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SolarQuarter ASEAN had an interesting chat with Thang Chee Keong – CEO, Plus Xnergy Services, and learned about the recent technology and cost trends in the Southeast Asian solar market. He also spoke about the number of services provided by Plus Xnergy and the significance of combining Solar with storage.
1. Tell us a bit about the recent technology and cost trends in the Southeast Asian solar market.
- Adoption of Solar Energy is Growing but Could be Improved Among Consumers.
Globally, solar has become the cheapest form of power due to new tech according to analysts Wood Mackenzie.
As a clean energy solutionist, we are the first company to build a smart energy ecosystem to empower businesses, utilities and communities to lead the redefinition and innovation of energy generation and application, progressively advancing communities.
As we build a smart energy ecosystem, region-wise, while we see that the clean energy uptake has certainly grown tremendously in terms of overall adoption especially among businesses, however, consumer adoption of clean energy can still be improved. The reason for low consumer adoption of clean energy is due to the fact that solar is still known as a solution with high upfront CAPEX pay-out.
As we recognize this need arising in Malaysia, we were the first to launch the nation’s first rent-to-own solar program which comes at a $0 down payment and includes maintenance. Malaysia has a rooftop potential of 3.2 million landed households which can be converted into solar-powered roofs. Our plan is to convert more than 2,000 houses into solar-powered ones in 12 months and 5,000 by its second year.
$0 CAPEX Solar Solution
A PPA is a lease-to-own solar financing option that involves $0 CAPEX spending on part of the adopter. Aimed at optimizing cash flow, building owners can enjoy lower electricity tariff rates, saving on their monthly energy bills.
Through it, businesses gain recurring and reduced electricity tariffs at no upfront capital expenditure (CAPEX) over a 15–20-year lease-to-own tenure. Once mature, building owners take full ownership of the solar setup and its savings benefits.
- Digitalization of Energy Data
According to the International Energy Agency (IEA) Sustainable Development Scenario, energy efficiency represents more than 40% of the emissions abatement needed by 2040. At Plus Xnergy, we believe that clean energy expands beyond just solar power generation it should also include energy efficiency to complete the smart energy ecosystem, that is why we have developed in-house AIoT smart energy solutions which will digitalize the energy data. Our AIoT (Artificial Intelligence & Internet of Things) called SOURCE empowers business owners to turn their building energy data into smart energy savings.
Industries that can benefit from this system include the sector we cater solutions for, which is the commercial and industrial (C&I) sector. This is because heating, ventilation, and air conditioning (HVAC) consume about 40% of the global energy use. Using smart energy management, wastage of energy can be identified, while improving overall energy efficiency and maximizing energy savings.
2. What major challenges do you face today in the development of projects in the Southeast Asian market?
The transition out of fossil fuels won’t be that easy
- Demand for oil, coal, and natural gas has skyrocketed worldwide as unusual weather conditions and resurgent economies emerge from the pandemic combined with energy shortages in China as well as nations that are doing economically well. The situation has revealed the fragility of global supplies as countries drive to pivot from fossil fuels to cleaner sources of energy, a shift many investors and governments are trying to accelerate amid concerns about climate change.
- Not only does this apply across the globe, but Southeast Asia, which is booming with potential, is also facing the ripple effect of these challenges.
- Vietnam in particular is ahead in total renewable capacity in SEA as the first place whereas Malaysia is standing at the 4th place. Vietnam’s success is driven by a proactive government determined to reduce the country’s reliance on coal to generate power, backed by policies to promote renewable energy, as well as its forward-thinking National Power Development Plan, which aims to generate 50GW by 2030. Vietnam is focused on achieving its goals to ensure a big push towards renewable energy also by attracting foreign investors into the country. Being a clean energy solutionist in Malaysia, we hope to see this success extended to our nation.
- In Malaysia itself, we are still transitioning out of oil and gas, but the future is in clean energy, which is many different things such as natural gas, battery storage, other forms of clean energy, even nuclear which is arguable.
- As a leading clean energy solutionist, we are glad to see that clean energy uptake in Malaysia is still strong among businesses but that this improvement can be extended for communities.
- It’s a long process and could take more than 10 years to see a real change, but when it does happen, alternative energy such as solar as well as others such as natural gas, and battery storage- will become the majority, way beyond O&G.
- According to the Mckinsey Global Energy Perspective 2021 report, renewables will ramp up and account for half of the global power generation by 2035.
- In fact, by 2035, more than 50% of global power generation will come from renewable sources.
- There is certainly greater awareness in terms of the need for cleaner energy and we see this across the globe.
- With this, I see the year beginning with surging growth for renewable energy, despite the pandemic which has not held it back.
