Energy is a vital ingredient contributing to a country’s economic growth (Scragg, 2009). Singapore has been taking proactive action investing in clean energy technology to diversify her energy options (EMA, 2012).
This research aims to analyze possible economic solutions suitable for Singapore to ensure her energy security. Renewable energy is most ideal due to the global depletion of fossil fuels (Ristinen and Kraushaas, 2006), with solar energy identified as a viable alternative source of renewable energy. A comparative study with Hong Kong revealed that solar energy is one of the more ideal renewable energy sources in which they should invest.
Economic evaluation methods were used to identify ways to provide information to decision makers about the cost effectiveness of solar energy and the likely difference between current price of electricity and cost-recovery price if solar power were used. A cost-effective analysis was undertaken for the household sector. A further analysis was undertaken to compare the costs between adopting solar photovoltaic panel technology and importing oil and gas for energy use.
Results from the analyses showed that the adoption of solar technology will increase the cost of tariffs for the whole of Singapore but this cost is considered minimal when compared to the cost of importing oil and natural gas. Therefore, the adoption of solar PV technology would be a cost-effective solution for Singapore in the long run.
Further research would be worthwhile to investigate more reliable costs and benefits accrued from the adoption of solar PV technology for both household and non-household sectors and the real cost of intermittency in supply to allow for a better gauge of the cost to the whole of Singapore.