Rooftop Solar Power Is Struggling to Take Off in Hong Kong. What Went Wrong?
- Selena Liang
- 4 hours ago
- 11 min read
Hong Kong is full of contradictions: as the city with the most skyscrapers in the world, it has 40% of its land designated as country parks. It is the city with the second-highest concentration of billionaires in the world, yet its local government has seen a budget deficit for five of the past six financial years. The average Hong Kong resident uses less than half the energy of the average American and one-fifth that of the average Singaporean. However, over 60% of Hong Kong’s carbon footprint can be attributed to electricity generation by fossil fuels.
Rooftop solar promises to thread the needle, taking advantage of Hong Kong’s dense, vertical landscape to provide clean, reliable, affordable energy.
“Solar energy is a green source of electricity, and I can earn income from it,” said Yintung Cheung.
A former elementary school teacher, Cheung is now a fundraising consultant who counts Greenpeace and the World Wildlife Fund among his former clients. He is a resident of Fairview Park, a suburban gated neighborhood in the northwestern New Territories, just a stone’s throw away from the Shenzhen border. Of the 5,000 semi-detached houses in the sprawling development, a rarity in the city, roughly one-tenth of them are equipped with solar power systems.
Residents, schools, and non-government entities have been actively installing rooftop solar systems since the government introduced fifteen-year financial incentives via the Feed-in Tariff (FiT) Scheme in 2018. Those living in detached houses, like Cheung, have been especially keen: The solar panels reduce air-conditioning use by insulating rooftops, cooling room temperatures by up to 5˚C (9˚F) if properly installed. It took Cheung less than four years to recoup the cost of his own 20kW solar power system; had the FiT Scheme not existed, it would have taken him three decades.
Yet, according to the most recent data released by the Hong Kong government, less than 0.5% of the city’s electricity came from solar energy. At the halfway point of the FiT program, Hong Kong’s solar energy production still lags behind most developed countries or regions, clocking in at a quarter of the levels of Singapore, a region of comparable population density and solar irradiation.
“I’m sometimes disappointed that the government is not being intentional about increasing renewable energy use. They only take the low-hanging fruit of importing electricity from Mainland China,” said Cheung.
How does the scheme work?
Under the Scheme, from 2018 to 2033, individuals or non-governmental bodies can sell solar or wind-generated electricity to utility companies at rates higher than what utility companies charge customers, with the highest FiT rates being granted in small, household-scale systems (≤10 kW) to compensate for economies of scale. This means that those who install solar on their rooftops can use it as a source of income, paying only the prevailing rates for their electricity consumption (around $0.13/kWh).
Unlike similar Biden administration-funded rooftop solar programs in the United States, the program is not means-tested, and there is no annual quota. Because the electricity generated from solar panels goes directly into the grid, Cheung also doesn’t need to install batteries and replace them every few years.
The Hong Kong government has signed decade-long agreements with two shareholder-owned utility companies, CLP Power and HK Electric, with options to extend the agreements for an additional five years. The recent agreements have included the FiT Scheme and reduced the companies’ profit margins from 9.99% to 8%, far below the average of 10.62% requested by American power companies.
To offset part of the cost, the utility companies can sell renewable energy certificates to buyers (such as banks) who wish to claim their businesses or activities are carbon-free. The utility companies are also allowed an extra profit margin for renewable energy produced by them or their customers.
In the ten years before 2018, only 200 non-governmental renewable energy systems were connected to the grid. Since then, as of March 2025, around 26,800 FiT applications have been approved, and around 25,000 systems have been connected to the grid. Most applications are for solar energy systems, and more than 80% of applications are for small-scale systems — mainly in detached houses.
In the ten years before 2018, only 200 non-governmental renewable energy systems were connected to the grid. Since then, as of March 2025, around 26,800 FiT applications have been approved, and around 25,000 systems have been connected to the grid.
Installing solar panels in high-rise apartment buildings or commercial buildings often faces more challenges compared to those in detached houses. For one, high-rise rooftops often have practical functionality.
“In Hong Kong, most rooftops have already been occupied by facilities such as equipment rooms, pipelines, outdoor air-conditioning units, suspended platforms, landscaping, recreation spaces, and fire refuge areas,” a spokesperson of the government’s Electrical and Mechanical Services Department told The Xylom.
The other challenge is shade: tall buildings cast long shadows that block sunlight from reaching solar panels of nearby buildings. Integrating solar panels into the facade and external walls of a building, known as building-integrated photovoltaics, has not been widely applied either, due to cost and administrative concerns.
