Consulus – Sun Electric: A new business model to transform the solar power sector

Consulus – Sun Electric: A new business model to transform the solar power sector

Sun Electric is a company that specializes in solar energy solutions. The Columnist talked to Matthew Peloso, Founder & Managing Director of Sun Electric to find out more about how his businesses can transform the way we use energy.

When did your interest in solar energy begin?

I spent a number of years in areas of physics doing leading research, particularly in optics, where I loved the science but felt that our pursuits too advanced to find near term applications. I wanted to get involved in technology projects that can be implemented to solve problems we face now. At that time, I saw funding coming into the solar energy industry, and decided to refocus my research efforts. This was 2009, so it was seven years ago. That funding led me to a better understanding of the technology and allowed me to complete a few research projects, which helped immensely with my understanding of solar technology’s impact on the energy industry. This particular technology has an appeal in that sunlight is ubiquitous – it is attractive to think that we can capture light, which is pure energy, and put it to use.

Solar power has been around for a long time. Why isn’t it more mainstream and why don’t more people use solar power?

Solar has been very useful for the telecommunications industry and the space industry for a long time. In both cases, access to fuels near to the location of power demand is limited. Solar energy has emerged only within the past decade as a cost effective solution to provide energy to regular consumers. This trend has occurred given the scale of deployment along with rising costs of energy. The biggest interest comes from sovereign states who have limited resources. For example, Germany, Japan, and Singapore, while progressive environmentalism in other countries has provided an additional push of interest into solar. As the cost fell, the industry grew considerably.  However, this is arguably the beginning.

Most people don’t use solar power because it can’t provide 100% of their needs, and there are otherwise limited developments that effectively create the foundation to provide typical energy consumers with solar energy. The introduction of financing packages for clean energy is an important trend that will assist in the mainstream adoption of solar energy. The predominant business model today is the embedded generator which was mostly tailored for residential installations. This does not really provide an energy consumer with effective methods to manage their power demand, and is especially problematic in a commercial setting.

Moreover, many potential consumers would need to buy hardware to gain access to solar energy, or otherwise take financing for a project that is able to optimize their own level of solar energy consumption because their premises cannot provide for enough generation capacity for their own load profile. A solution is needed to allow for an effective amount of solar to be blended into a building’s utilization. In addition, deployment of infrastructure takes a lot of organization and time as the resources, in terms of space, need to be coordinated and gathered together. Also, conventional power purchase agreements force liabilities onto energy consumers who would enjoy very limited rewards. Often a PPA puts an energy consumer into a very long term liability and these PPA’s also require the consumers to pay extra money for solar energy, even though the claim to be discounted to the local energy grid prices.

I try to see these problems as opportunities, as the solutions that have been developed are opening new markets and benefits to people who are involved in solar energy. These problems define great opportunities for those who are able to be innovative during the early period of our industry.

Please share your thoughts about how solar power can make a difference for the environment.  The bottom line question is: Does solar power help lessen a building’s impact on adverse effects of climate change?

This is a complicated issue and providing a short definitive answer is quite difficult. Notwithstanding there is evidence establishing that carbon emissions do lead to global warming, solar energy’s greatest power for improving the environment is that there are no toxic emissions from a solar generator. Combustion of fuel releases toxins into the air. It’s not only carbon dioxide which should be of concern. When you burn fossil fuels like oil, or worse – coal, emissions of Sulphur or Nitrous gases pollute the air and cause lung disease and other ailments. These gases are being emitted nearby to your city, but if you deploy solar energy you can cut down on such emissions. In regard to carbon dioxide and global warming, absolutely, buildings that employ solar panels on their roof-space are improving the air quality in the city, and are helping to lessen the adverse effects of climate change.

Will solar power ever overtake traditional energy sources?

Solar power has an interesting place in the energy industry. It is a compliment energy source and is unlikely to be deployed anytime soon to overtake traditional energy. The reason is simple. Many renewables’ are non-dispatchable resources. Out of tech-speak, that means that they (solar generators) don’t turn on unless the sun is shining. Solar storage systems are required to allow a “pure” solar energy system which can provide power 24/7. And that can dramatically increase the cost. As such, only in remote situations are large back-up storage or hybrid solutions deployed.

However, as a complement to the city’s energy demand, solar can be introduced during day hours without adding any of the costs for storage. Solar has a major role to play in providing a component of the rising demand for energy because it is concentrated by about 5 times into the hours during which demand for energy is the typically the largest. In cities with industrial and commercial economies, people tend to use a bit more energy during day and so solar can help to supply to the peak demand of a city. This in turn can help to stabilize the rest of the energy market, which is provided for by conventional energy sources. It also dramatically improves on the power quality of an energy grid which is stressed and having brown outs and black outs. For some time to come humankind will rely on fuels for energy use, and natural gas (already used widely in Singapore) is considered to be an important bridge fuel. Solar will be blended along with these fuels to serve our energy demand and will play a major role in the world’s energy mix. It is happening today.

What can Asia’s role be as the technology advances?

Asia is home to a massive amount of manufacturing in the sector, and will for some time to come be a predominant location for manufacturing. In addition, Asia and South East Asia particularly is home to a growing population of individuals who are seeing their quality of life improve. In some of these regions, energy demand is growing and a lack of infrastructure investment has led to brown outs providing a lower quality of power to cities. This happens during peak demand hours. Although this economic environment provides an advantage to conventional energy providers who enjoy liquid demand for all fuels and energy that they generate, solar energy is the best medicine to help reduce brown outs in these cities.

It is also a very scalable technology and can be introduced in phases by deploying photovoltaic arrays at various regions of a cities power grid network. This in turn also improves the transmission factor of a power grid, so less electricity is lost. Asia is also very sunny and has minimal annual fluctuations in annual solar generation profiles since people are living near the equator. That means that it is a lot simpler to deploy solar to serve masses of energy consumers because there are less fluctuations in the annual energy generation capacity that is derived from solar energy. If any region of the world can benefit the most from solar, it is South East Asia, and particularly the densely populated cities in this sunny region.

Can a country like Singapore for instance, with its limited space, be a frontrunner of this technology?

Singapore already is home to a number of competitive initiatives, for example, some of the best performing solar modules made are manufactured in this country. In terms of deployment, there has been significant interest in Singapore to encourage the deployment of solar energy generators as embedded generation facilities behind the energy meter. However, there are a number of obstacles in the way of the progression of steady growth in solar under such a model. We believe that the kind of support that we are finding locally for a few new initiatives which overcome some of these obstacles shows that Singapore has a strong commitment to sustainability and interest in growth of the solar sector in the local energy mix.

Singapore has a few other features which make it interesting for implementation of solar. Singapore had experienced a brief encounter with “grid parity”. As well, Singapore’s electrical power system network is world class and potentially features one of the highest power qualities worldwide, while the energy market is both competitive and dynamic. Also, the requirement of implementing solar in buildings and in a densely populated city encourages specific technical expertise to be developed. Also, in this environment, the commitment to high quality technology challenges innovators. If you can compete directly in the energy industry with the utility majors, then I believe the systems and solutions developed will be regarded as one of the more progressive models for implementing solar energy in urban settings, and these technologies will be welcomed in other regions of the world.

Thank you very much for joining us.

This interview was conducted for The Columnist, a newsletter by Consulus that offers ideas on business, design and world affairs. The views expressed in this article are those of the interviewee and do not necessarily reflect the views of Consulus.