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Jakarta Post

Future looks bright for leading Taiwanese green tech company

It sounds as if Luke Chang has the perfect answer to Indonesia’s energy woes

Endy M. Bayuni (The Jakarta Post)
Taipei
Thu, July 8, 2010 Published on Jul. 8, 2010 Published on 2010-07-08T10:58:49+07:00

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I

t sounds as if Luke Chang has the perfect answer to Indonesia’s energy woes. The president of Motech Industries Inc. believes solar energy can, and will, make power more readily available and accessible to many people in developing countries, particularly for those who live in remote areas and islands.

In a few years time, with more research to bring production costs down and with the right government policy and support, solar energy will be able to compete head to head with other sources of energy. When that happens, solar will have huge advantages over most of its competitors for being both renewable and clean.

Chang, who does his own sales pitch around the world, has seen how solar energy has transformed the lives of people in remote islands in South Pacific countries such as Fiji, Palau and the Solomon Islands.

“Solar power empowers people,” he says, recounting how a solar power project in a village in Palau not only brought electricity into people’s houses but was also available for education, computers and healthcare facilities, and had transformed people’s lives dramatically.

Chang has set his sights not only on developing countries, where solar energy seems the most practical solution, but also in developed countries, including his own beloved Taiwan, which are leading the world in putting clean energy to use. The solar energy programs of Germany and the United States are currently the best in the world.

Motech, with operations in Taiwan, China, Japan and the United States, is currently the world’s eighth-largest producer of solar energy. However, you wouldn’t be able to tell this just by visiting its headquarters in Taipei’s Sheng-Keng district. The office is small and shares a building with a 7-Eleven convenience store.

“This is where the company started in 1981,” recounts Chang, who joined Motech nine years ago, just as he was about to enjoy a life in retirement after a long career with Texas Instruments.

The Shen-Keng office is a reminder of the modest beginnings of Motech, which like all Taiwan industries started as a small-medium company, but then grew to its present size and global eminence thanks largely to its investments in research and development.

Taiwan ranks among the biggest investors in the world in terms of its research and development, spending an average 2.6 percent of its GDP, thanks largely to government encouragement and support through tax incentives.

“Taiwan has to invest heavily in R&D in order to stay competitive, globally,” says Huang Shih-chou, the deputy director general of Taiwan’s department of international cooperation at the Ministry of Economic Affairs.

“We are increasingly moving into hi-tech industries.”

Chang declines to state how much money Motech invests in research but admits it is a considerable amount.

In its research, the company receives assistance from Taiwan’s top universities.

Motech is currently conducting research to find a more efficient use of silicon, the main material required in the production of solar cells, Chang says, adding that “This should bring the production costs down considerably in coming years.”

As president of Motech, a large part of Chang’s work is spent talking to government leaders around the world who control the power industry either directly or through laws and regulations.

“Each country is run differently,” he says when asked to pick which government he had found most difficult to deal with.

Chang’s task is also to convince governments to develop the solar energy sector, and his slide presentation includes rates of return on investment (between 6 and 8 percent a year) and a scheme whereby private investors, including individuals, who invest in solar panels can sell power to companies that control the power grid.

Since panels can be installed anywhere, solar energy is also ideal for off-the-grid standalone power generators, making it attractive for remote areas and islands.

One major challenge to solar energy at present is its price, which makes it seem financially prohibitive without a government subsidy scheme.

Industry estimates put the cost of generating 1 kilowatt-hour of electricity from solar energy at between 15 and 30 US cents, compared to around 4 cents for natural gas or 5 cents for coal or wind. Solar power is not even competitive against nuclear power, which costs between 11.1 and 14.5 cents; hydropower, between 5.11 and 11.3 cents; or geothermal, which ranges between 4.5 and 30 cents.

But as with Chang, many in the industry believe it is only a matter of time (meaning a few years) before the cost of solar energy starts to come down.

Straddling the equator, Indonesia is most suited to this technology because it gets sunshine throughout the year and gets more than most other countries.

Simple logic tells you that if it costs 50 cents to generate 1 kilowatt-hour of electricity in Germany, which gets an average of two hours of sun a day, then it should cost Indonesia half as much since it gets an average of 4.5 hours of sun each day.

So has Chang, who says he gave more than 100 presentations last year, made his sales pitch to Indonesian companies yet?

“We have had inquiries and visitors from Indonesia, but none have followed up,” he says.

 

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