charging capacity and most important – cost, would enable solar storage systems for solving a variety of grid issues, most important of which – curtailment.
Off-grid storage systems are still not happening at scale. Countries like Indonesia and Philippines with issues on the grid availability on remote clusters of inhabited islands should be a no-brainer for off-grid storage, however governments are not yet making the effort to push the industry forwards.
So essentially government policies for solar storage would bring in more capital to the segment.
How do you see Hexagon Peak contributing to the solar sector in the coming future?
On our roadmap we have 4 more countries to enter and because solar markets are so dynamic, it is really a miracle to come up with a long-term geographical strategy in our industry, so we play by ear really.
We are now working on a project called suncrowds, which will be the first global crowdfunding platform for solar projects. Very exciting project and I promise you another interview when we have launched the platform. Right now we are finalizing the developers platform, which will offer project owners the opportunity to sell their assets through the platform and we will be very generous in evaluating those projects if the sellers commit to use the proceeds for developing new projects – with the aim to create a sort of circular economy.