Singapore Startup Seeks to Give Solar Power a Competitive Edge
(Bloomberg) -- A Singapore startup is seeking to connect potential buyers and sellers of solar power directly.
Electrify Pte’s platform lets owners of homes and businesses bid and offer rates for specific amounts of electricity. By selling directly to users rather than the grid, solar owners can get more money for their power, while consumers avoid paying a premium for renewable energy.
The platform underscores how cheap solar, with its ability to be installed just about anywhere with a roof, is challenging the decades-old model of power grids that deliver electricity one way from plants to homes. It’s also allowing smaller players to join massive utilities in profiting from differences in electricity prices.
“Power grids are old and designed for centralized generation, but that’s changing,” Martin Lim, the chief executive officer of Electrify, said in an interview.
Electrify’s marketplace can benefit both those with solar roofs as well as people and businesses who want to support green energy, Lim said. The company is testing the platform with a one-year pilot program in Singapore involving 100 people and businesses.
Homes and businesses in Singapore that have rooftop solar sets that produce excess power can currently sell it back into the grid at near wholesale prices, which is usually well below the retail price most customers pay for their electricity.
Electrify allows them to offer it at a higher rate, Lim said. He currently advises users to price deals around the retail price.
When a consumer and producer agree on a rate, they sign a six-month deal, and Electrify uses meters installed at both sites to determine total sales over the length of the contract.
For buyers, it allows them to say they’re paying for solar power, which is important to some climate-conscious people and a growing number of businesses trying to prove their green credentials.
The arrangement should allow solar owners to increase revenue, which could lead to increased rooftop builds, said Jenny Chase, head of solar analysis for BloombergNEF. However it likely won’t drive a huge expansion, as solar owners prefer long-term contracts to mitigate their investment risks.
Electrify, which attracted a small investment from Tokyo Electric Power Co. in 2018, is partnering with Senoko Energy for its Singapore pilot. The company is also in talks with governments and utilities in places like Australia and Thailand.
The company is currently charging a 5% transaction fee for energy exchanged on its platform during the pilot. It wants to capture a 20% market share of solar energy transacted in Southeast Asia by 2025, and envisions generating around $20 million in annual revenue by that year, Lim said.
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