AsPac becoming a major market for solar modules

MANILA, Philippines - The fast-growing Asia Pacific region, which includes the Philippines, is becoming a more important market for makers of solar modules.

The Philippines, for its part, can take advantage of solar energy to reduce its dependence on diesel fuel and energize remote areas.

“Asia Pacific is becoming a more important market for solar manufacturers. The European market shrunk somewhat because of the reduction in feed-in tariffs (FITs),” said Ian Roger Smith, regional sales manager of solutions provider and solar panel maker Canadian Solar.

“The dynamic economy results in affordability. There is good sunshine and there is need for solar power in off-grid islands,” said Yan Zhuang, senior vice-president and chief commercial officer of Nasdaq-listed Canadian Solar.

The Philippines is also turning into a bigger market in the region.

Growing population, dependence on expensive diesel power generation and lack of power in remote areas will encourage more use of solar energy, Smith said.

“There is a great need for power in this country. There are 7,000 islands and some are very remote,” Smith said.

To date, the Nasdaq-listed firm has sold more than 2,000 solar home systems to remote areas in the country.

Canadian Solar’s distributor Green Power joined the government’s bidding for the supply of 6,000 solar lighting systems.

“In the Philippines, the FIT has now been implemented. Now we can concentrate on utility scale projects,” Smith said.

Canadian Solar will negotiate with engineering, procurement and construction (EPC) contractors for the supply of solar panels and total solutions.

To date, the company is in talks with EPC contractors for 30-megawatt (MW), 10-MW and five-MW solar projects, Smith said.

“We will also be promoting rooftop system in the Philippines like commercial buildings, banks and homes,” Smith said.

Last year, Canadian Solar generated $1.9 billion in total revenues from 16 overseas offices worldwide. The manufacturer claims to be in the top two in terms of solar module shipments worldwide.

For Southeast Asia, Zhuang said the company wants to provide solar modules and total solutions for 10-20 percent of the expected one gigawatt of solar power projects in the region.

To date, the only significant market is Thailand with a market size of 400-500 MW for solar, way above 70 MW for Malaysia and 40 MW for Indonesia.

Last year, the Department of Energy approved a 760-MW installation target for renewable energy projects that will enjoy guaranteed returns on investment under the FIT. Of these, 50 MW was allotted for solar projects.

Challenges for solar energy in the Philippines include the slow implementation of regulations, logistics and project financing.

“There is little experience [for solar energy] in the Philippines that banks are reluctant to lend money in an industry they do not know of,” Smith said, adding that banks are concerned with long-term viability of the business.

To date, the Philippines sources 35 percent its total power requirements from renewable energy sources.