The Straits Times –
4 MAR 08
Why no
subsidies for solar power
The government will
not subsidise solar power, Minister of State (Trade and Industry) S
Iswaran said on 3 Mar 08, This is
in line with its policy of not helping end-users pay for
energy.
However, it is
setting aside S$20 million for a Solar Capability
Scheme.
The fund will offset
part of the cost of installing solar panels in new, green
buildings. The Economic Development
Board will release more details soon.
Mr Iswaran was
responding to Nominated MPs Edwin Khew and Eunice Olsen, who
suggested subsidising solar power, which is costlier than energy from more pollutive
sources such as fossil fuels.
“Our basic policy
tenet,” Mr Iswaran said, “is that energy costs should be borne in
full by end-users. We do not subsidise
the cost of energy because it will dampen price signals and create
the incentive to over-consume.”
He added that the
Government should be consistent and not subsidise a specific type
of renewable energy.
Otherwise, questions
would be raised about why it subsidised solar power but not
bioenergy, or why it provided subsidies for energy but not other
goods.
It is thus better
for the Government to invest in research and developement to
develop technologies that will lower the cost of generating
alternative energy, Mr Iswaran
said.
There would then be
no need to talk about subsidies.
Subsidies are also
not sustainable in the long run, he said, noting that the
Government has instead encouraged competition to put downward
pressure on prices.
And consumers have
benefited, he said. To back his point,
he observed that the price of fuel oil had doubled since 2001, but
the electricity tariff for households has gone up by only 14
percent, even though fuel makes up 55 percent of the cost of
electricity generation.
Households will also
gain when the gas market is further liberalised.
Mr Iswaran noted
that tensions and trade-offs between energy security, economic
competitiveness and environmental sustainability, but stressed that
economic growth is the best response to the current uncertain
global energy outlook.
With growth,
Singapore will have the resources to secure its energy supply, keep
the environment clean and find new solutions.
The Government is
also diversifying its sources of energy, such as by importing
liquefied natural gas.
It has set up an
International Advisory Panel on Energy comprising top leaders,
eminent individuals and energy experts from around the
world.
To be chaired by Mr
Iswaran, the panel will meet for the first time in November as part
of the first International Energy Week here.