Solar leasing firm aims to enlighten customers

Singapore - the commercial use of solar energy was a relatively new concept in the 1980s, and Singapore, is still a developing country, had to embrace even so-called green energy on a large scale.

But not to stop, the local operation Sunseap group mind, a punt, the free energy from the Sun supplied would prove a long-term money spinner.

The company manufactured systems for German partners. Government subsidies in Germany for green energy at that time ensured cash for partners - and continued business for Sunseap.

These systems with solar panels on the roof of the premises, where electricity is supplied, and placed in other open spaces were sold and used extensively in Europe at this time.

Sunseap was then in 2010 with more Singapore companies have another niche jumped on the green energy,. Rental of solar power systems for companies in Singapore, who are unwilling to fork out millions of dollars in advance, includes such systems can cost.

The business model is structured, that customers will pay per unit of electricity produced, with few or no cost for the equipment to rent. The current is cheaper than electricity purchased from the grid that make more attractive business for customers.

It means no large down payment, because the cost of solar power to the customer about the length of the lease, spread is usually 20 years.

"This model comes from a need of the industry here," said Mr Frank Phuan, Director of Sunseap leasing - the subsidiary of the Group solar leasing dedicated.

He said, as current expensive in Singapore, customers are keen to find a cheaper alternative.

Sunseap is able to make a profit, offer even after a modest discount to the price of electricity here.

The company is not in a position to make a profit, if you grant a discount on these prices would be in countries with lower electricity rates. The solar energy systems providing it delivers usually 15 to 20 per cent of customers makes, Mr. Phuan is estimated to come from the national power grid with the rest of the stream.

The leasing business is a recurring source of revenue, while revenue from the current manufacturing business sales of systems is dependent on.

Sunseap the production facility is located in a commercial district of Boon Lay way and employs about 30 staff. Sunseap leasing has an another eight employees.

Manufacturing said in about $5 million revenue per year, Mr Phuan, 37, whose father founded the company and is responsible for the manufacturing business.

Sunseap has $28 million to $56 million worth of contracts in Singapore, achieved 20 years over the length of the deals typically lease. There is a selection in the revenue values as will depend on the actual sales of electricity tariff rates.

A constant challenge for Sunseap is attempting with technological changes in the field of green energy to keep Mr Phuan said.

A more significant challenge over the years is to change the mentality of consumers.

"People always feel that solar energy is more expensive than energy from the net", said Mr Phuan. "But we've tried to educate them."

The cost of solar electricity competitive is compared to the power from fossil fuels, said Mr Phuan, reflected in the fact that Sunseap leasing can offer a modest discount to the prevailing power tariff. "If we give these savings from the first day, it's an easy sell," he said.

In 2011, the company received a boost from the Government.

Sunseap soaked the solar lease agreement with the Housing Board to some blocks in Punggol makes. It has since further agreements with the HDB.

The company wants to take its leasing model overseas. It opened a branch in Australia last year and is in talks with the State Governments to lease solar panels.

It is also in talks with Malaysia and Japan partners and hopes to have projects in these countries until the end of the year.

The Singapore market will grow Sunseap. By focusing on government agencies and large enterprises, the company now landed its systems for smaller companies and also owns residential property to lease. In January, it soaked a lease contract with a small company in the food and beverage industry.

The ultimate goal is the leasing business on the stock exchange. The business of manufacturing is kept secret.