Since corporates have their own business issues to deal with during this pandemic, their priorities aren’t just solar or green energy, says Sol Props, Senior Delivery Director, Macquarie Group as he points out a temporary slowdown in the energy market.

Sharing his thoughts alongside other experts at the webinar, ‘Spotlight on Solar: Floating solar, rooftop solar opportunities in Southeast Asia’, Props mentioned, “Closing deals was very tough physically during the pandemic but our company managed to get a 1.3 gigawatt project in the Philippines online. Industry issues and more tariffs for corporates have created a burden. In Vietnam, it has been more about the corporate rooftops. Corporate PPAs and offsite corporate PPAs in rooftop solar PV markets will be our focus in the next few years. There are growing markets such as Korea, Arab countries, and Japan. The investments will be where land cost is lesser, agriculture land is scarce and low value industrial areas. Among challenges are cleaning the panels with detergents, raining environment, mud waste, marine growth. We require sufficient engineering to tackle marine growth. Money and engineering would help to cope up besides the development process and customizations.”

Lieu Dang, Partner, DNA Vietnam LLO shares his perspective in the context of Vietnamese market: “Vietnam is expected to have second-highest solar PV penetration in power generation in the region by 2030. From the beginning of the outbreak to the end of 2020, we managed to do 9 gigawatt of rooftop solar PV. The pandemic impacted certain businesses yet it hasn’t stopped individuals and corporates to tap opportunities. From the development side, the M&A market is active. People have difficulty in travelling to the country but we are still seeing positive responses through various means."

Milan Koev, Founder & CEO, Hexagon Peak says, “We are currently serving 4 countries and have achieved 50 megawatt of rooftop PPAs in Vietnam. We are now looking at other markets. Business wise traveling is not possible and doing the Capex intense projects online is of course not perfect but then there are technologies to service. The second aspect is global and looking at the bigger picture, this crisis has woken up a lot of people who weren’t considering climate change and environmental issues as a big concern. I see a lot of development in many big corporations committing to carbon emissions now. Perhaps it is the result of Covid-19 situation. In Vietnam, there is an upcoming project which is a significant development. We are currently dealing with industry level companies who are extremely eager to set up their contracts in order to secure their green energy supply. Pandemic has opened up new opportunities.”

Organized by Future Energy Asia, the discussion was moderated by Hendrik Bohne, Head of Business Development & Asset Management, Aquila Capital.

Rooftop Remains Popular Choice

Sharing a comparative account of floating solar PV and rooftop solar PV, Dang says, “Floating solar PV is encouraged by the government. The tariff is lower than rooftop and there are several projects that reached COD. There are 10 new projects under consideration. One of the challenges is that the developer has to pay a lot of cost and needs to be minimized. Earlier the cost was 9.3 cent per hour and has decreased to 7.69 cent. Hopefully, it will get reduced further. Comparatively, rooftop solar projects in Vietnam are not more than 1 megawatt and given the small scale and regulatory clarity, it is there to stay. Floating is for utility, rooftop is small scales. Rooftop is easy as the regulation for utility is yet to come in Vietnam. Uncertainty in case of floating is an issue. We need to wait.”

As per Props, any project on rooftop definitely wins on the financial front. “Rooftop will go ahead in the next five years. It is a tougher market and tough to find the contractors that are bankable. Construction business needs equipment guarantee. Financial institutions and insurance to improve too have to ensure scalability. We must remember that solar technology started in space and we can overcome all challenges.”

Milan Koev says, “From Southeast Asia perspective, there hasn’t been much development after the outbreak of the pandemic. Only exception is Vietnam where we have seen exposure to larger projects. It has significantly lower volumes than what it used to be. Lack of attractive subsidy has pushed a lot of developers to rooftop space. Situation on the revenue side is very attractive for rooftop. Since South Korea, Japan and Taiwan are running out of land, there are good opportunities in floating solar PV. At the same time, there is an issue of cost. We have to see a lot of tech improvements, floating cost and maintenance cost. These add to the Capex costs. The floats may be more expensive than solar panels. In coming areas we will see reduction of costs.”

Growth Drivers

Props bet big on the advantages of power purchase agreements (PPAs). He feels that 10-20 years of PPAs are aimed at building trustworthiness, and relationship between parties. “We can bring rigor in investment if the assets are attractive for corporations. There are huge volumes of corporate PPAs in India where corporates can buy huge volumes of energy with significant discounts and lower tariffs for 1 megawatt projects.”

Agrees Milan Koev who says the revenues and project returns are better in PPAs. “Private PPAs will not move beyond 1 megawatt and are without any government subsidy. Majority of developers moved utility to the rooftop due to higher returns.”

“We are involved in a couple of projects in South Korea, more on the offshore floating and seawater floating. The lakes have been low hanging fruit for solar PV to pick up but essentially to go through scale and create many industries within industries such as offshore. We are just a few years from reaching our goals. Bank finance and lack of data are challenges. For agreeing to finance the projects, banks are seeking data on technologies. Once more data comes in, we will see the finance and industry picking up,” sums up Koev.