Green developers get S$20m fund (Singapore)

March 4, 2008 (Today Online) – Developers of new and green buildings can now tap into a S$20 million fund set up by the Government – a decision that is certain to sit well all-round as oil prices continue to surge.

The fund will partly offset the cost of integrating solar panels into new buildings “which attain a certain level of Green Mark standard”, Mr S Iswaran, the Minister of State for Trade and Industry (MTI) told Parliament yesterday.

Under a 2005 scheme, buildings that meet environment sustainability standards will be Green-Mark-certified by the Building and Construction Authority of Singapore.

“This (Solar Capability Scheme) is a grant-based incentive, to spur more innovative approaches and capability development, in the architecture, design and system integration of solar panels as part of green buildings,” he said, adding that more details would be released soon by the Economic Development Board.

It is part of the Republic’s drive to encourage the adoption of renewable energy amidst concerns of high-energy costs fuelled by spiralling oil prices.

While the Government will encourage the use of solar energy through incentives and lowering grid connection fees, Mr Iswaran stressed that it will, however, stop at subsidising the cost of renewable energy through feed-in tariffs.

Fit is a form of energy subsidy where renewable energy companies are guaranteed contracts for energy produced at higher prices as compared to those from traditional sources.

The issue cropped up recently when Today ran a story on how the business community had urged MTI to consider Fit to promote the energy sector. MTI had argued against it, citing distortion to market and a possible increase in electricity prices.

Responding to a query from Nominated Member of Parliament Eunice Olsen as to how much more it would cost consumers with the adoption of Fit, Mr Iswaran said compared to a pool price of 22 cents per kilowatt, solar energy produced under Fit would be as high as “two to three times the cost, perhaps a little lower because oil prices have gone up now”.

He added that it was not an “optimal strategy because what we are effectively doing is encouraging solar”.

“The question is why solar when it can be bio-energy, bio-diesel and so on … why not subsidise others as well?” he asked.

Asked by Ms Olsen if MTI’s insistence against Fit for renewable energy is a reflection of its low priority for developing the industry, especially when tax credits are granted for expensive commodities like green cars, Mr Iswaran explained that the promotion of solar energy, or any other industry, can be done through other means.

Citing research and test-bedding initiatives such as the recently launched Solar Energy Research Institute of Singapore and the $170 million allocated to the Research, Innovation and Enterprise Council for Solar Research and Development that aim to develop alternative energy technologies, Mr Iswaran said such approaches “give better returns in the long run”.

“The right strategy is to help the industry get into a position of competitiveness vis-à-vis existing supplies of energy, but to subsidise it is to distort the market in terms of production and consumption decisions and we don’t think that’s the right thing to do,” he said.

Amid the ongoing debate, Singaporeans were hit again by the impact of higher oil prices – which hovered around US$102 per barrel yesterday – as Caltex raised its price for petrol and diesel by 4 cents a litre.

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