OCBC Bank launches Singapore’s first consumer loan for residential solar panels
Singapore, 11 January 2021 – OCBC Bank today launched Singapore’s first consumer loan for the installation of residential solar panels to meet growing demand from homeowners looking to power their houses with clean energy. The loan facility provides landed property homeowners with a term financing option for the installation of solar panels, defraying upfront costs to enable and accelerate clean energy adoption. Each homeowner can borrow up to $30,000 with a tenure of between one to five years to allow for greater flexibility on the repayment period.
The Bank has entered into an exclusive partnership with Sembcorp Power, the electricity retail arm of Sembcorp, to provide homeowners with onsite solar panel installation assessment. The initial consultation costs will be borne by Sembcorp Power. Homeowners can also expect to save on average more than 20 per cent of their household electricity bill, based on SP regulated tariffs, when they sign up for an electricity plan with Sembcorp Power.
Growth of Singapore’s solar industry
At the recent Climate Ambition Summit, Singapore’s Prime Minister said that the nation has been taking "bold steps" to achieve its Long-Term Low Emissions Development Strategy, such as quadrupling solar energy production by 2025. OCBC Bank’s latest consumer loan for residential solar panels is aimed at facilitating the country to reach its target.
With consumers’ growing awareness of the importance of environmental sustainability, as well as greater understanding of the tangible long-term benefits and cost savings from transitioning towards using solar energy, Singapore has seen residential solar installations increase by more than 30 times over the past 10 years. Singapore aims to generate 1.5 gigawatt-peak (GWp) of solar energy by 2025 – almost four times the current capacity of 390 megawatt-peak (MWp).
Singapore also aspires to halve carbon emissions from its peak by 2050, with a longer-term view to achieve net-zero emissions as soon as viable in the second half of the century. Solar energy is one of the key sources to push the envelope on climate ambition.
Mr Sunny Quek, Head of Consumer Financial Services Singapore, OCBC Bank, says, “As one of the biggest corporations in Singapore, OCBC has the responsibility of leading the charge to develop a more sustainable future. Over the past few years, we have been partnering businesses and organisations to work on ways we can contribute to the long-term sustainability efforts.
“Offering this retail loan for solar panel is one of the key ways to introduce and improve the accessibility of a green and sustainable energy source to Singapore’s landed property homeowners. This is the first but an important step in getting people to relook the way they view electricity and we are glad to pioneer this loan.
“We are pleased to partner Sembcorp Power, an established and reputable power retailer to accelerate the adoption of solar energy across the consumer segment.”
Ms Valerie Lee, Head of Consumer Business, Sembcorp Energy Singapore says, “Sembcorp is committed to helping our customers in the energy transition. Our partnership with OCBC is a timely move to bring affordable clean energy to more consumers. Backed by a suite of sustainable solutions, Sembcorp Power is able to extend competitive electricity price plans and enable landed property homeowners to get additional energy credits with their renewable energy certificates as they go green and enjoy further cost savings.”
Returns on investment
Besides reducing their overall carbon footprint, homeowners with installed solar panels can expect lower total electricity costs in the long run. Households with excess electricity generated by their solar panels can also opt to sell the power back to the national electricity grid to offset its electricity costs.
Instant loan approval
Leveraging the bank’s proprietary and secure instant online approval platform and SingPass’ verification service MyInfo, eligible homeowners can apply online for the solar panel loan within five minutes and get loan approval within 60 seconds, if all the information provided and proprietary bank checks are in order.
This instant solar panel loan online portal eliminates the need for customers to manually complete an application form or share sensitive personal information with third parties. The fully-digital solution also emphasises the bank’s commitment towards adapting to a rapidly-evolving banking landscape by making use of technology to enhance the customer experience from end to end.
Future low-carbon world
This retail loan for solar panels is one of the many steps in OCBC Bank’s climate action approach, which is focused on taking strategic action to reduce or store CO2. Making up some 80 per cent of the greenhouse gases, CO2 is causing extreme natural disasters and temperature shifts around the globe.
The Bank has already begun its journey of transitioning to a sustainable world. In 2019, OCBC Bank became the first bank in Southeast Asia to stop financing new coal-fired plants.
It also supported the planting of trees to store CO2. The OCBC Arboretum, a landmark project at the Singapore Botanic Gardens, conserves and studies 200 species of 2,000 dipterocarp trees that can store as much as 80 million kg of CO2 over their lifetimes.
On the business front, OCBC Bank has stepped up to do even more, having pledged to grow its sustainable finance portfolio to S$25 billion – after achieving the S$10 billion-by-2022 goal, two years ahead of time. The Bank has funded projects in the region that harness the wind and capture the sun’s rays to generate clean energy. These projects range from wind and solar farms to electric cars, hybrid buses and solar panel installations.
In December 2020, OCBC Bank adopted the Equator Principles, an internationally-recognised risk management framework adopted by financial institutions worldwide which will guide how the Bank determines, assesses and manages environmental and social risks in projects. OCBC Bank’s voluntary adoption of the Equator Principles is an extension of its Responsible Financing framework which the Bank has put in place since 2017.
As an integrated energy player across the utilities and energy value chain, Sembcorp brings expertise in providing urban sustainability solutions to residential customers, as well as industrial and commercial customers. Driven by its purpose to do good and play its part in creating a greener future, Sembcorp delivers customised combinations of solar energy, energy storage, sustainable energy retail and other innovative energy solutions that support the energy transition and sustainable urban development.