Solar Power Moves Ahead in Taiwan Despite Obstacles

The use of agricultural land will be needed to provide sufficient area, but regulations governing farmland are stringent. 

Taiwan’s rural Yunlin County, traditionally one of the island’s least developed areas, is virtually booming with solar panels. Every third farmhouse or barn seems to be covered in solar panels. And where locals once eyed solar-power purveyors with suspicion, “they love us here now,” says Slash Chiu, sales director for Sinogreenergy, one of Taiwan’s largest solar-power developers. The company has over 70MW of installed solar capacity in its portfolio, most of it in Yunlin.

Developers such as Sinogreenergy rent the roofs on which they install solar panels, earning revenue off the feed-in tariff (FiT) paid by the government. The farmers are delighted with the extra rental income while they continue to farm.

The model has largely been a success, and much rooftop real estate has already been snatched up. Taiwan has ramped up its rooftop solar installations by offering an attractive FiT for solar energy, currently standing at NT$4.53 (US$0.15) per kilowatt hour (kWh) for rooftop installations between 100kW and 499kW in scale. The island currently has some 1.4GW of installed solar capacity, nearly all of it on rooftops.

For the government to meet its target of 20GW of installed solar photovoltaic (PV) capacity by 2025, however, ground-based units will also needed, mostly in the sunnier, mostly rural counties of Yunlin, Chiayi, and Changhua. Ground-mount solar already exists in Taiwan, but nearly all of it is relatively small scale, beneath 500kW in capacity, due to rules that define any power project of 500kW and above as a “power plant,” subject to strict regulations.

Ground-mount of any size, with an FiT of NT$4.54/kWh, earns more than a rooftop installation to enable owners of solar farms to cover their higher costs and risks. Available land for largescale solar deployment is scarce, though. Taiwan’s total area is only about 35,000 square kilometers, two-thirds of it steep mountains that are off limits to major development. Taiwan’s 23 million people live mostly in densely populated cities on the western plain, which is also where most of Taiwan’s arable land is located. Installed solar capacity of 20GW would likely require 20,000 to 25,000 hectares of land – nearly 3% of Taiwan’s total 800,000 hectares of arable land.

The goal is to find a way to enable land to be used for both farming and solar PV power generation, but it is unclear whether Taiwan is ready to adopt potential innovative solutions. Big Sun Energy, a solar-cell manufacturer located in an industrial park in Hsinchu County, has developed a system that could perhaps point the way towards an answer. Big Sun’s solar tracker pivots throughout the day to harvest significantly more sunshine as it tracks the sun’s path across the sky. Equally important, the tracking frames stand as much as five meters off the ground. In Yunlin, the company grows coffee – a crop that generally enjoys shadier environs – beneath the solar panels. The first crop of coffee beans grown on this farm will be available this fall.

“Solar power and agriculture integration is a good business to pursue,” says Big Sun founder and Chairman Summer Luo. “Even though there are limitations to the land, we will find a solution to succeed in both solar and agriculture.”

That will be the core challenge that Taiwan’s domestic solar providers must face. Despite having a president and legislature firmly in support of Taiwan’s transformation toward greater reliance on renewable energy, the market has developed far more slowly than expected. Taiwan currently has some 1.4GW (1,400 MW) of installed solar capacity, but has only installed 400MW toward its interim goal of an additional 1.54GW (above the 900MW that had already been installed as of mid-2016) by the summer of 2018.

It is widely conceded that Taiwan stands little or no chance of reaching 20GW of installed capacity without ground mounts. But obtaining approval for such installations is a difficult undertaking due to red tape and the inadequate coordination among the various government agencies involved. Those agencies include the Bureau of Energy (BOE), Council of Agriculture (COA), and the Environmental Protection Administration (EPA) for the environmental impact assessment (EIA). In addition, Taipower must give permission for connection to the grid.

Protecting the land

Taking its role to preserve and manage Taiwan’s agricultural lands quite strictly, the COA has revoked the power-producing permits for over 100 farms that had been found to have either abandoned farming to just live off of the rent paid by solar power companies for their rooftops, or were found to have “not followed the plan” they submitted. Reportedly in some cases that deviation meant growing bananas instead of papayas.

A COA representative said by email that the Council has no jurisdiction over renewable energy equipment on farmlands, but likewise noted that farmers “are required to have a plan to describe the agricultural production,” and that if the farmer deviates from the plan, the local agriculture bureau may revoke their permit to farm.

Big Sun’s Luo says that while the company is permitted to grow coffee beans beneath solar panels, new rules introduced by the COA might stifle innovation. Farmers need to get an agriculture plan approved and need to show a track record for whatever crop they would like to grow. Integrating solar PV and farm crops will likely require experimenting with different crops, however, and this rule will potentially prevent farmers from making such experiments.

The COA is promoting innovation in other ways, including the use of floating solar PV at fish farms and experimenting with livestock raising on solar farms. According to COA regulations, no more than 70% of an agricultural plot can be covered in solar panels, and the land can be used for solar PV for only 20 years before reverting back to farmland.

“Agricultural use is the core value of agricultural land use,” the COA representative wrote.

The COA has released over 803 hectares of “salt land” – land that has subsided due to overuse of ground water – for solar installations. Below sea level and subject to frequent flooding, much of this land is now sterile and crusted with salt, desiccated land in the midst of fallow farms draped in lush greenery. Following release of the land for development, investments totaling NT$91.2 billion (approximately US$2.9 billion) are expected.

But even the salt lands are not without controversy. Environmental groups have filed suit to preserve the land designated for solar power installations in rural Miaoli, saying that these wastelands are actually crucial habitat for rare migratory birds, especially the black-faced spoonbill.

Yet despite the challenges, investors and developers are making big plans for Taiwan’s solar market. In early September, Singapore-based Equis Funds Group announced BOE approval of its 70.2MW solar project in Chiayi County’s Yizhu Township. The area planned for this development is farmland that is no longer productive, including “salt lands.” The company said construction is expected to begin in early 2018, with power to be delivered before the end of 2018 under a 20-year power purchase agreement to be signed with Taipower.

Taiwan has one of the world’s largest solar-cell manufacturing industries, with some 11GW of manufacturing capacity. But the industry has long struggled due to the huge capacity in China that continues to press prices downward even as global demand rises. EnergyTrend, a division of Taiwan research firm Trendforce, forecasts 2017 worldwide demand as reaching nearly 100GW.

Local cell makers have long hoped that domestic demand would make up for poor global market conditions. They note that Taiwan’s compact geography, good FiT rates, and harsh climate push the market towards higher-output panels, an area in which Taiwan specializes. Taiwan has invested heavily in high-efficiency Passivated Emitter and Rear Cell (PERC) technology and the government offers a 6% premium on FiTs for “high-performance” panels.

Equis Fund’s communication director, Roberto Devido, says that the EPA made a “strong request” that ecological considerations be factored into the bid. Equis Fund took a number of steps to mitigate the impact of the development on the wetlands in the area and in line with the government’s request included an environmental education element in its bid.

While many remain skeptical that Taiwan can reach the targeted scale of solar generation on the existing schedule, Equis Fund expresses confidence that its project will be successful.

“We are very excited about this project in Taiwan, as it’s going to be the largest development of its size for the country,” said Devido. “For us it’s a very straightforward process that we’ve done well over a hundred times around the region. The government is behind this and they are interested in seeing it succeed.”