That said, data obtained from the government’s Environment and Ecology Bureau by The Xylom shows that although nonresidential entities completed less than a fifth of total FiT applications, they have installed half the capacity of solar power under the scheme. In 2024, the government launched a pilot scheme on transparent building-integrated photovoltaics at its Electrical and Mechanical Services Department offices to explore the relevant applications.
Schools and non-profits also benefit from the FiT Scheme. By installing solar panels on roofs, these organizations can earn income to cover part of the electricity fees or enhance environmental education.
“We are a Catholic school; by default, we should be an environmentally friendly school and be good stewards of this planet. We touch on environmental issues in our science and religious classes. We thought it would be great to promote climate education through installing solar panels,” said Sammy Shum, principal of Aberdeen Technical School.
The school has installed a 44 kW solar PV system on its historic campus, which meets the annual average electricity demand of 11 households. FiT earnings are used for education, such as training students to introduce guests to the school’s solar power system and the power generation mechanisms behind it.
Technical Challenges and Additional Costs
Despite its benefits, the FiT Scheme is no silver bullet. Residents, experts, and organizations interviewed for the story told The Xylom that the first barrier to widespread solar power adoption is the technical, financial, and administrative challenges during the installation process.
The first major concern is to determine whether a building is structurally sound enough to support solar panels. The main building of Aberdeen Technical School just turned 90 years old this year.
“Some members of our management committee were alumni, who became very concerned about our campus’s Grade III historical building designation. Would [the solar panels] affect its appearance? Would there be liability issues?” Shum said. The Aberdeen Technical School had to test the loading on the roof before making the decision.
“We are a Catholic school; by default, we should be an environmentally friendly school and be good stewards of this planet.”
The second major concern is potential roof leaks. At first, fixing the solar panels on the roof required drilling directly through the roof, which would result in leaks if the holes were not properly sealed. Some installation companies later improved their installation methods, but Cheung, the fundraising consultant and homeowner, still recommends waterproofing before installing solar PVs, especially in aging buildings. (Cheung himself spent nearly $8,000 on waterproofing, amounting to nearly a fifth of the total installation costs.)
Shum said Aberdeen Technical School spent between $500,000 and $640,000 on waterproofing — more than twice what the school receives from the government for building upkeep and maintenance.
“We were thinking, should we spend three years on waterproofing before installing solar panels?” Shum said. Fortunately, the Education Bureau helped the school advance a few years of its repair and maintenance funds to cover the waterproofing cost. After two years of preparation and communications with the government’s Antiquities and Monuments Office, the solar panels were finally installed.
Residents in particular face challenges in upgrading their power systems and finding reliable installation contractors. Most households in Hong Kong, as well as light commercial customers, receive electricity through a single-phase system using one live wire and one neutral wire. However, to make 10 kW or larger solar power systems viable, customers must upgrade to a three-phase system that uses three live wires and allows for a more efficient and consistent delivery of electrical power.
“If you only have single-phase power, you can only install a 2-3 kW system. That is not worth the investment,” said Kent Fung, the owner of a solar power system installation company and a Fairview Park resident. Not only would a smaller 2-3 kW system not cover the whole roof or provide heat insulation, but there would be minimal installation savings in terms of prevailing wages.
“You will need more than 10 years to recover the costs,” he added.
With the latest technology, Fung said the work of changing to three-phase power could be done mainly outside the house and would cause little nuisance indoors. However, the additional six to nine months, as well as the high cost of up to $6,000, could become a source of dispute between customers and contractors.
Compared to residential consumers, schools and NGOs receive more governmental and expert support in handling technical issues.
“I do not feel burdened as we received help from [CarbonCare InnoLab staff]. If I have to do it myself, I will find it difficult and my teaching time reduced,” said Tsang Chi Yeung, a teacher of Aberdeen Technical School.
CarbonCare InnoLab is one of the nonprofits that helps schools and other NGOs install solar PV systems. The organization not only helps with the application process and maintenance, but also holds climate education activities for the school.
“We place a great emphasis on [our multi-pronged strategy] on educating the public and young people on climate,” said Ivy Leung, Executive Director of CarbonCare InnoLab. “We have a lot of solar system tours. We hope schools and members of the public can understand the mechanisms of solar PVs and how they can help with Hong Kong’s 2050 carbon-neutral goal.”
What Happens When the Scheme Weakens?
Publicly available data from utility companies revealed that the number of new applications has cratered since 2022, when the Hong Kong government lowered FiT rates as previously planned. It further declined when the Hong Kong government concluded the Solar Harvest Scheme, which provided one-stop services for solar installations in schools and NGOs, in 2024.
