Young entrepreneur Joshep Lee aims to make solar energy accessible to businesses via leasing and investment models
BY the nature of our country's climate, hot and wet all year round, harnessing solar energy should be like collecting water. However, the uptake is still low due to the high upfront costs, especially for businesses.
But for young entrepreneur Joshep Lee, where there's a will, there's a way.
The 29-year-old from Sarawak founded a solar investment firm called Gagasan Solar, with the aim of facilitating solar energy usage among businesses via a leasing model, and inviting investors to provide the service in Malaysia.
HOW IT STARTED
According to Lee, who is also Gagasan Solar executive director, his approach to solar technology is different from other solar providers.
While many solar providers focus on developing the technology, Lee has decided to bank on proven ones.
"We're not into developing technology for solar. Tech developers must develop an unproven, uncommercialised technology, and demonstrate its real-world and commercial applications before even beginning to commercialise the technology.
"Even after commercialising the technology, it takes years (decades, in the case of solar photovoltaic technology) before the technology achieves economies of scale, when its cost is reduced to a point where it is adopted by the mass market," he explained.
And he's into creating funds for solar energy in business applications.
"With our solar fund, we're not inventing anything new. We're using a decades-old, proven technology that has already achieved economies of scale from large-scale manufacturing and global commercialisation. Our operation in the Malaysian market comes in the form of business model innovation.
"In fact, even the business model is a proven one in developed economies. The difference between tech developers and us, therefore, is that we're ready to generate solid financial returns immediately with low risk," said Lee, who used to work in investment banks and private equity companies in Singapore and Australia.
MODELS FOR MALAYSIAN CONTEXT
Gagasan Solar intends to introduce new business models in the Malaysian context, using existing and proven technologies that have benefited from economies of scale and mass adoption.
"We do this because of the low level of risk and immediate financial returns, as opposed to developing new technology, which has far higher risk and longer lead times to generate returns," said Lee.
"Gagasan Solar invests in the development of solar plants in commercial and industrial businesses, such as manufacturers and shopping malls. Our revenue is generated from the supply of solar energy to these businesses at a competitive rate. Through us, commercial and industrial businesses stand to benefit from cheaper, cleaner energy that meets increasingly stringent environmental, social and business governance requirements," he explained.
FUTURE OF SOLAR
Lee said the immediate future of solar power technology is third-party ownership.
"In Gagasan Solar's case, we own and operate the solar plants placed on our commercial and industrial clients. This has several benefits for our clients," he said.
"Firstly, they see immediate return on investment through the reduction of their electricity bills with cleaner energy, without having to outlay any capital. Second, we undertake the plant's operations and maintenance, meaning our clients do not have to worry about the plant, allowing them to focus on their core businesses. This seamlessness solves a large financial and operational pain point for our clients," he said.
"Third, we and our clients both benefit from the economies of scale that Gagasan Solar can achieve through the cost reductions from our bulk purchasing of solar plant equipment and materials. This results in our ability to reduce our prices, benefiting our clients," he added.
In the mid-term future, Lee said a few interesting developments that solar energy users stand to benefit from are smart grids, battery technology and carbon tax.
"These three developments increase the proportion of solar energy within Malaysia's energy mix, leading to further decreases in pricing and carbon emissions," he said.
PLANS FOR NEXT THREE YEARS
Lee said Gagasan Solar intends to develop Malaysia's largest portfolio of commercial and industrial solar assets.
"Our goal is to build the next generation of Malaysia's energy infrastructure, where we believe solar energy plays a large part," he said.
To date, the company has completed RM76 million commercial and industrial solar construction projects, and has been involved in a collective RM1.5 billion of projects from all segments of the market, including large-scale solar power and residential projects.
"For the investors, our portfolio offers investors superior risk-adjusted yields through the strong cash flow and high-dividend nature of our business. Our focus is on risk reduction, with our portfolio being designed to be recession-proof and anti-cyclical," said Lee.