Opinion Piece

How CoVid-19 has impacted Solar Distribution in Southeast Asia in a positive way

Author: Junrhey Castro, Director of Trade, BayWa r.e. Solar Distribution / South East Asia

This time last year, the world looked a very different place from the way it does now.

The arrival of Covid-19 has changed so much about the way we live, work, trade and manage our businesses, whether on a local, national, or international scale. Nothing is the same anymore!

However, for installers working within my region of responsibility – South East Asia – the pandemic has seemed to have changed consumer behaviour and brought about new opportunities.

Low carbon living

One change in particular, has been the increased awareness by residents of the benefits of setting up their own household / residential solar energy rooftop systems.

I believe there are several reasons for this, including the fact that the new imperative to work and learn from home has, for many, resulted in higher energy bills, meaning that buying and installing your own rooftop solar and becoming energy independent is becoming an increasingly attractive solution.

I think the pandemic has also brought with it a desire to live in a lower carbon world, where maybe we do not drive our cars so much, have less need to travel to or for work, are more careful with our natural resources and so on. This is an encouraging shift in consumer behaviour and one which we applaud.

Many countries have also reported plummeting pollution levels as lockdowns has slowed down pollution emission. I think this has led people to now appreciate the beauty of living in a more environmentally friendly way and to be more conscious about how energy is sourced. During the pandemic we have seen a drastic increase in carbon-neutral pledges from companies and governments around the world.

In the not-too-distant past, the considerable up-front investment required has been the main barrier preventing most households from exploring the installation of a residential solar system. But costs are falling, rapid technology advancement is helping present viable small-scale solutions and in countries like Vietnam (where the government is pro-renewables and has put in place policies to encourage residential solar installation growth), take-up is increasing quicker than any other part of Southeast Asia.

Renewables provide better security

This consumer change brings with it some great opportunities for installers: a chance to diversify their skills, to grow their business, to provide job security and to contribute towards a net zero world.

Most of the Southeast Asia market, except for few countries, is less mature than others, with a focus until recently on larger-scale commercial projects. However, as we have seen, this is beginning to switch towards the residential installation sector. There are challenges, of course, with a region that is geographically fragmented but there is no reason why these cannot be overcome. 

To do so, however, will mean a change in buying culture and a willingness to do things differently.

What do I mean by this?

The pandemic has brought into sharp focus for many such installers the pitfalls of relying on one country source for components. Before Covid-19 arrived, there was heavy reliance on obtaining all supplies from China. In addition to this, suppliers would also want to sell direct to the consumer in each country. Demand for small-scale project components was increasing, but lockdown meant long delays in the supply chain, with issues around port blockages, long delivery timescales and uncertainty around when an installer could begin to install a customer’s project.

The costs increased, too – installers were having to pay for whole containers when their orders were only filling a small percentage of the container space.

Distribution and better service

It is no longer the case, either that buying direct from the manufacturer is the cheapest option – it is one of the reasons why distribution companies are continuing to thrive and grow, as noted in other regions like Europe, the US and Australia.

The one-source buy direct from the manufacturer model has long been ingrained in the culture of Southeast Asia, but the pandemic has shown that perhaps it is time to change. That is where companies like BayWa r.e. can step in and provide a cost-effective alternative. Given that the global solar market has remained resilient despite everything that COVID-19 has thrown at us, it makes good business (and environmental) sense to continue to focus on it.

BayWa r.e. has global experience in the wholesale installer market, applied with local knowledge, the presence of local and regional offices and warehouses, and a growing digital presence which makes on-line purchase and delivery increasingly straightforward.

BayWa r.e. can provide installers with the kit they need, dispatching it quickly, and removing the need for them to endure a two-month wait or more for supplies to arrive. This means the installers in turn can provide a better service for their customers – and a good foundation from which to grow their expertise and focus on their business. This approach offers reliable logistics, healthy stock levels and guaranteed delivery dates. All this adds up to a more secure and sustainable approach for installers wishing to grow their business.

The challenge ahead

This is of course good news, but there are some wider issues to bear in mind. Costs may be falling but solar installations are still beyond the reach of many consumers. In countries where there is government and policy support for renewables this is less of an issue, but in those where such support does not exist, the burden still lies heavily on the individual.

Grid congestion presents another challenge: is the infrastructure designed for and able to accommodate growth in load, and is the associated metering fit for purpose?

If the roll-out of solar – and other – renewable generation technologies are to succeed and be sustainable in the longer term, it is critical that energy systems become increasingly decentralised. 

All these are areas where governments need to step in and provide the right platform for renewables, whether its rooftop / residential solar we are talking about or large-scale commercial installations.

Another challenge facing the domestic installer sector is the need for education. How do you ensure your staff have the right skills and expertise to install rooftop solar systems safely and competently? How do you upskill electrical engineers who are keen to diversify?

We recognise the need for education, and in the regions where our distribution business is well established, we also provide free training and guides for our installer customers, so they understand the equipment they are purchasing, know how to install it and maintain it, and can be sure they are giving their own customers the best service possible.

We think it is most encouraging to see the growth in consumer-driven desire for self-generation solutions, it is a great opportunity for installers and we are looking forward to becoming increasingly involved in this exciting movement.

 

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