Are Solar Panels Worth Investing in Singapore? Pros and Cons to Consider

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Solar energy is gaining popularity as an alternative energy source in Singapore, as the city-state aims to reduce its carbon footprint and increase sustainability. However, many people are still uncertain about the value of installing solar panels in their homes or businesses. In this article, we will explore the pros and cons of using solar energy in Singapore to help you decide if it is worth it for you.

Why Solar Panels Are Not Worth It for All Homeowners in Singapore

While solar power offers long-term savings and eco-friendly benefits, solar panels aren’t always a smart investment for every Singaporean homeowner — especially if you live in certain types of private residential properties. From space constraints to poor energy returns, there are a number of factors that could make solar less appealing, or even counterproductive. Below are some of the key reasons why you might want to hold off on installing solar panels.

Note: HDB flats are not eligible for individual solar panel installations. This article focuses on landed property owners and select strata-titled ECs or private apartments with management approval.

1. Your Roof Isn’t Suitable for Solar Panels

In Singapore, solar panels for homes are almost always installed on the roof. Given the country’s year-round tropical sun, this seems ideal — but not all roofs are well-suited for solar.

There are several common issues:

Your roof is too old: If your roof is over 20 years old, or showing signs of wear such as cracked tiles or corroded zinc panels, you’ll need to replace or repair it before installing solar. Otherwise, you risk having to remove the panels later to fix the roof — adding unnecessary cost and disruption.

Heavy shading: If your roof is consistently shaded by tall trees, neighbouring bungalows, or high-rise developments, solar production will be poor. Even the most advanced photovoltaic panels can’t compensate for long hours of shading, especially during midday.

Wrong orientation or tilt: For best results in Singapore, solar panels should ideally face south or south-east, at a tilt of around 10–15 degrees. If your roof has a complex layout or faces north with limited direct sunlight, the system’s yield will drop significantly.

Insufficient space: A typical 5kWp solar setup — which suits many mid-sized landed homes — requires about 30 to 35 square metres of unshaded, continuous roof space. If your rooftop is broken up by skylights, water tanks, or attic vents, or is simply too small, there may not be enough room to install enough panels to make the investment worthwhile.

2. You Have Nowhere Else to Install Panels

If your rooftop isn’t suitable, you might explore other areas of your property for panel installation — such as a pergola, carport, or ground-mounted array. However, in Singapore’s urban environment, such options are rare.

Detached and semi-detached homeowners might have small gardens or backyard space, but installing ground-mounted systems comes with added costs: you’ll need concrete supports, weatherproof mounting systems, and underground wiring to connect to your home’s main circuit.

Some properties are also subject to URA conservation guidelines, MCST approvals (for condos or cluster homes), or architectural restrictions that prevent visible or raised installations. If none of these alternative locations work, you may simply not have anywhere to install a viable system.

3. Your Electricity Bills Are Already Low

Solar energy makes the most financial sense when your electricity bills are high. If your household typically uses a modest amount of power, installing solar panels may not generate enough savings to justify the upfront cost.

A few examples of why your energy usage might be low:

You live in a compact terrace house or small semi-D
Your family spends most of the day outside the home
You use energy-efficient appliances and LED lighting
You already benefit from lower OEM tariffs or off-peak usage

As of mid-2025, Singapore’s electricity tariff stands at $0.3184 per kWh. If your monthly bill is below $90, your break-even point could stretch beyond 10 years, even for a small 3kWp system.

In such cases, the ROI is weak — especially when factoring in routine cleaning, inverter replacements every 8–12 years, and occasional servicing. For these households, solar may simply not be economically viable.

4. You Plan to Move in the Next Few Years

Solar is a long-term investment. Most homeowners in Singapore recover their initial installation costs over 6 to 8 years, depending on consumption and system size. If you plan to sell your house or upgrade to a different property within that timeframe, going solar might not make sense.

Although solar panels can add value to a landed property, the added value is strongest only when the system is fully paid off. Buyers are less inclined to take over a solar hire-purchase plan or deal with ongoing loan repayments. In many cases, you’ll be expected to settle the outstanding balance before completing the sale.

Moreover, moving the system to a new home is not a practical option. Dismantling solar panels can void warranties, and reinstalling them elsewhere requires new permits, structural assessments, and reconfiguration of the system.

If your current residence is not your long-term home, it may be better to delay your solar investment until you’re settled in a property you intend to keep for the next 20–25 years.

5. You’re Not Eligible for Incentives or Rebates

Singapore does not currently offer blanket subsidies or personal tax rebates for residential solar panel installation in the same way countries like the U.S. or Australia do. This means most homeowners in Singapore must bear the full upfront cost of a solar PV system — typically S$12,000 to S$30,000 for a 3kWp to 10kWp system, depending on roof size and panel brand.

