The Economics of Solar PV in Singapore

Abstract

This paper presents an economic and technical
analysis of the feasibility of solar photovoltaics (PV) in the
Singapore context. The Levelized Costs of Electricity (LCOE)
methodology is used to evaluate the cost of electricity generated
from solar PV systems over their economic lifetime. Using
reasonable estimates for key parameters, the model calculates the
break-even price – the price at which the costs of solar power are
just balanced by its revenues over the life of the equipment – to
be S26 ¢/kWh, on par with the average Singapore 2011 electricity
tariff rate. Module costs and the annual yield of solar PV systems
are found to be the main factors determining the LCOE. We
compare the LCOE across a range of technologies and find that
solar PV is both a more expensive means of electricity generation
than most other technologies, including combined cycle gas
turbines (CCGT) and coal, as well as an expensive means of CO2
emission mitigation. Projections of the LCOE of solar PV using
experience curves indicate that solar PV is likely to become more
cost-competitive relative to other technologies in the future.