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🌞 Happy Sunday y’all!

🗓️ Have you ever wondered how this day of the week got its name?

🌌 Well, it’s obviously dedicated to the sun, but the seven day week originates from the Babylonian practice of dividing years into weeks of seven days each with the days named after the five celestial bodies that were known to them at the time (i.e. Mars, Mercury, Jupiter, Venus, Saturn) plus the Sun and the Moon.

🏛️ The Romans then adopted this practice and it carried on until contemporary times. This is why in Latin-originated languages like Spanish the days of the week still retain this structure. However, in English, we only kept Sunday and Mo(o)nday, while switching out the other days of the week for Norse gods; for instance Thursday is named after Thor ⚡🔨 (Brittanica, 2023).

🌅 In this issue, we are going to explore the power of the sun and how it plays a critical role in our energy transition in Southeast Asia.

This time, we’re 🎵getting by with a little help from our friends🎶 too: our co-author and interviewee this week is Hsin Yao, the founder & CEO of the solar startup Helios, which we actually featured on our venture building issue a few weeks back. We hope that this is an illuminating read for you all!

🤔 What’s the deal with solar energy in Southeast Asia?

🗻 Southeast Asia (SEA) is only at the tip of the iceberg in terms of fulfilling its true solar deployment potential. According to the map below, SEA (along with its neighbor, South Asia) has amongst the highest potential for solar energy on the planet in terms of kilowatt hours per square meter (kWh/m² ), particularly in areas like east Indonesia and south Philippines, which can reach 2,200 kWh/m² *

*For reference, in 2023 the average household in Singapore used ~4,956 kWh of electricity per year (Energy Market Authority of Singapore, 2024), so assuming an industry average of 20% efficiency, you would only need around 12m² or a 3.5m by 3.5m array of solar panels to power an average Singaporean home in these high irradiation areas!

🌄 From utility scale solar farms alone, there is in excess of 120 gigawatts (GW) of committed solar capacity to be built in the coming years (Carbon Brief, 2024), and developers have been deploying rapidly…

🙅🏻‍♂️ However, the truth is that relying on solar farms alone has never been enough for any country on the planet and will never be enough on their own. Solar farms occupy significant amounts of land, often replacing agricultural land and competing with national food security agendas.

🧩 Transitioning to a net-zero economy will require a blend of renewable energy sources, including hydro and wind, as well as a healthy mix of utility-scale solar, commercial & industrial (C&I) solar and residential solar. The chart below shows the state of renewables—which includes solar, wind, hydro, etc—in SEA So far, they contribute less than 20% to the energy mix, with fossil fuels like coal, oil, and natural gas still dominating.

🏘️ Based on our proprietary research, we estimate that there are in excess of 80 million homes across SEA that are eligible for solar. At an average size of 5kWp* deployment, this adds up to a truly staggering 400GW of potential capacity - more than the committed solar farm capacity of the entire ASEAN bloc combined.

*note: kWp stands for “kilowatt peak” and measures the maximum output of a photovoltaic system; see this guide for more information 

🏢 To their credit, large corporates have led the way in the deployment of solar energy. Motivated to meet their internal ESG targets, large MNCs and local conglomerates have put up sizeable solar installation on the rooftops of offices, warehouses and commercial buildings, with sizes ranging from 50kWp to 200kWp. Solar developers also understand the C&I customer acquisition playbook well: offering long leases to commercial building owners, allowing business owners to pay less for electricity while ensuring healthy investment returns for solar providers.

🏠 In contrast, residential solar adoption in SEA is close to non-existent. Outside of a vanishingly small group of solar enthusiasts and wealthy, environmentally-conscious homeowners, familes across the region have yet to embrace solar in a meaningful way. More broadly, SEA is only developing a fraction of its prospective potential!

🥇 What people don’t realize is that we are actually living in the golden age of solar. Solar technology has never been better and the cost of solar has decreased a shocking 89% from US$2.32/watt to $0.22/watt. 22 cents per watt! (Our World in Data, 2024) Solar has never been more affordable.

🚀 As a result, solar adoption has skyrocketed among homeowners in more developed global markets. The US has installed in excess of 22GW of residential solar, while adoption rates in Germany, Netherlands and Italy, stands at 13%, 16% and 23%, respectively. The global leader in residential solar adoption remains Australia, which clocks in at a whopping 31% (POWER, 2022)

❓ So why the large disparity with countries in SEA vis-a-vis more developed countries? Like most consumer durables, it comes down to simple economics. While the cost of solar has decreased tremendously, it still remains out of reach for the average Southeast Asian homeowner. Take the Philippines, for example. With an average annual salary of ~US$9,000 and an average savings rate of 10%, it would take 9 years of savings to afford an average solar PV system priced at US$8,000. A financial impossibility, given a family’s competing needs to spend those savings on housing, transportation, healthcare and education.

🌞 This is exactly where Helios would like to help. To help a typical Filipino homeowner afford and reap the benefits of solar, we’ve created Southeast Asia’s first Solar Mortgage: a home loan that allows a homeowner to both reduce the interest rates on their mortgage payments, and finance a solar PV installation for zero money down*,* resulting in a cashflow positive situation (i.e. the homeowner actually pays less for the loan + their reduced electricity bill, than not installing solar at all). To quote our recent customer, Mr Jay A., “I can reduce my interest on my home loan, pay less for my house and also zero my electricity bill? That’s a no-brainer. Why would I choose not to do it?”

