In October last year, Renewable Energy Corporation ASA (REC), a market leader in solar energy, announced a landmark decision to set up its new world-scale integrated solar manufacturing complex in Singapore. Singapore was chosen out of 200 locations.

The investment, worth approximately S$6.3 billion (€3 billion), will incorporate wafer, cell and module production facilities, boosting the Norwegian solar energy giant's standing as a market leader in the solar industry.

In addition to solar wafer, cell and module production, the manufacturing complex will incorporate infrastructure and support facilities, as well as an on-site supplier park. When fully operational, the complex is expected to produce up to 1.5 gigawatts (GW) of solar products; in comparison, 2006's total worldwide output for such products amounted to around 2.5GW.

Equally important, the investment will lend impetus to Singapore's up and coming green energy industry. Erik Thorsen, CEO and President, REC, was in town late last year to kick-start work on the new plant, and share insights into the growing importance and potential of alternative energy.

Energy of the future

According to Thorsen, declining stock of fossil fuels, climate changes and increasing competitiveness of photovoltaic (PV) systems are key factors that will boost the usage of solar energy over the next century. In fact, the European Photovoltaic Industry Association expects about a billion people to use some form of solar electricity and up to two million jobs in the industry worldwide by 2020.

A main driver, however, to stimulate this demand for green energy is price. "If you, as a consumer, can buy green energy for the same price as you buy brown energy today, I think most of us would prefer to contribute to the environment," he says.

Experts expect the price of solar energy to drop to the level of conventional energy in many markets from 2010 onwards. This is also known as grid parity. "Energy prices vary in parts of the world, as such you reach grid parity at different stages in different markets," explains Thorsen. "It is going to happen gradually as supply is being ramped up and will obviously start happening first in markets with high energy prices. For instance, solar energy is now competitive without subsidies in parts of California and Japan because energy prices in those two places are relatively high."

Thorsen also stresses the importance of government subsidies and schemes to sustain the industry until it can become competitive and stand on its own feet. "Without subsidies, there will be either wind nor solar energy in use now," he says. "It is good to see that certain governments, especially in Europe and Japan, have had the foresight and have recognised the need to stimulate these kinds of innovation," he says.


Made in Singapore

Though a relatively new entrant, Singapore is one of the countries doing its part to fuel the alternative energy sector's development. In March 2007, the Research, Innovation and Enterprise Council (RIEC) announced that the Lion City will develop clean energy, with an emphasis on solar, as a key growth area. To this end, the government announced a package totalling S$350 million (US$228 million), with the aim to intensify innovative R&D and capability development in the industry.

In addition to such efforts, Singapore's stable infrastructure, highly skilled workforce and strong semiconductor industry, which is similar in terms of skills set and technology know-how required for solar manufacturing, are some reasons behind REC's decision to set up its plant here. The country's established track record in developing chosen industries is another draw. "Once the Singapore government decides to develop a new industry, it has proven to have a very strong capability of doing so, like in the biomedical and electronics sectors," says Thorsen.

Given these strengths, it is clear why Thorsen is optimistic. "We believe that in a relatively short time, solar will be competitive," he says. "We see Singapore as an ideal spot for REC to bridge into the Southeast Asia market, which we believe will be an attractive market for solar in the long-term."