Cheung thought at the time these lowered rates were reasonable, as the original intent of the scheme was to allow residents to recover their costs within seven to ten years of installation, while solar technology became cheaper as the technology matured. In reality, Fung, the solar panel installer, found that the price of a 10 kW system installation has remained stable over the years, at around $19,000.
“The price of solar panels has dropped slightly, but that of other components, such as inverters, has gone up. Wages have gone up, too,” he said.
“Even if you had a highly efficient system [like mine] that could recover the cost in three to four years, the real amount of time you could earn income if you installed now is at most another three to four years, and that doesn’t factor into the risks of system breakdown,” Cheung said.
Items | Cost (in USD) |
Installation cost | 19,000 |
Waterproofing (if needed) | 4,000 |
Changing to three-phase electricity (if needed) | 4,000-6,000 |
Maintenance cost (per year) | 410 |
Replacing the inverter (every 5-15 years) | 1,300-2,500 |
FiT earnings (per year) | -6000 |
Table: Lifetime costs of a 10 kW solar power system
In response to The Xylom’s enquiry, the Environment and Ecology Bureau countered that Hong Kong’s FiT rate “was still one of the most attractive in the world” when compared to local power rates.
“As renewable energy technologies are maturing, the trends in China and the world are to gradually reduce and cease subsidies for renewable energy,” said a spokesperson from the Environment and Ecology Bureau. They added that Hong Kong’s FiT Scheme would “unlikely” be extended beyond 2033. If that were to happen, owners of renewable systems could use the electricity generated for their own consumption.
Cheung and Fung agree that as the FiT program nears its halfway point, the lack of clarity about what happens after 2033 is a big factor that prevents people from installing solar PVs.
“No one knows what the plan is after 2033,” Cheung said. “Will the utility companies buy electricity from me at prevailing rates? Or should I buy storage batteries? That’d be wasteful.”
Cheung points to the United States’ regulatory and policy uncertainty as a cautionary tale:
“[Democrats] are supportive of solar energy, so a lot of these facilities were built. The moment [Republicans] replace them and support oil and gas development, all these solar panel investments […] go down the drain,” he lamented.
On August 5th, The New York Times reported that the Trump EPA announced plans to claw back $7 billion in grants for solar energy, including the “Solar for All” program in Georgia, where The Xylom is based, and one of six states Trump flipped in the 2024 Presidential election. (500 households registered for a randomized drawing in the 24 hours since its application portal opened on August 4th.)
The path ahead
At present, Hong Kong’s electricity mix consists mainly of natural gas (55.5%), nuclear energy (less than 24.5%), and coal (20%). Renewable energy only accounted for 0.8% of the electricity mix as of 2022.
Although a government-commissioned study in 2019 estimated that Hong Kong’s rooftop solar energy can at most account for 1.1-2% of its electricity use at 2016 levels, experts at the Hong Kong Polytechnic University estimated that rooftop solar PVs alone could account for more than 10% of Hong Kong’s electricity use, meeting the Hong Kong’s Climate Action Plan 2050’s goal of increasing the share of renewable energy in the electricity mix to 7.5% to 10% by 2035, the first step to reaching carbon neutrality by 2050.
Fung, who has been running his small solar installation business since 2018, said that as solar panels can insulate rooftops from the sun and act as canopies for the roofs of detached houses, some residents are still interested in installing panels despite lower financial returns. But hesitance remains in the market, and customers are dwindling: his company lost money last year after turning a profit in the previous two.
“No one knows what the plan is after 2033.”
With the trend of decreasing FiT installations, even the most optimistic projections won’t see Hong Kong reaching the modest target of generating up to 2% of electricity from solar power by 2035.
“We really hope the government can look at the pace of renewable energy development in Hong Kong before deciding when to stop the Feed-in Tariff Scheme,” Leung of CarbonCare InnoLab said. She urged the government to provide more flexibility in the Feed-in Tariff Scheme, such as offering longer-term contracts for new installers, instead of setting a hard sunset provision in 2033.
In Fairview Park, Cheung has actively promoted solar PVs to his neighbours. He said residents share information on company pricing, new technologies, and maintenance, and help ease one another’s concerns. In the street where his house is located, 13 out of 30 houses have installed solar panels. However, he is not holding out hope for a meaningful energy transition in Hong Kong.
“If the government doesn’t have policies that go hand-in-hand [with residents and businesses], and it chooses to sunset the FiT program instead,” Cheung said, “Hong Kong won’t have a shot at meeting renewable energy goals.”
Reporting for this story was supported by Internews’ Earth Journalism Network.
