>> Founder and CEO of Ditrolic Solar traces his rise in the industry and evinces staying power
By LIYANA FAUZI
"AT our core, we're an engineering company. We started off by relying on our engineering strengths, as a solution provider. Now, we see ourselves as an innovative and technology-driven solar company," said Tham Chee Aun, founder and Chief Executive Officer of Ditrolic Solar, when he explained what is central to his company's operations. These days, Ditrolic Solar mostly deals in downstream activities which covers project development, financing, design and construction, operations and maintenance, as well as power production for the Southeast Asian solar market. The company has made a sprawling reach with its presence in the region, starting with Headquarters in Johor Bahru and subsequent offices in Kuala Lumpur, Sabah, and Singapore respectively. Ditrolic Solar is now an
established regional solar provider due to their many projects in countries such as Bangladesh, Indonesia, and the Philippines.
"Our revenue stream is mostly from constructing power plants and electricity sales. We sell electricity for a profit in addition to constructing and owning assets that produce electricity. We've done about 40 megawatts of installations to date, and another 60 is under construction. So, we‘ve successfully developed 100 megawatts worth of projects and we've another 110 megawatts in the pipeline - upcoming projects. We hope to realise this in the next one to two years," Tham continued.
Small and commercial power solutions are also provided by Ditrolic Solar. In order to remain relevant in the industry, Tham had the foresight to diversify his company's services throughout the solar value chain. Transitioning from solely an engineering company to a more inclusive downstream company paved the way for Ditrolic Solar to gain a variety of experiences through a colourful portfolio.
"You can see from our background that we have knowledge in many different types of solar systems. Starting from very small solar battery systems to systems for houses, hotels. We even did a hybrid system project for Telekom Malaysia on an island. To get to the site, we had to take a boat for 45 minutes every morning and then we had to hike up a hill for almost an hour. And with all the batteries, solar panels… That was also a part of our experience," Tham recalled with a chuckle.
It has been quite a ride for the company's founder and CEO. Tham's journey into the solar industry had humble beginnings, jumpstarted by a rare opportunity right after completing his education.
"I worked with an engineering consultancy firm after graduating, where I was seconded to a construction project. I was tasked to handle this rather large project all by myself as a fresh graduate. It was worth RM 300 million; there was intense pressure and it was a very steep learning curve for me. I was about 25, 26 years old, handling the electrical and mechanical constructions - major parts of the project. I was thrown into the deep end basically, but I managed to survive rather well. Made a lot of friends along the way," he added good-naturedly.
"I was there for about two years when I started to feel that I should do something on my own. My father owned a small electrical company; he was already retired by then, but the entity and the company name remained. So, I was always hoping that I could one day go back to Johor Bahru and start my own business through my father's company. It would be easy for me because the company name was already there.
"I started looking for opportunities for my business while also working for the engineering firm. I secured some small electrical and mechanical contracts at other construction sites. For about a year, I was running between two job sites at a time. I couldn't keep it up. So, I told myself to start concentrating on my own business. That's when I quit the firm and started to look for opportunities for my business full-time."
While there were needs for electrical system installations here and there in the beginning, eventually Tham realised that he would not be able to compete as a one-man show against large companies in the long run. The market was in bad shape then and there was no feasible way for him to scale up his business. Though as luck would have it, Tham soon came across a solar course that was open for registration.
"The solar course was funded by the United Nations and the Malaysian government to train solar engineers. I had a lot of free time, so I enrolled in the two-week course. I passed, got myself certified, and began my solar journey. I knew that solar was the way to go forward because during my university days, we had renewable energy courses and it was very interesting at the time," said Tham.
"That was probably 15 years ago when RE wasn't very common. There was not much to learn from, at that time. There was practically nothing on the internet if you tried to do research on solar. I had to get info from various sources. I went to libraries and learned from manufacturers. I studied installation manuals from suppliers. There was just literature, no authority or schools teaching you how to install a solar panel."
Tham's discipline and dedication drove him to clock in at the office every day, even if there was no business to attend. He would instead read and learn something about solar by himself. Very soon, Tham also found that awareness of solar energy was very low, so it was difficult to acquire any business at all. It was not enough just having something to sell - there was no market interest, and thus no customers.
