High costs slowing Sri Lanka’s push toward solar energy

Sri Lanka’s President Maithripala Sirisena
Updated 24 September 2016
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High costs slowing Sri Lanka’s push toward solar energy

COLOMBO: An ambitious plan by the Sri Lankan government to outfit 100,000 homes with solar panels, to turn them into power producers for the national grid, may be too expensive for many families to afford, experts warn.
Sri Lanka’s government this month launched a “battle for solar energy” that aims to add 220 megawatts of clean power to the country’s energy grid by 2020, or about 10 percent of the country’s current daily electricity demand.
By 2025, the country hopes to boost its solar power output to 1,000 megawatts to meet fast-growing power needs, said President Maithripala Sirisena.
The president, who launched the initiative, said the plan called for solar panels to supply all the energy needed at the president’s residence, and that the country was committed to meeting growing energy demand with clean energy.
But shifting away from coal and other fossil fuel power to renewables — the country’s goal, according to Ranjith Siyambalapitiya, its power and energy minister — will be a challenge, the officials admitted.
Solar power has the potential to meet 32 percent of Sri Lanka’s annual power demand of around 10,500 gigawatts — but so far just 0.01 percent of that potential has been developed, according to the Sri Lanka energy sector development plan for 2015-2025.
Today about 3 percent of Sri Lanka’s energy demand is met by renewables such as wind and solar. Hydropower provides about half of the country’s electricity during the wet season but during the dry season, between August and October, 81 percent of the island’s power needs are met by fossil fuels, over half of that from coal.
“Solar is still not very popular because entry level costs are high and it does not make economic sense to low-end consumers,” said Thusitha Sugathapala, an energy specialist at the University of Moratuwa.
The cheapest entry-level home solar panel installation costs over 200,000 Sri Lanka rupees, or about $1,370. That’s because the materials must be imported, and face import duties, Sugathapala said.
Even larger users of household power, by comparison, pay only around Rs 5,000 ($34) a month in electricity bills.

THE SUBSIDY PROBLEM

Sugathapala, who previously worked on energy issues in the government, said household that use small amounts of electricity are also heavily subsidised by richer households.
For the smallest-scale users, of 1 to 30 units of electricity a month, electricity costs Rs. 7.85 a unit, while large household consumers — those above 180 units — pay Rs. 45 per unit.
The potential loss of that subsidy for poor households is one barrier to faster uptake of solar energy, Sugathapala said.
Tharanga Dissanayake, a computer programmer whose household in Moratuwa, south of Colombo, uses an average of 200 units of electricity per month, said that investing several hundred thousands rupees on solar energy panels was not a smart option for him.
“It would be at least four years before I recoup my investments. That is too long and I may have to spend on repairs,” he said.
Under the current effort to promote household solar installation, the government has offered to buy electricity generated by household solar panels at about Rs. 22 per unit. The scheme also offers households low-interest bank loans to buy the equipment, with a repayment period of seven years.
But experts like Sugathapala feel that more incentives will be needed to persuade families to shift to solar.
“If we are to make solar attractive, then ideally there needs to be more attractive incentives,” he said, including things like cheaper costs for panels, free installation, government help in maintaining panels and a higher government payment for solar energy produced for the national grid.
He said Sri Lanka has historically looked to the least expensive option to generate power, to hold down costs for consumers. Currently, because the cost of imported solar equipment is high and coal is relatively cheap, coal is the cheapest option — as long as issues like the environment and health aren’t taken into account.
At current rates, a kilowatt of electricity generated using solar panels costs Rs 23 while an average coal-generated kilowatt costs Rs 15, according to Sugathapala and data from the Ceylon Electricity Board.
Energy minister Siyambalapitiya said pressure to keep electricity prices low for consumers meant shifting to cleaner energy was unlikely to be cost-effective in the short run, Thomson Reuters Foundation reported.


Huawei first-quarter revenue grows 39% to $27 billion amid heightened US pressure

Updated 24 min 56 sec ago
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Huawei first-quarter revenue grows 39% to $27 billion amid heightened US pressure

  • The world’s biggest telecoms equipment maker also said its net profit margin was around 8 percent for the quarter
  • Washington has intensified a campaign against Huawei, alleging its equipment could be used for espionage

HONG KONG: Huawei Technologies said on Monday its first-quarter revenue jumped 39 percent to 179.7 billion yuan ($26.81 billion), in the Chinese technology firm’s first-ever quarterly results.
The Shenzhen-based firm, the world’s biggest telecoms equipment maker, also said its net profit margin was around 8 percent for the quarter, which it added was slightly higher than the same period last year. Huawei did not disclose its actual net profit.
The limited results announcement comes at a time when Washington has intensified a campaign against unlisted Huawei, alleging its equipment could be used for espionage and urging US allies to ban it from building next-generation 5G mobile networks.
Huawei has repeatedly denied the allegations and launched an unprecedented media blitz by opening up its campus to journalists and making its typically low-key founder, Ren Zhengfei, available for media interviews.
The Chinese firm, which is also the world’s No. 3 smartphone maker, said last week the number of contracts it has won to provide 5G telecoms gear increased further despite the US campaign.
By the end of March, Huawei said it had signed 40 commercial 5G contracts with carriers, shipped more than 70,000 5G base stations to markets around the world and expects to have shipped 100,000 by May.
Huawei’s network business saw its first drop in revenue in two years in 2018. But Ren Zhengfei said in an interview with CNBC earlier this month that network equipment sales rose 15 percent while sales of the consumer business increased by more than 70 percent in the first quarter.
“These figures show that we are still growing, not declining,” Ren said.
Guo Ping, rotating chairman of the company, has said he expects all three business groups — consumer, carrier and enterprise — to post double-digit growth this year.
Huawei also said on Monday it had shipped 59 million smartphones in the first quarter. It did not disclose year-ago comparable figures, but according to market research firm Strategy Analytics, Huawei shipped 39.3 million smartphones in the first quarter of 2018.