Digitimes Research: Southeast Asia solar markets need subsidies to stimulate growth
Kristina Shih, DIGITIMES Research, Taipei [Thursday 8 November 2012]
Countries in Southeast Asia such as Vietnam, Malaysia, and the Philippines have sufficient sunlight hours which is suitable to develop a strong solar market.
Vietnam has relatively high sunshine hours of 2,067 hours per year but lacks government support, according to Digitimes Research. The country currently focuses on developing hydro-electric and wind power. Demand in the domestic market has been low, and by first-quarter 2012, accumulative solar PV system installations only reached around 1.6-1.8MW.
Malaysia relies on crude oil and natural gas to generate electricity and the rapidly depleting resources have been pushing the country to find other ways to generate electricity such as using renewable energy sources. The country targets the percentage of electricity generated by renewable energy to reach 11% before 2020 with total renewable energy installations reaching 3.14GW. Within the 3.14GW installation, 1.25GW has been set for solar PV installations. To prevent budget burdens, the government uses quotas for buybacks, and for 2012, the quota has been set at 282MW. Furthermore, to encourage individual households to adopt renewable energy, the government has set a solar PV system application quota of 8MW from fourth-quarter 2012 to fourth-quarter 2013. The government expects to add 2,000 new residential solar PV systems.
The Philippines has the highest electricity prices in Asia. Nevertheless, the development of its solar market has been slow. According to Digitimes Research, by the end of 2011, the majority of the 12MW total installations of solar PV projects had yet to connect to the grid. The government began buying back electricity at a rate of US$0.232/kWh in July 2012. Compared to the current electricity price of US$0.18/kWh, the feed-in-tariff (FIT) is quite high. But one of the major problems is lack of technology. Firms lack the funding needed from the government or financial institutes for further development.