Some cost-saving opportunities do exist, but they’re mostly aimed at commercial buildings, solar leasing models, or bulk procurement schemes. For private homeowners, the most impactful scheme is SP Group’s Enhanced Central Intermediary Scheme (CIS), which allows net export of solar energy to the grid, credited via “half-hourly settlement”. However, this is not true net metering — you are paid a much lower rate (e.g. S$0.10–0.14/kWh in recent quarters) for exported electricity compared to the rate you pay when buying from the grid (e.g. S$0.3184/kWh as of Q2 2025).

As a result, your savings mostly come from self-consumption, not export. If your household is typically empty during the day — when solar production is at its peak — and you rely heavily on grid power during evenings, your solar ROI will shrink dramatically.

Furthermore, if your property is part of a condominium, strata-titled EC, or cluster home, your ability to install solar depends on MCST approval, roof ownership, and whether there are existing shared systems in place. These added layers of complexity can delay or block installation altogether.

6. You’re Being Sold an Overly Attractive Deal

The phrase “free solar panels” has appeared in countless ads across social media and search engines, even in Singapore. These deals usually refer to solar leasing or Power Purchase Agreements (PPAs) where a solar company installs panels on your roof — at no upfront cost — and you agree to buy the electricity generated at a fixed rate for 20 to 25 years.

While this may seem attractive, read the fine print:

You do not own the solar panels — the company does.
You’re locked into a long-term contract, often with exit fees.
You may not benefit from full electricity bill offsets.
Reselling your home becomes more complicated, especially if buyers are unwilling to take over the agreement.

In Singapore, leasing is uncommon for residential landed homes but not unheard of. Some newer solar startups offer “subscription-style” models or heavily discounted packages to gain market share. Be wary of those that:

Can’t clearly explain how net metering works in Singapore.
Don’t provide a detailed payback period breakdown.
Promise unusually high monthly savings (e.g. “cut your bill by 80%”).

If a quote looks too good to be true, it probably is. Always work with reputable solar contractors that are EMA-licensed and willing to conduct a proper site survey before proposing a solution. Reputable providers will also offer a performance warranty (usually 25 years) and explain inverter warranties, maintenance schedules, and potential output degradation.

7. The Economics Just Don’t Work for Your Situation

Sometimes, after all the evaluation and site assessments, you’ll find that solar just doesn’t make financial sense — and that’s okay. Solar panels aren’t suitable for every home, every roof, or every household budget.

Some key economic factors that may work against you:

a. High Interest Rates

If you need financing to cover the solar installation, interest rates can eat into your savings. As of 2025, green loans in Singapore for solar systems range from 3% to 6% per annum. Over a 5-year or 10-year loan term, this could add thousands to your total repayment amount, especially when combined with any administrative or early termination fees.

b. Limited Daytime Consumption

As mentioned earlier, self-consumption is key to achieving strong ROI. If your home remains empty for most of the day — for example, if all residents work full-time outside or travel often — your solar panels will end up exporting most of their output to the grid at a low rate. This severely limits your cost savings potential.

c. Installation Challenges

Some homeowners face significant customisation costs due to roof material (e.g. clay tiles, standing seam metal), roof access difficulty, or complex layouts. Others may require electrical upgrades or switchboard rewiring, especially in older homes, to accommodate a new solar system.

d. Uncertain Long-Term Plans

If you’re unsure about your home ownership timeline or plan to undertake major renovations within the next 3–5 years, you may be better off postponing solar adoption. Unlike other home upgrades, solar installations are best done once — and meant to last for decades.

Final Thoughts: Solar Panels Are Not for Every Home

Despite Singapore’s sunny climate and increasing interest in sustainability, solar panels are not automatically a good fit for all homeowners. There are genuine structural, financial, and practical reasons why installing a solar system may not be worth your while — at least not right now.

To make an informed decision, evaluate your:

Roof suitability (space, shade, structure)
Electricity usage patterns
Long-term residency plans
Financing options
Understanding of current export rates and lack of strong rebates

For some, solar will still be an excellent long-term investment — cutting energy bills, boosting property value, and contributing to a greener Singapore. But for others, especially those in tightly-packed landed homes, with low usage or difficult roofs, the economics just don’t stack up.

As with any major home improvement, the key is to run the numbers, vet your contractors, and understand the realities — not just the hype. If the conditions aren’t right, it’s perfectly reasonable to wait.

How to Determine if Solar Panels Are Worth It for You?

In Singapore, where sunshine is abundant and electricity tariffs are steadily climbing, more homeowners are exploring solar panels as a long-term solution to lower energy bills. But are solar panels worth the investment for everyone?

The answer depends on one key metric: the solar payback period.

What Is the Solar Payback Period?

The solar payback period refers to how long it takes for your solar investment to break even — in other words, when the cost of installing the system is fully recovered through your monthly electricity savings.

If your system pays for itself within 8 to 10 years, it’s typically considered a good investment. Many solar installations in Singapore achieve payback in that range, especially for landed property owners with consistent energy usage and enough roof space to support a system sized between 5kWp and 10kWp.

With a solar system lasting 25 to 30 years, any savings beyond the break-even point become your net financial return.

