Korea, whose use of renewable energy in power generation is extremely low, will promote the solar panel rental business in a bid to boost demand for solar power, officials said Monday.

“The high cost of installing solar panels and to maintain facilities has kept households from turning to solar power. The government expects the leasing system to solve the cost issue and create demand for solar power, in particular, among households,” said Song Yoo-jong, director general of energy and resources policy at the Ministry of Trade, Industry and Energy.

Currently, about 5 million won ($4,500) is required if a household installs a solar panel that can generate 3 kilowatts.

If a rental system is introduced in the solar power sector, registered rental companies will install and maintain solar panels for home or building owners in exchange for a monthly rental fee. When the rental period ends, homeowners can extend their lease, buy the system, or have it removed.

The ministry expected homeowners using rented solar panels can lower their electricity bill about 20 percent even after paying the rental fee.

Solar power rental companies will be able to create profit from rental fees and sales of renewable energy points as the owner of solar panels, the ministry added.

“Companies that have rental business experience or small-scale builders have expressed an interest in the solar power business,” Nam Ki-woong, president of New & Renewable Energy Center, said.

“If the solar power rental business is well established in Korea, the solar power industry could be transformed into a consumer-driven one from suppliers’ market.”

To protect consumers, the ministry will allow companies using certified solar panels to open solar power rental businesses.

Besides the introduction of the solar power rental business, the ministry will expand compulsory supply of solar power allotted to power generators by 300 megawatts to 1.5 gigawatts by 2015.

Amid the continued power shortage in peak seasons, the government is delving into finding ways to increase power generation based on renewable energy sources. Korea produced only about 1.8 percent of its total power generation from renewable energy sources in 2012.

As the public distrust against scandal-hit nuclear energy is mounting, the energy ministry is under pressure to lower dependency on nuclear reactors in power generation, while increasing the portion of renewables.

However, it is not easy for Korea to increase the ratio of renewable energy sources in its energy mix as every renewable energy source has its own issue. For instance, a massive tidal power project in the west coast was suspended, pressed by roaring resistance from residents. There are few places appropriate for wind power generation in the small country. The gas-powered fuel cell business is also slow due to expensive LNG costs.

By Seo Jee-yeon  (jyseo@heraldcorp.com)