Hong Kong warms to solar power, but how many people can afford rooftop panels — or even a roof?

Proposal to reward residents who produce clean energy sees some daylight as surveys show city is open to bearing costs of a shift to sustainability

PUBLISHED : Saturday, 28 April, 2018, 10:02am
UPDATED : Saturday, 28 April, 2018, 11:10am

While fossil fuels serve more than 70 per cent of Hong Kong’s energy needs, a village house in Tai Po may hold the key to a sustainable future for a city notorious for excessive consumption. 

Eddie Chan Wai-lai, 61, built his own home solar power system from scratch back in 2008, armed only with his love for the environment and electronics engineering knowledge from his college days.

“As an environmentalist, I have longed for years for the government to see the potential of renewable energy. 

“To name a few obvious benefits, not only does it save money, it’s also good for the environment and public health as it can reduce air pollution in the city,” he says.

The retired software programmer says of his home-made installation: “I consume an average of 17 kilowatt-hours (kWh) per day, and the solar power system supplies 3 to 4 per cent of this.

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“My panels are off the grid, which means it’s a stand-alone system that stores the unused energy in batteries. So when we are not home and the sun is shining, it will save the excess power for later use.”

Chan’s strong belief in his cause means he is mentally prepared for the price of his clean energy lifestyle – he has spent more than HK$130,000 (US$16,600) on the installations. 

“Going into this, I knew very well there was nearly no chance that I would recover the money I had put into the system. The only payback was the amount saved from traditional electricity, which was only a few thousand dollars over the years,” he says. 

Going into this, I knew very well there was nearly no chance that I would recover the money I had put into the system.
Eddie Chan, retiree

But Chan may finally be rewarded for his efforts. From as early as May, businesses or households such as his that produce renewable energy through rooftop solar panels can sell their excess supply to the city’s power grid, at up to five times the market rate. 

The clean energy produced will be sold to two power companies in the city: CLP Power, which supplies electricity to Kowloon, the New Territories and Lantau; and HK Electric, which covers Hong Kong Island.

The proposal by the Environment Bureau was submitted to the Legislative Council environmental affairs panel on April 16. The plan suggests that payment to independent producers – known as the feed-in tariff – would be set at between HK$3 and HK$5 per kWh of energy. 

“The high rate is very appealing, which will really encourage those who live in village houses with rooftops,” Chan says. 

With the feed-in tariff, Chan estimates that it would take about eight to nine years for him to recoup his initial investment.

“An installation of 12 to 16 solar panels, together with the batteries and manpower, would cost around HK$110,000 to HK$120,000 to set up. The system can produce 4,000 kWh of energy every year, so if the power companies buy this at an average rate of HK$4 per kWh, then each producer would be paid around HK$12,000 annually,” he says. 

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Chan will work with officers from CLP Power for the next few months to ensure that the quality of the electricity he produces is up to standard.

“Before supplying to the power grid, safety has to be confirmed, including factors such as interference, frequency and voltage,” he says, referring to how his panels will be converted to enable the move.

Chan is not alone in his quest for clean energy. According to a survey by the local branch of international green group WWF, a total of 69 per cent out of 721 respondents said they would be motivated to install their own solar photovoltaic electricity generators if the payback period was less than nine years.

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The study, conducted between December 2017 and January this year, also revealed that up to 72 per cent of those polled were willing to install a system at home following the implementation of the tariff.

During a recent Legco meeting, representatives from CLP Power and HK Electric confirmed they would roll out the scheme as part of their newly amended regulatory framework with the government in October and next January respectively.

Within a week of the announcement, more than 300 renewable-energy-generating customers connected to CLP’s grid, and the company received at least 100 related inquiries. 

Meanwhile, HK Electric has received 18 inquiries on the scheme, with more than 80 customers connected to its grid.

Solarising communities

The idea of generating electricity from rooftop solar panels is not entirely new. In 2016, WWF launched a project called Solarising Communities in the fishing town of Tai O in the west of Lantau Island.

The pilot scheme involved installing on-grid solar systems on three stilted houses with south to southwest-facing rooftops. 

“The systems generated between 6,000 and 7,000 kWh of clean energy every year for household appliances and community lighting systems,” says Olivia To Pui-wai, assistant project manager for sustainability at WWF. 

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She adds that based on the project, it is believed that small-scale rooftop solar power systems can supply at least a third of an average household’s electricity needs, which can reduce power bills by between HK$2,100 and HK$2,500 annually. 

However, To points out that while the government’s feed-in tariff scheme will entice residents to invest in renewable energy, the burden will fall mainly on those living in village houses.

“There are only so many families that can make such purchases. The problem is that those with rooftops may not have the money to do so, while those who are interested may not live in a village house.” 

Those with rooftops may not have the money to do so while those who are interested may not live in a village house
Olivia To, WWF

To suggests that the government provide subsidies for the initial costs of installation and for day-to-day maintenance to encourage more village house residents to adopt solar power. 

Green costs

Meanwhile, concerns have been raised over whether the two power companies can offset costs for the feed-in tariff, or if they will pass these on to non-solar power consumers.

Secretary for the Environment Wong Kam-sing assured the public last Tuesday that the impact on power bills would be less than 1 per cent. 

Energy economist Dr William Yu Yuen-ping from World Green Organisation, an NGO, agrees with Wong.

“Hong Kong consumes about 40 billion kWh of electricity a year, and a normal home with solar panels can produce around 1,560 kWh of renewable electricity annually. So depending on the total number of participants, I would say the influence is minimal.” 

A WWF study also found that Hongkongers would accept up to a 5 per cent increase in costs for the sake of the environment. 

Yu remains optimistic about the number of participants. He says he expects to see a few hundred installations in the first year of the scheme. 

A ‘win-win situation’

Tom Ng Hon-lam’s family is among those in Hong Kong considering installing their own solar energy system after assessing the costs and benefits. The Ngs are willing to spend about HK$52,000 for a typical domestic 1.5 kilowatts-peak (kWp) system. Kilowatt peaks are a unit of measurement for peak power output.

“The system can generate between 1,200 and 1,600 kWh of power, meaning the payback period will be around six to eight years,” Ng says. 

According to WWF figures, up to 50 per cent of a Hong Kong household’s annual energy needs can be met with its own solar power system. 

“Taking up around 270 sq ft of roof space, a typical 2.5 kWp system would cost about HK$87,500 and generate 2,250 kWh of power every year ... This can meet half the needs of an average Hong Kong household of four,” WWF’s Olivia To says. 

“It’s really a win-win situation – those who have the space to install their own systems can also use this as an investment and profit from it,” she adds. 

The move is expected to benefit those living in village houses with rooftops – about 180,500 families, according to 2017 data from the Census and Statistics Department.

“There’s one rooftop for every three village flats, so if all 60,100 rooftops install a solar power system, this can supply 2.1 per cent of the city’s electricity needs, equivalent to what a gas-powered station can generate,” she says.