He quickly discerned that he would have to partner up with a bigger company. Sanyo, a Japanese manufacturer of solar panels, would be Ditrolic Solar's first partner of many. They had the equipment, but they did not have the solutions. Tham essentially became their engineering partner, designing and applying Sanyo's solar panels across the Southeast Asian region.
In 2009, Ditrolic Solar's very first assignment was to supply a small system to Myanmar. Tham had seeded the Singapore office by then, when he realised that there would not be any business happening in Malaysia - he had to look at the bigger market. For this first project, Tham sportingly admitted (with a laugh) that he bought the components from the United States using his father's credit card. He assembled the system himself in his sister's flat in Singapore in about two weeks. The system made it to Myanmar after a truck ride to the Singaporean port (the truck was driven by Tham, of course).
The company's big break occurred just the following year when Tham secured an order for 100 sets of a system to be delivered to India. The project was worth about 300,000 USD, a huge deal for the young company.
"I gathered the whole family to help assemble the systems. We had to do it in a month. We assembled day and night in Singapore, did the packaging, tested the systems, everything. And we weren't a factory, so I had to rent a small storage space where the goods are delivered, unpacked, and then assembled according to my design. Then they were repacked with Ditrolic's packaging and sent to India," Tham shared.
"After that we started doing more systems for countries like the Philippines, Indonesia, Vietnam. These were all just simple systems, geared towards urban areas. We would design the system, engineer it, deliver it, and then build it where it was delivered. For that last step, we would work with the local installation partners. We were involved in the entire process."
News of the Malaysian government putting into place a policy to drive the solar industry in the country caught Tham's attention. Ditrolic Solar shifted its focus back to its home country and endeavoured to establish a presence there. The company would carry out about two to three projects a year, mostly for other companies to acquire their Green statuses. When FiT was officially implemented in 2011, Ditrolic Solar was one of the early companies to subscribe to it.
"We really started from scratch, but from the outside in instead of ‘expanding.' There was no natural demand for solar at that time, it was all policy driven. You can be in a very big market one day and suddenly there's an incentive programme in a country and then everybody will be rushing to that country. It's very much an incentivedriven kind of industry. Our timing was right with Malaysia. We managed to catch that wave and that's where we built from," said Tham.
"In my opinion, Malaysia is a maturing market. I think we have the most number of solar companies in the whole of Southeast Asia, easily. Back in 2007, the government started a subsidy programme which slowly evolved into FiT, and then NEM. And now we also have the utility-skill programme. Basically, the Malaysian market has come full circle. Now we're embarking on large-scale projects, so we're heading towards a more natural market. Solar in Malaysia has reached a stage where it's become one of the cheapest energies in the region due to government policy."
From a regional perspective, Tham observed that Malaysia and Thailand are pioneers in the solar industry. Malaysia started with distributed generation from rooftop systems while Thailand focused on large farms for centralised generation. Today, the two countries have coincidentally switched roles in solar generation and are expanding their expertises in their new domains.
Tham also discussed the solar and energy markets in Singapore where Ditrolic Solar has had a foothold in since the company's emergence.
"We've seen the growth of the Singaporean market and we have installations there as well. There are no incentives in Singapore, no subsidies from the government. It's totally driven by private initiatives. It's a very tough market, but Singapore has one of the most open electricity policies in the region, if not the world. Anybody can generate electricity, you just need a license to feed into the grid. You can sell and you can buy. There's an energy market authority that controls the prices. It's very open, so it drives the electricity price very low," Tham explained.
On the more technical side, Tham elaborated on his company's inverter of choice with Huawei Technologies.
"Huawei's string inverter is a component that we've used in recent years. Since they broke into the Malaysian market about two years ago, we've been working and engaging with them, trying to sell their product because we believe in their quality. The decentralised string inverter is very suitable for the Malaysian market because it's primarily driven by distributed generation. The strengths of the string inverter include being able to isolate your losses when there's a problem with your system and you lose power generation.