👍🏻👍🏻 Solar is one of those rare win-win technologies in life. It’s a win for the planet and a win for your wallet. The key to letting everyone enjoy its benefits is to start with empathy, to understand the challenges that regular homeowners face in their lives and create a business model that allows them to make the renewable transition on their terms and in alignment with their life plans and dreams.

📚 Want to learn more about this topic?

1. “A Race to the Top 2024: Southeast Asia” from Global Energy Monitor

2. “Maximizing solar energy production in ASEAN region: Opportunity and challenges” by Dalapati et al. published in Results in Engineering

📢 Shout-out to Okapi Solar!

☀️ Okapi Solar is a B2B2C residential solar financing startup in Southeast Asia co-founded by Zhern Yung and Christopher, with backgrounds in tech startups and institutional finance.

🧑🏻‍💻 Their proprietary installer app empowers solar dealers and installers nationwide to offer their customers quick, simple, and attractive leasing plans at the point of sale with instant monthly cash savings and zero upfront payments. Unlike other operators in this space, Okapi's unique partnership driven model allows them to scale rapidly across markets while keeping acquisition costs low, embracing the localized, face-to-face nature of the residential solar sales and installation process.

💸 Okapi closed their pre-seed round in 1Q24 and is looking to establish strategic partnerships with financing partners to develop a portfolio of high-quality self-liquidating residential solar assets. For more information, please check out their website: https://okapisolar.com/.

🗞️ Recent News

🎙️ Interview with Hsin Yao of Helios

💡 Why were you initially inspired to work on solar energy?

0️⃣ If we’re serious about a net-zero future, then the transition to renewable energy is an absolutely fundamental change that must happen. Specific to Southeast Asia, residential solar surprisingly accounts for almost 40% of all available rooftop space for solar, we just have so much horizontal housing that’s perfect for solar. Ironically, in a land with so much housing, Southeast Asia’s market pentration is almost close to 0%.

👥 When I looked deeper under the hood as to why solar adoption was non-existent, I realized one simple truth: it’s not a technology problem, it’s a consumer problem. People don’t have solar on their homes because they don’t want solar on their homes. And that’s a problem I love solving!

🛠️ How exactly is Helios solving it?

🎯 Our goal is to put solar on 20 million homes across Southeast Asia in 7 years. It’s an ambitious goal but the critical factor here is that at this level of adoption, you’re talking about what we call a ‘no brainer’ offer. Netflix, Spotify, high-speed broadband - these are all ‘no brainer’ goods we consume because the benefits are so overwhelmingly obvious and clear.

💰 Helios has pioneered the ‘solar mortgage’ as our version of the solar ‘no brainer’ offer. Essentially, if you’re buying a house or are currently paying for a house through a home loan, we can make you a very simple offer:

📢 “Add solar to your home today for zero money down (i.e. pay nothing today), and we’ll reduce your home loan interest rate by 1%-3%, all while zeroing out your electricity bill.” The net result is that you’ll pay up to 10% less for your house and power your home with free electricity for the next 25 years.

If you could do that, why would you stick to your original home loan, pay more interest and continue paying for electricity?

😲 What is a surprising fact about financing solar energy?

🤑 What surprises almost every one of our working-class customers is that solar actually can be affordable to an average family. Most people think of solar as an expensive product (it can be if you pay all cash!) but you’d be shocked as to how many families are actually able to add it to their homes for zero downpayment and still be cashflow positive (i.e. you end up saving more money overall with a Helios solar mortgage than without).

🎬 What actions can readers take now to support your cause?

💸 If you’re interested in investing in renewable energy and being part of accelerating solar adoption in Southeast Asia, please get in touch with us. We are starting our next round of fundraising this July 2024 with a specific goal of growing our business and taking our product to new markets across Southeast Asia.

🤝 And if you’re a talented individual that knows mortgages, digital platforms or solar development, I’d love to hear from you as well! We’re growing our team and I can assure you that a team of high-powered, mission-driven colleagues await you and your talents.

🦸🏻 What do you do when you’re not saving the world?

🏔️ You’ll find me on the mountain! My life’s great love is skiing ⛷️. There’s something elemental about flowing down the mountain at speed, almost like a river bending its course down the hill, combing speed, power and grace.

📣 ATTN: Circular Cities

🌏 Are you a young change maker aged 18-25 in Southeast Asia?

💡 Embark on an experiential learning journey with Circular Cities Asia and Industry Experts. In a two-part online course, you will discover the principles of the circular economy and master the art of storytelling to amplify local voices of change and inspire others to join the movement.

🌿 Participants will also have the opportunity to enter in a competition either individually or as a team to submit their own idea for a Circular Story with winning submissions securing an immersive mentoring workshop with Industry Experts and more!

🌟 Your story could make a difference! 

📲 Feature articles, podcasts, video, reels, and stories come in all shapes and sizes, each with the power to positively impact the world and influence our decisions. For a two-part online course where you will:

 🌱EXPLORE: The transformative power of storytelling🌱LEARN: How to research and develop compelling story pitches.

 🌱ENTER: Submit your story pitch into a competition.

 🌱WIN: Earn the chance to have your idea selected for coaching and receive a small completion grant.

Registrations are free and close 31 May. To learn more visit, https://www.circularcities.asia/circular-stories-programme

⏭️ Next week, we’ll be diving into batteries & energy storage, because it’s not enough to capture the energy from renewable sources like solar and wind, we also need to store it!

❓ Did you enjoy this week’s issue? If yes, please do forward to your friends who would enjoy the read as well.

📧 Also, feel free to let us know what you thought by giving us feedback at [email protected].

🌊 SEA you next week!

Karina & Massimiliano