- In line with the increase in demand for green/sustainable market, we also see green jobs increasing where an estimated 24 million jobs worldwide could be created by the green economy by 2030 – which signals a positive growth in the green-sustainable market
- In the recent COP26, the most important global summit on climate change since the one that produced the 2015 Paris agreement, Malaysia has echoed the language of developed countries with our goal to be “carbon neutral” or achieve “net-zero” emissions by 2050, according to media outlets. Both have been announced in the 12th Malaysia Plan, though the two are not necessarily the same. Climate ambition is welcome, and Malaysia clearly wants to be perceived as proactive in this area.
- We applaud this movement with the rise of Environmental, Social & Governance (ESG) among corporate organizations to lower the global temperature by 1.5 degrees Celsius.
- Locally, we also see the Government moving towards sustainable focused initiatives with the carbon pricing and carbon tax introduced in the 12MP – with an aim to be a carbon-neutral nation by as early as 2050.
3. Please tell us about your esteemed company Plus Xnergy’s solar offerings in Southeast Asia.
We are dedicated to building a smart energy ecosystem for businesses, utilities, and communities which is why we do so by providing solutions within and beyond Malaysia. While we cover the Malaysian market, we look forward to providing the following to countries within and beyond Southeast Asia:
- Solar for Business – (Commercial & Industrial Buildings)
We provide clean energy solutions for businesses to achieve sustainable energy composure, reducing energy bills, production cost, and the Maximum Demand (MD) of the building energy consumption. To date, we have contributed to this rapid growth by realizing a cumulative solar portfolio of more than 100 MNC companies and a transacted project value of over RM250mil from 2020-2021.
- Solar farms
We invest, develop and provide Engineering, Procurement, Construction, and Commissioning (EPCC) services for large-scale solar power plants in Southeast Asia. With a proven track record of outfitting six solar farms, we build and deliver the solar farms on time.
- Battery Energy Storage Systems (BESS) Solutions
To aid you in obtaining a battery storage system that is the best fit for our clients, we provide end-to-end services from the preliminary study to cost-benefit analysis and outfitting the project that’s built to return optimum value from your investments.
4. Your company is into solar storage systems as well. Please tell us the significance and benefits of combining storage with solar.
As we all know, the biggest challenge with solar is the intermittency which affects the electricity supply reliability that is critical for businesses. Combining battery storage with solar can enhance the reliability & stability of the electricity supplied through the key applications below:
Peak shaving: This is ideal for businesses that are paying TNB for maximum demand (MD) charges where battery storage can help businesses further optimize their energy savings through reduction of MD charges.
Curtailment avoidance: In the self-consumption scenario, any excess generation will not be limited by consumption behavior. With battery storage, any excess/unutilized generation can be stored in battery storage and be consumed later.
Suitable for Off-Grid & Microgrid: In remote areas, battery storage can provide uninterrupted off-grid electricity to cater to the needs of the local community. This system will enable your sites to reduce the energy cost per unit, especially if the systems rely on diesel generators.
Capacity firming: Battery storage can be sized to provide a consistent supply to maintain the base load of energy required.
Demand response: The extremely fast response time of battery storage makes it an ideal solution to ensure power supply continuity and stability during the period when the solar generation is fluctuating due to partial clouding conditions, or when there is a sudden surge in demand.
5. What do customers look for when they approach Plus Xnergy to help them address their sustainability ambition?
- How clean energy will truly save the environment
Many of our clients who first come to us always ask about how clean energy can further drive their ambition towards a greener future. We tell them that solar energy does not emit any additional carbon emissions when it is being generated and the level of carbon emissions it has saved is equivalent to the number of trees planted.
World leaders and policymakers have identified clean energy to be a move for businesses and communities to act on towards climate change. With the rise of Environmental, Social, and Governance (ESG) principles, businesses are able to leverage clean energy to showcase their commitment, maintain a competitive advantage, and move forward in the future.
- Making the most out of their investment
The common misconception we often get is that solar energy is expensive and takes 10 years to reap the return on investment, when in fact that businesses can receive their ROI as early as 3 years and homes can reap the ROI as early as 5 years. This is all due to the existing clean energy policies (Net Energy Metering) and SeLCO (Self-Consumption), tax allowances offered by the local authorities such as Green Investment Tax Allowance (GITA) and Capital Allowance (CA) where businesses can get up to 48% of tax allowances upon their solar investment.
For businesses who are seeking to manage cash flow during this time, we are providing them with Power Purchase Agreement (PPA), an $0 CAPEX solar solution, where it is aimed at optimizing cash flow and adopters enjoy lower electricity tariff rates, saving on their monthly energy bills.
Through it, businesses gain recurring and reduced electricity tariffs at no upfront capital expenditure (CAPEX) over a 15–20-year lease-to-own tenure. Once mature, business owners can take full ownership of the solar setup and its savings benefits.
As for homes, with concerns of the upfront cost and getting a bank loan, we launched Malaysia’s first rent-to-own solar program, Xnergy Home, and even the region, where individuals would pay a $0 down payment and would not need to get a bank loan. Similar to repaying for a car loan, individuals would pay off the system payments within a rental period of up to 5 years, and when the individual would be able to enjoy free energy after that.