"Their failure rate, however, is very low and defects are replaced very quickly. Huawei provides very good customer support - they have technical engineers on the ground. Even small problems are attended to very promptly," Tham confirmed.
String inverters had not been catching up with the market because of their expensive prices compared to centralised inverters. Since Huawei entered the scene, they have managed to set very competitive prices for string inverters. This has opened up a whole new possibility to utilise string inverters in large-scale solar farms.
"Huawei's size as a corporation and their competitive prices give them credibility and bankability. Bankability in the solar industry is very important because installations typically have to last 20 years or more. So, a strong company like Huawei is very important to us. As someone who sells, and because our reputation is also at stake, we think Huawei is a formidable brand to collaborate with," said Tham.
One of Ditrolic Solar's notable projects that utilises Huawei inverters is installed on the rooftop of the Singapore Changi Airport. At 3.6 megawatts, it is the largest single-roof installation in the country. "A lot of people don't know that we're also one of the largest commercial rooftop solar companies in Malaysia. We've installed more than 40 megawatts of projects, of which close to 30 megawatts are on the rooftops of commercial buildings in Malaysia. We have a very strong track record and count large companies such as Singapore Changi Airport, Siemens, IJM, SP Setia, Toyota, and Panasonic as our customers."
Last year, Ditrolic Solar secured a 60-megawatt project in Bangladesh which is currently in the works. A major milestone for the company, this large solar farm costs about RM 350 million and the expected COD is in February 2018. "This is one of the largest projects ever developed by a Malaysian or Singaporean company in the region. We're particularly proud of this project because typically a project developer of this scale would be European or American. We're one of the few local Southeast Asian companies that has managed to develop a project like this all by ourselves. This project also received a grant from the Japanese government, the climate change fund where the carbon credit will go towards reducing carbon emissions," Tham enthused.
"This doesn't happen often. It's the largest project to ever be given a grant by the Japanese government to mitigate carbon emissions. The project is also funded by a consortium of European banks. A lot of effort has gone into developing and structuring the project. 60 to 70% of the work goes into planning and development. The rest is building the power plant. All of our systems go through extensive engineering design assessments. Our systems typically have very high performance ratios, close to 80%. There are some larger projects where our ratios are a little higher, 82 to 83%. One of these is located in Johor which is typically known as one of the lowest sunshine states."
Ditrolic Solar's vision is for solar electricity to become very competitive and ultimately be cheaper than the conventional electricity price. Tham is optimistic that this will happen soon as he thinks that the industry's outlook is looking good.
"We plan to continue to ride this wave and and aim to be a leader in creating the market. If there is no drive from the private sector, I think it would be very difficult for the public to be aware of the benefits of clean energy. We also plan to expand our business, especially in Malaysia, to replicate our business in different countries in the region, to grow our company's size, and to drive down the cost of solar installations at the same time.
"Currently there is a mismatch between the price of systems and the buyback price under the NEM policy. This makes smaller systems, especially residentials, not look very attractive. But it can only get better - extensive participation from the private sector is dropping the prices of solar systems and making them more viable for day-to-day living. I also think that the government has a very good and comprehensive solar road map as Malaysia is now one of the largest suppliers of solar panels in the world. This includes manufacturing, adopting solar systems, and exporting expertise. We're one of those Malaysian companies to have exported our expertise abroad," Tham added.
Additionally, Ditrolic Solar has also invested in some solar technologies, one of which involves an innovation in solar modules that produce higher energy yields compared to the conventional model. This falls under the company's few upstream activities in the technology segment, and Tham hopes to commercialise it by the end of the year.
"There are two types of solar companies: those that have a long-term outlook for the industry and those that want to take advantage of the business incentives in the short-term. There are probably close to 200 solar companies in Malaysia and the majority of them are probably there to serve the FiT market. We're one of the few that's in it for the long run," Tham affirmed.
"We have a very good team - our strong management team helped me bring the company to where it is today. I'm supported by our Project Director, Sales Director, senior management, and all of our employees. We work well together, which is why we can become what we are today. We can take on jobs in many countries, locations, offices, because we have a very strong management team. I hope we can continue the good work together."