Electricity bill rate in Singapore is one of the lowest in the world. As of year-end 2017, it was S$0.07 per kilowatt hour (kWh), or US$0.005/kilowatt hour (KWh). But what does this mean? Basically, it means that your electricity bill will cost you an approximate of S$7 per kWh, or US$5 per kWh. Singapore electricity bill rate may seem very cheap, but it is not so cheap if you take a look at the cost of electricity in schools and hospitals.
Why Singapore electricity bill rate is low
1. The electricity market and supply in Singapore is fully deregulated
This means that there are more private power generators in Singapore. The government has allowed private power generators in Singapore to set their electricity rates, which means that there will be a limited number of power plants (generators) and their prices may vary. High-cost electricity is charged higher rates than low-cost electricity.
2. Since 2014, the government has required all power supply companies to submit an electric tariff scheme to the Ministry of Finance every year
For 2015 (revised tariff scheme), the average domestic residential electricity customers (both flat and non-flat) paid S$0.07 per kWh This is equivalent to an annual bill of S$7 for a typical 5,000 kWh monthly consumption (energy bill). For non-residential users, the average domestic customers paid S$0.097 per kWh (S$10.7/kWh) and non-residential users paid S$0.1269 per kWh (S$13.69/kWh).
3. Singapore is a small market, with a high penetration of power generators
There are many power producers in Singapore, such as Japan International Cooperation Agency and Singapore Power Corporation (SPC). There are only 10 million households in Singapore, while there are 17 million households in Japan with a population of 125 million and 2 billion households in the world which have a population of 5 billion people this lowers Singapore electricity bill rate. Some of the power generators in Singapore include Japan International Cooperation Agency, SPP and local power producer Energiya.
4. The growth in electricity and gas prices are relatively small
In July 2017, SPH released the latest power price changes for July 2018. The average residential price rose by S$0.01 per kWh, or 0.3 percent, to S$0.084 per kWh from S$0.077 per kWh in June 2017 (a price decrease of 7 percent from the previous month). The non-residential users (commercial industries) charged consumers an average of S$0.14/kWh, up by 2 percent from the previous month’s average of S$13.33/kWh of June 2018
5. The government has set a target to reduce electricity prices for both the consumer and business to S$0.05 per kWh
If the government succeeds in cutting the electricity rates, it would provide a significant boost to Singapore’s economy. In his Budget Speech 2017-18, Finance Minister Heng Swee Keat stated that the government aims to lower electricity prices so that they “will be equivalent to S$0.05 per kWh”. The minister added that this would bring Singapore’s average electricity price below US$0.005 per kWh.
6. The government has also implemented a comprehensive industrial policy
Many businesses, such as factories and the manufacturing industry, are deemed to be using the cheapest electricity at low-cost rate. The Industrial Energy Efficiency Policy grants discounts on Singapore electricity bill rate for factories and industries, as well as other businesses.
For example, when a factory uses energy more efficiently (within their energy plan), they are given rebates on the kWh of electricity that have not been consumed and the difference between the estimated consumption (dependent on the cost of electricity) and actual consumption is paid back to them. As such, it means that companies in Singapore can enjoy lower costs on their power bills.
Also read: 5 Reasons Why Singapore’s Education System is More Successful Than Any Other Nation in The World
