Solar panels are a hot commodity for retirees

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Solar panels are a hot commodity for retirees

Yeom Seok-ju, a 52-year-old living in Seoul, has a habit of checking the weather conditions frequently these days. He takes out his mobile phone whenever possible for updates on changes in weather.

Yeom, who used a pseudonym, does not care about the weather where he lives; instead, he is interested in a distant town where he has no relatives or friends. The town is in Gapyeong, about 60 kilometers (37 miles) northeast of Seoul, where he recently bought photovoltaic solar panels that can produce 100 kilowatt hours of electricity.

“More than 300 people rushed in for 100 investment accounts, and I was lucky to be chosen,” Yeom said. “I spent about 200 million won ($187,000) to buy a land plot and the panels installed on it. I believe that is worth it.”

He is among a growing number of people who see solar power not just as clean and environmentally-friendly energy, but also as a possible lucrative investment opportunity with stable long-term prospects.

Solar panels are composed of modules that produce electricity and an inverter that turns direct current into alternating current so that it can be sent and sold to Korea Electric Power Corp. (Kepco), through which individual investors can make money.

Solar power generation used to be beyond the reach of individual investors as it required massive facilities and resulted in heavy costs. But lowering the prices of modules and necessary parts driven by technological advances have made it easier for them to get in.

The growing interest in investment opportunities in solar power is also partly thanks to the government’s initiative to reduce the country’s reliance on nuclear and coal-based power generation.

Under a long-term renewable energy plan, the government is seeking to increase the ratio of power generation through renewable energy from the current 7 percent to 20 percent by 2030.

In an apparent bid to lure investment to clean energy and brace for a possible shortage of electricity by phasing out nuclear power plants, the government is also buying all electricity being generated from solar power plants for 20 years.

Such stability and long-term prospects for profitability, combined with low maintenance costs, seem to be attracting more people, particularly those in search of a major source of fixed income after retirement.

“I am just a few years from retirement. I need a stable source of income after that, and I think this is good investment,” Yeom said.

“On a sunny day, they can generate electricity for about four hours, and that can translate into about 2 million won a month,” he added. “I just hope that natural disasters, such as earthquakes, do not hit the area and damage the panels.”

Lee Kyu saw it as good investment as well, but from a supplier’s point of view. In 1999, he started a company that produces inverters, and since then, his business has expanded to installing solar power plants for both corporate and individual clients.

“Back in the day, awareness about clean energy was not that high. I didn’t see any money to be made when I thought about solar power at the time,” he said. “As module prices are falling, and related technologies are advancing, however, solar power seems to be emerging as a lucrative investment opportunity.”

Lee recently built two 1-megawatt hour solar power plants in the country’s southwestern island of Jindo in South Jeolla for a German company that is operating them to generate and sell electricity. Lee is confident that the solar power plant will grow in the years to come as people’s awareness of clean energy and improving profitability will likely increase.

“Demand for solar power plants is growing. By some estimate, the solar power industry, in terms of power generation, is expanding at an annual rate of 20 to 25 percent. There could be a little bit of ups and downs in any industry, this will surely go upward for the time being.”

With people rushing to the solar power business and panels being installed on rice paddies, mountains and any place where a certain amount of sunlight is guaranteed, there are some voices worrying about damage to the environment.

Data provided by Korea Forest Service showed that the area on mountains permitted for solar panel installation came to 681 hectares (1,683 acres) in 2017, about a 22-fold increase from 30 hectares registered in 2010.

Lee said that such matters can be resolved through close policy coordination and companies’ efforts to prevent reckless installation of panels, adding that a more critical issue appears to be “policy swings” that could take place with change of government.

“What concerns me most is possible policy swings. The current government says that it will increase the ratio of renewable energy, but who knows what will happen when a new government comes in,” he said. “This industry needs a consistent policy direction.”

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