SolarQuarter ASEAN had an exciting interview with Mr. James Buskowitz – Chairman & CEO, Buskowitz Group, and understood the growth of the solar sector in the ASEAN region with respect to the set target. He also spoke about the development and financing of renewable energy projects in the region and the recent technology and cost trends in the South East Asian solar market.
1. For ASEAN to achieve its renewable target of 23% by 2025, how important is the contribution and role of the Solar sector in particular?
Solar is one of the most abundant energy resources available, particularly in the Philippines, which experiences more peak hours of sunlight than our neighboring countries in the ASEAN region. In addition, the cost of solar has dropped about 70% – 80% in the last 10 years, making solar power one of the cheapest costs of power today.
Southeast Asia has been one of the fastest-growing markets with Vietnam and Malaysia at the forefront. These two countries account for the highest amount of new PV capacity installed in the region, with 5,695 MW and 2,987 MW reported in 2019 respectively.
Locally, we anticipate continued growth for solar infrastructure with better government support and an improvement in the permitting process, thus allowing more businesses to invest in the industry. Furthermore, the amendment of the Public Service Act earlier this year allowing 100% foreign ownership of public utilities—which encourages foreigners to invest 100% equity in certain domestic market enterprises, or to set up and own SMEs under specific measures—will definitely help the Philippines contribute to the ASEAN renewable energy target.
2. Tell us a bit about the recent technology and cost trends in the South East Asian solar market
There are several improvements in solar technology that add to the equipment’s overall safety and efficiency. However, one of the big leaps in solar innovation is a 20%+ increase in panel efficiency at comparable costs allowing us to install bigger capacities in smaller spaces. In highly-concentrated cities such as Metro Manila, the increased panel efficiency will definitely be able to help design systems that are both sustainable and space-saving.
One of the major setbacks affecting the costs of services in the solar market is the shortage of panels due to the recent ban on exports from certain solar suppliers in China along with a shortage of global silicon. We anticipate for the costs of solar panels to continue to increase temporarily until we are able to find an alternative source of raw materials, which are increasing in demand based on the global industry’s needs. Overall, however, the cost of solar power has still dropped below the price of coal and I am confident it will remain that way or rather continue to decrease and widen the margin over the long run.
3. Tell us about your experience with the development and financing of renewable energy projects in the Philippines?
Buskowitz was founded as sustainable solutions and integrated services organization 9 years ago, which aimed to accelerate the country’s development towards renewable energy through solar photovoltaic rooftop installations. What was initially research on how to lower the electricity bills of our family-owned hotel in Boracay turned into advocacy.
At its infancy, the market was not aware of the benefits of going solar, which proved a challenge as many perceived solar to be too expensive.
Initially, to help eradicate the cost barrier, instead of having the customer pay for the entire system outright, we started offering in-house financing plans or power purchase agreements, where the customer can avail of a system at no upfront cost. Buskowitz Energy builds the system, operates, and at the end of the contract period, gives ownership to the client for free, while still being available for maintenance and operation. This transferred the initial capital cost to Buskowitz, which made the decision-making of the customer much easier. However, raising capital from local banks was quite a challenge in the Philippines, so we turned towards the international private equity market.
In 2019, Buskowitz also launched its signature Solar Home systems, which allows clients to select from a plug-and-play package based on their average monthly electricity bill online with flexible payment terms—allowing residents the option to easily invest in solar as well.
Today, with the prevalent impacts of climate change, as well as the economic struggles brought about by the pandemic, more and more entrepreneurs and residents are looking to invest in solar to help lower their electricity bills and to find more sustainable solutions.
4. Please brief our readers about the Rooftop projects that you have undertaken.
Being one of the major players in the Philippines’ rooftop solar industry, Buskowitz has developed, financed, engineered, and constructed over 200 solar rooftop projects around the country to date, with a total capacity exceeding 20 MWp. Buskowitz has installed on and provided solar for international brands such as Coca-Cola, Lufthansa Technik, Shell; as well as other local industry giants such as Petron, SM Mall, Robinson’s Malls, NLEX, or Metropacific Investments, and Megaworld Corporation, among others.
5. How has the Renewable Energy sector dynamics changed over the last 5 years in the Philippines?
The renewable energy sector is an ever-growing industry in the Philippines as of late. Due to the recent increase in power outages brought by manual load dropping, the interest to invest in RE has increased. Furthermore, as the COVID-19 pandemic continues to leave an impact on the Philippine economy, many are looking for other means to save money and many now recognize the cost benefits of going solar and savings somewhere between 15-50% of their energy costs.
Regardless of cost, climate change plays a huge part in the issue. With the adoption of the Green Energy Option Program as part of the R.A. 9513 (Renewable Energy Act of 2008)–allowing businesses operating on at least 100 kWp to source their electricity from a renewable energy source–more and more corporations are making the switch to fully divest from coal. Furthermore, the Philippines’ Department of Energy’s recently implemented Republic Act No. 11285
also continues to push more SMEs to opt for green alternatives. Entities operating with at least 100,000 kilowatt-hours per month—those generating an average monthly bill of at least $15,800—are mandated to meet the Department of Energy’s requirements to adopt energy-efficient systems and practices.
With this new mindset, coupled with the recent green initiatives implemented by the government, as well as the new opportunity for foreign entities to put up and invest in renewable enterprises, we hope to speed up the growth in RE infrastructure in the Philippines.
Finally, since the Philippines is made up of more than 7,000 islands, distributed energy resources (DER) systems that are not dependent on the transportation of fuel are well-suited to the country’s geographic profile. This reduces the need for extra-long transmission lines that can be exposed to intense storms or other natural disturbances and significantly increase transmission costs. DERs, especially those backed by batteries, can provide on-site power and fast backup power during calamities, making the energy system more resilient.
6. How is your company gearing up to face the next year 2022? What can we look forward to?
Buskowitz Energy currently has 40 MWp in the pipeline this 2022, for both its commercial and residential installations. The sustainable solutions enterprise plans to expand its capacity by launching its first utility-scale project; offering a new line-up of off-grid systems for its residential clientele, and finally jumpstarting more additions to its Demand Side Management services.
Buskowitz hopes to continue developing a large sustainable asset and infrastructure base not only for its own development interests but to continue to contribute to the low carbon future initiative while servicing the growing energy demand and challenges facing the Philippines and Southeast Asia Region.