Singapore is a small country that relies heavily on energy imports to fuel its economy, which makes it extremely vulnerable to price fluctuations in the global energy market. In recent years, Singapore has experienced a significant increase in energy prices which directly affect the cost of goods and services, particularly those that rely on energy inputs such as transportation and manufacturing. When energy prices rise, it can lead to higher production costs and potentially higher prices for consumers and businesses.
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Another factor that contributes to the rising prices in Singapore is the increase in the Goods and Services Tax (GST). On the 1st of January, 2023, Singapore raised its GST from 7% to 8%. For those who might not know this, GST is an indirect tax levied on all goods and services within Singapore, including imports. As the last increase was way back in 2007, the increase had an inflationary effect on the economy as the cost of goods and services increased.
The current high levels of inflation have greatly affected the purchasing power of consumers as the overall price of products and services increased which negatively impacted consumer spending. This directly translates to decreased sales revenues for businesses as it reduces the level of competitiveness.
The rise in energy prices also has a significant impact on the cost of living in Singapore, especially on the cost of electricity. Singapore generates the majority of its electricity from natural gas, which is closely linked to global oil prices. When oil prices rise, it can lead to an increase in the cost of electricity generation. This, in turn, can lead to higher electricity bills for consumers and businesses.
With the increase in GST, the carbon tax is also expected to increase by 5x to $25 per tonne in 2024 and 2025. It will then further increase to $45 per tonne in 2026 and 2027, possibly reaching $50 to $80 per tonne by 2030. This increase will help Singapore’s new commitment to achieve net-zero emissions by 2050 and the revenue from the increased carbon tax will be used towards low-carbon and energy-efficient solutions.
Although the rising cost of living in Singapore has significantly affected consumers and businesses, here is one of the ways you can save up on your expenditure! By adopting renewable energy sources such as solar energy in Singapore, a form of clean energy, you can save on your electricity bills. In addition, you get to do your part in creating a sustainable future. And since we get to enjoy summer all year round in Singapore, switching to your own solar power source can certainly benefit you in many ways.
1. Reduced Electricity Bills
Photovoltaic (PV) panels or solar panels for homes and businesses generate clean energy from the sun and convert it into electricity without relying on fossil fuels. When sunlight hits the solar panels, it is converted into electricity through a process called the photovoltaic effect. This electricity can then be used to power your entire property and other appliances, reducing the amount of electricity that needs to be drawn from the grid.
So, instead of purchasing power from an electricity provider, owners can lower their monthly utility bills while contributing to a much cleaner future. Although your home might still require additional electricity from the power grid, any excess electricity will be sold back and can be used to offset your overall bills.
2. Incentives From The Government
To encourage eco-friendliness and green efforts, there are several government bodies that provide financial incentives for solar panels in Singapore.
3. Increased Home Value
Solar panels reduce your carbon footprint and increase your energy savings, but did you know they can also elevate your home’s market value? With the rise in demand for green living, most homeowners are looking for energy-efficient features when selecting their new home, making homes with solar panels highly desirable. According to studies, more Singaporeans are also willing to purchase net-zero homes and pay an additional 3-4% for sustainable properties.
By installing solar panels, you get to contribute to a cleaner future by consuming green energy while saving costs in the long run. Interested in solar panels? As a solar developer in Singapore, we operate a network of solar photovoltaic (PV) systems that power businesses and homes all around Singapore. Contact us today to know more!