Example Payback Calculation (Singapore Context)

Let’s look at a simplified breakdown based on 2025 data:

Installation cost: S$20,000 (5kWp system)
Annual electricity generation: 6,500 kWh
Self-consumption rate: 70%
Electricity tariff: S$0.3184 per kWh (Q2 2025)
Annual savings: ~S$1,450
Maintenance cost: ~S$200 per year (after year 2)

Estimated Payback Period:
S$20,000 / (S$1,450 – S$200) = ~15 years

However, for homes with higher energy usage — say, $250/month bills or more — and better self-consumption (e.g. occupancy during daytime), the payback period can drop to 7–9 years.

The key takeaway: the faster your solar system pays for itself, the more worthwhile the investment becomes. But the payback period can vary significantly based on multiple factors.

What Affects the Solar Payback Period in Singapore?

There are three main factors that influence how quickly solar panels will pay off for you:

1. Your Electricity Usage

The higher your monthly bill, the more potential you have to save. A household spending S$250–S$400/month on electricity can recover their solar investment far faster than one spending under S$100.

2. Self-Consumption Rate

Singapore uses half-hourly settlement rather than full net metering. This means you’re paid less for exported solar energy than what you pay for grid energy. The more energy you use during the day — when your panels are producing — the more you save. For example:

Self-consumed solar power offsets full tariff (~S$0.318/kWh)
Exported excess earns ~S$0.10–0.14/kWh via SP Group’s Intermediary Scheme

To maximise ROI, aim for a 70%+ self-consumption rate. This is why solar is most effective for households with daytime occupancy or automated systems (e.g. pool pumps, EV chargers, or water heaters) that run during daylight hours.

3. System Size and Roof Suitability

The typical landed home in Singapore installs a solar PV system between 5kWp and 10kWp, depending on available roof space, orientation, and household demand. The more panels you can install without shading or layout constraints, the more solar energy you can generate — and the shorter your payback period.

Keep in mind that homes with north-facing roofs, heavy shading from nearby buildings, or insufficient mounting area may not generate enough electricity to justify the cost of installation.

Signs That Solar Panels Are Worth It for You

You can use this checklist to determine if solar is likely a smart financial and environmental decision for your household:

You live in a landed home with at least 30 square metres of usable roof space
Your monthly electricity bill is above S$150
You or your family are home during the day (e.g. work from home, retired, children at home)
You plan to live in your current property for at least 10 more years
Your roof is less than 15 years old and in good condition
You can finance the system affordably or pay upfront
You’re working with a licensed, reputable solar provider

If most of the above apply, solar is very likely worth it — both from a savings and sustainability point of view.

Why Choosing the Right Installer Matters

Just like renovating a kitchen or rewiring your home, solar installation is a technical job that requires expertise, proper permits, and long-term support.

In Singapore, all solar contractors must be registered under EMA’s Licensed Electrical Worker (LEW) framework. Beyond licensing, look for companies that:

Provide a site-specific solar yield estimate
Offer Tier-1 solar panels with 25-year warranties
Use efficient inverters (e.g. Huawei, Enphase, SolarEdge)
Include clear breakdowns of ROI, costs, and expected payback
Have local presence and offer responsive post-installation service

Avoid installers who:

Guarantee “free solar panels” or make unrealistic claims
Can’t provide EMA registration or case studies
Use high-pressure tactics or push unnecessary upgrades

Solar is not a one-size-fits-all purchase. A proper installer should evaluate your roof, consumption habits, and financial goals before recommending a system.

Make Solar Worth It — Work With Trusted Experts

At 1st Solution Group, we believe solar is not just a trend — it’s a smart long-term investment in your home and the planet. But only when done right.

We provide:

Tailored solar designs for Singapore landed homes
Transparent cost breakdowns and payback projections
High-efficiency solar panels and inverters with long warranties
End-to-end project management — from site assessment to LEW sign-off
Ongoing support, panel cleaning, and monitoring systems

Whether you’re just exploring solar or ready to get started, our team will help you determine if it’s truly worth it for your specific situation — no pushy sales talk, just facts.

👉 Book a free consultation with 1st Solution Group today and let us show you how solar can power your future.

Final Word

In Singapore, where electricity prices continue to rise and environmental concerns grow more urgent, solar can offer real savings and strong returns — if installed under the right conditions, for the right home, by the right team.

By calculating your solar payback period, evaluating self-consumption, and partnering with a trustworthy installer, you’ll be empowered to make an informed, confident decision. For many Singaporean homeowners, solar isn’t just worth it — it’s one of the smartest investments they’ll ever make.

Sources

Energy Market Authority (EMA), Singapore Electricity Tariffs Reports
SP Group, Central Intermediary Scheme Documentation
Building and Construction Authority (BCA), Solar Panel Installation Guidelines
National University of Singapore (NUS), Solar Energy Research Institute of Singapore (SERIS) Performance Studies
First Solution Group Internal Case Data (2023–2025)
Solar Energy Industries Association – Degradation Rate and Payback Period Benchmarks
Enphase and SolarEdge Technical Documentation (Global Manufacturer Specs)