Hong Kong households and businesses that produce renewable energy through rooftop solar installations or wind systems could soon sell their excess supply to the city’s power grid – and charge up to five times the current retail price.
An Environment Bureau proposal submitted to the Legislative Council environmental affairs panel on Monday said the payment to independent producers – known as the feed-in tariff – would be set at HK$3 (US$0.38) to HK$5 per kilowatt-hour (kWh) of electricity to spur investment in clean energy production.
The city’s two power companies, CLP Power and HK Electric, charge consumers about HK$1.12 to HK$1.15 per kWh.
The bureau said it had worked with an external consultant to study the appropriate feed-in tariff rates for renewable energy systems that could generate different amounts of energy to help recover the cost of their investments quicker.
“[The rates were set] with a view to enabling … owners to recover the cost of the system as well as installation, operation and maintenance costs in around 10 years,” it said.
The clean energy produced will be sold to both power companies – CLP Power, which supplies electricity to Kowloon, the New Territories and Lantau; and HK Electric, which covers Hong Kong Island.
‘More than half’ of Hongkongers can accept 5 per cent rise in power bills to support renewable energy
Consumers will not see a big surge in their monthly power bills – for now.
The power companies would offset some of the costs by selling “renewable energy certificates” to businesses, or even members of the public, who would pay for the certificates to lower their own carbon emissions or to meet corporate social responsibility commitments.
China’s solar panel industry faces a year of reckoning amid global protectionism, slowing demand at home
Only about 1 per cent of Hong Kong electricity is generated from renewables. The bureau has previously said renewable energy had the potential to provide 3 to 4 per cent of the energy mix.
With power production contributing almost 70 per cent of the city’s greenhouse gas emissions, environmental groups have urged the government to commit to using more renewable energy to reduce emissions, and to incentivise independent clean energy producers.
The move is expected to benefit those who live in village houses with rooftops the most.
With Hong Kong struggling to meet emission targets, village leaders are keen for solar energy. But they say the government needs to offer incentives first
A Baptist University study last year found a basic 1,500kWh rooftop solar panel installation – enough to power an average household over a year – would cost about HK$50,000.
Without feed-in tariffs, it would take about 30 years for the purchaser to recoup the initial investment.
The bureau’s proposed feed-in tariff rate would be HK$5 per unit for systems with a capacity below 10kW; HK$4 for those that can produce between 10 and 200kW and HK$3 for those producing between 200kW and 1 megawatt (MW). The rate for systems that can generate above 1MW will be decided on a case-by-case basis.
The paper will be discussed at the panel next Monday.
The idea came out of negotiations with the two power firms over a new 15-year regulatory framework, last year. The changes take effect in October and January, and the proposed feed-in tariffs will last until 2033.
Edwin Lau Che-feng, of the environmental group Green Earth, urged the government to purchase certificates and encourage private sector firms to do the same, especially blue-chip corporations.
Olivia To Pui-wai, assistant project manager for sustainability at WWF-Hong Kong, believed the tariff could, in time, push power bills up and urged the utilities to do more to mobilise corporations to purchase the certificates to offset potential increases.
“To maximise the public involvement, the government should set a solar target and facilitate seed capital funding or low-interest loans to respond to the concerns about high installation cost,” she said.
HK Electric and CLP welcomed the agreement and both said they would work to encourage the use of renewable energy, and promote energy efficiency in the future.
More from South China Morning Post: