Singapore has set ambitious climate goals as part of its Green Plan 2030, aiming to reduce emissions and transition to cleaner energy sources. To accelerate this transition, the government has implemented a range of financial incentives and support programs for businesses and individuals investing in renewable energy. This comprehensive guide explores the various grants, subsidies, tax incentives, and financing options available for green energy adoption in Singapore.
The Singapore Green Plan 2030
Before diving into specific incentives, it's important to understand the broader policy context. The Singapore Green Plan 2030 is a nationwide movement to advance Singapore's national agenda on sustainable development. The plan has set several targets related to renewable energy:
- Quadruple solar energy deployment to at least 2 gigawatt-peak (GWp) by 2030
- Reduce energy consumption in HDB towns by 15% by 2030
- Green 80% of buildings (by gross floor area) by 2030
- Reduce waste sent to landfill by 30% by 2030
- Phase out internal combustion engine vehicles by 2040
To achieve these targets, the government has introduced various financial incentives and support schemes to make green energy investments more attractive and accessible.
Key Government Agencies Offering Green Incentives
- Energy Market Authority (EMA): Regulates the electricity and gas industries and promotes competition in the energy market
- Building and Construction Authority (BCA): Promotes green buildings and energy efficiency in the built environment
- National Environment Agency (NEA): Implements and enforces environmental policies
- Economic Development Board (EDB): Promotes business and investment opportunities in Singapore
- Enterprise Singapore: Supports business growth and transformation
- Housing & Development Board (HDB): Develops public housing with integrated renewable energy solutions
Solar Energy Incentives
Solar energy has been identified as Singapore's most viable renewable energy source. The government has introduced several incentives specifically targeting solar adoption:
1. Solar Nova Program
SolarNova is a whole-of-government effort led by the Economic Development Board (EDB) and Housing & Development Board (HDB) to accelerate the deployment of solar photovoltaic (PV) systems in Singapore. The program aggregates demand for solar PV across government agencies to achieve economies of scale, making solar installations more cost-effective.
Under this program, HDB has committed to installing solar panels on the rooftops of public housing blocks. As of 2023, solar panels have been installed on more than 2,700 HDB blocks, with a target of 8,400 blocks by 2030.
2. Enhanced Central Intermediary Scheme (ECIS)
The ECIS simplifies the process for small solar PV generators to receive payment for the electricity they export to the grid. Under this scheme, solar PV owners can sell excess electricity back to the grid at prevailing market rates without having to become a market participant.
This scheme is particularly beneficial for small businesses and residential property owners who may not have the resources to participate directly in the electricity market.
3. Solar Capability Scheme (SCS)
The SCS supports the adoption of solar PV systems by local companies and Town Councils. It provides funding for up to 30% of the total qualifying costs of solar PV installations, capped at S$1 million per project.
The scheme aims to encourage the deployment of innovative solar PV systems and help local companies build capabilities in solar energy.
"The government's support for solar adoption has been crucial in making our shift to renewable energy economically viable. The Solar Capability Scheme allowed us to install a 200kW system on our manufacturing facility, reducing our carbon footprint and electricity bills significantly."
- Tan Wei Ming, Operations Director, Singapore Electronics Manufacturing
Energy Efficiency Incentives
While renewable energy generation is important, improving energy efficiency is equally crucial for reducing overall energy consumption and carbon emissions. Singapore offers several incentives to promote energy efficiency:
1. Energy Efficiency Fund (E2F)
The E2F, administered by the National Environment Agency (NEA), supports industrial facilities and buildings in improving energy efficiency. The fund provides grants for:
- Resource-efficient facility design (up to 50% of qualifying costs)
- Energy-efficient technologies adoption (up to 50% of qualifying costs)
- Energy management information systems (up to 50% of qualifying costs)
- Energy efficiency assessment (up to 50% of qualifying costs)
2. Green Mark Incentive Scheme
The Building and Construction Authority (BCA) administers the Green Mark Incentive Scheme to encourage building owners to achieve higher Green Mark ratings. The scheme offers:
- Cash incentives for achieving Green Mark Gold and above
- Co-funding for retrofitting works to improve energy efficiency
- Technical assistance for energy audits and implementation of energy efficiency measures
- Recognition and publicity for green buildings
3. Productivity Solutions Grant (PSG)
The PSG, administered by Enterprise Singapore, supports companies in adopting pre-approved energy-efficient equipment and solutions. The grant covers up to 70% of the costs of energy-efficient technologies, with a maximum of S$30,000 per company.
This grant is particularly relevant for SMEs looking to reduce their energy consumption and operating costs through the adoption of energy-efficient technologies.
Tax Incentives for Green Investments
In addition to direct grants and subsidies, Singapore offers various tax incentives to encourage green investments:
1. Investment Allowance Scheme for Energy Efficiency Projects
Companies that invest in energy-efficient equipment can claim an investment allowance of up to 100% of the qualifying capital expenditure. This allowance is in addition to the normal capital allowance, effectively allowing companies to claim tax deductions of up to 200% of their investment in energy-efficient equipment.
2. Accelerated Depreciation Allowance for Energy-Efficient Equipment and Technology
Companies can write off the capital expenditure for qualifying energy-efficient equipment over one year instead of the standard three years. This accelerated depreciation significantly reduces the payback period for investments in energy-efficient technologies.
3. Carbon Tax Rebate
Singapore introduced a carbon tax in 2019, currently set at S$5 per tonne of greenhouse gas emissions. The tax will increase to S$25 per tonne in 2024 and S$45 per tonne by 2026. To offset the impact of the tax, companies that reduce their carbon emissions through renewable energy or energy efficiency improvements may be eligible for rebates.
Financing Options for Green Energy Projects
Beyond grants and tax incentives, Singapore has also developed innovative financing mechanisms to support green energy investments:
1. Green Loans and Green Bonds
Financial institutions in Singapore offer green loans specifically for renewable energy and energy efficiency projects. These loans often come with preferential interest rates and longer tenors. Additionally, the Monetary Authority of Singapore (MAS) has introduced the Sustainable Bond Grant Scheme to support the issuance of green bonds.
2. Energy Performance Contracting (EPC)
EPC is a financing mechanism that allows building owners to implement energy efficiency improvements with no upfront capital investment. An Energy Service Company (ESCO) finances and implements the energy efficiency measures, and the cost savings from reduced energy consumption are used to repay the investment.
3. Solar Power Purchase Agreements (PPAs)
Under a solar PPA, a solar developer finances, builds, and maintains a solar PV system on a customer's property. The customer agrees to purchase the electricity generated by the system at a predetermined rate, typically lower than the retail electricity tariff. This arrangement allows customers to benefit from solar energy without any upfront investment.
Chiass Inc offers solar PPAs as part of our renewable energy solutions, allowing businesses to adopt solar with zero upfront costs while immediately reducing their electricity bills.
Incentives for Residential Properties
Individual homeowners can also benefit from various incentives for green energy adoption:
1. HDB Solar Leasing Scheme
For HDB residents, the Solar Leasing Scheme allows Town Councils to install solar panels on HDB rooftops without any upfront costs. The electricity generated is used to power common areas and services, with the resulting savings passed on to residents through reduced Service and Conservancy Charges (S&CC).
2. Residential Energy Efficiency Scheme
This scheme provides subsidies for HDB households to adopt energy-efficient appliances. Low-income households can receive higher subsidies, ensuring that energy efficiency benefits are accessible to all segments of society.
3. Electric Vehicle (EV) Early Adoption Incentive
While not directly related to renewable energy generation, the EV Early Adoption Incentive supports the transition to electric vehicles, which can be powered by renewable energy. The incentive provides a rebate of up to 45% on the Additional Registration Fee (ARF) for electric cars and taxis, capped at S$20,000.
How to Apply for Green Energy Incentives
Navigating the various incentive schemes can be complex. Here's a general guide on how to apply for the main incentive programs:
Grant Application Process
- Determine Eligibility: Check the specific eligibility criteria for each grant program. Some grants are limited to certain sectors or business sizes.
- Prepare Documentation: Gather the necessary documentation, including project proposals, cost estimates, and expected energy savings or renewable energy generation.
- Submit Application: Submit your application through the relevant agency's online portal. Most grants now have digital application processes.
- Assessment: The agency will assess your application based on technical feasibility, cost-effectiveness, and alignment with program objectives.
- Implementation: If approved, implement the project according to the proposed timeline and specifications.
- Reporting: Provide progress reports and final documentation to claim the grant disbursement.
Key Websites for Green Energy Incentives
Maximizing Benefits from Incentives
To get the most out of the available incentives, consider the following strategies:
1. Combine Multiple Incentives
Many of the incentive schemes can be combined to maximize financial benefits. For example, a company could apply for a grant for the initial installation of a solar PV system, claim tax allowances on the investment, and use a green loan to finance the remaining costs.
2. Plan for Future Incentive Increases
Singapore's carbon tax is set to increase significantly in the coming years, which will increase the financial benefits of renewable energy and energy efficiency investments. Planning investments with this in mind can improve long-term returns.
3. Seek Professional Advice
The landscape of green incentives is complex and constantly evolving. Working with experienced consultants like Chiass Inc can help you identify the most relevant incentives for your specific situation and navigate the application process efficiently.
Case Study: Office Building Green Retrofit
A commercial office building in the CBD underwent a comprehensive green retrofit, including:
- Installation of a 200kW rooftop solar PV system
- Replacement of the HVAC system with a more energy-efficient alternative
- Implementation of an intelligent building management system
- Upgrading to LED lighting throughout the building
The total project cost was S$1.5 million, but the building owner was able to secure:
- S$300,000 from the BCA Green Mark Incentive Scheme
- S$200,000 from the Energy Efficiency Fund
- Tax allowances worth approximately S$300,000
- A green loan with a preferential interest rate for the remaining amount
With these incentives, the payback period for the entire retrofit was reduced from 8 years to just 3.5 years. The building also achieved Green Mark Platinum certification, enhancing its market value and attractiveness to tenants.
Conclusion: A Supportive Ecosystem for Green Energy
Singapore has created a comprehensive ecosystem of incentives and support schemes to accelerate the adoption of renewable energy and energy efficiency measures. From grants and subsidies to tax incentives and innovative financing options, these measures significantly improve the economics of green energy investments.
The incentives are designed to address different market segments and technologies, ensuring that the benefits of green energy are accessible to all—from large industrial facilities to small businesses and individual homeowners.
At Chiass Inc, we specialize in helping our clients navigate this complex landscape of incentives to maximize the financial benefits of their renewable energy investments. Our team of experts can provide guidance on eligibility, application processes, and combining different incentives to create the most cost-effective solution for your specific needs.
Contact us today to learn how we can help you leverage Singapore's green energy incentives to reduce your energy costs and carbon footprint.