By Leong Hung Yee PETALING JAYA: Residential homes which produce solar energy under the Renewable Energy (RE) Act 2010 will be paid more than industrial producers but the cost of setting up solar panels in homes will be higher due to the lack of economies of scale.Under the RE Act 2010, a small-scale solar photovoltaic (PV) producer, meaning a household, could potentially earn up to RM1.75 per kWh of electricity produced by selling the power to Tenaga Nasional Bhd (TNB). Consumers who installed capacity up to and including 4 kWp (kilowatt peak) would be paid a feed-in-tariff (FiT) of RM1.23 per kWh, said Energy, Green Technology and Water Ministry's RE/Malaysia Building Integrated Photovoltaic Technology Application (MBIPV) national project team leader and chief technical adviser Ahmad Hadri Haris.
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“However, with the bonus criteria such as installation of solar PV in buildings or building structures, they will be paid an additional 26 sen on top of the RM1.23 per kWh,” he told StarBizWeek. Consumers who installed solar PV for use as building materials will get an additional 25 sen and they will also get another three sen for using locally manufactured or assembled solar photovoltaic modules. Meanwhile, for producers generating above 4 kWp of solar PV electricity, and up to and including 24 kWp, will be paid RM1.20.
A solar farm producing capacity above 1 MWp, and up to and including 10 MWp, will be paid 95 sen only.
Ahmad said the lower FiT for large-scale producers was due to the “economies of scale” they received, given their bigger production compared with that from those singular solar panels from a normal household.
“We make it fair for all to make equal returns and give opportunities for all to participate in this scheme. The FiT varies depending on the production capacity,” he said. Ahmad said the cost to produce a 1KW of solar electricity would be about RM15,000 but 1MW might only cost RM10mil instead of RM15mil due to economies of scale. “We recognise the higher set-up cost for smaller producers, thus we give a higher FiT to enable them to recover and earn some money,” he said.
Some are saying that the FiT is not commercially viable for people to start investing in solar PV. “Nothing is perfect but it is a good start. The responses that we received from the industry so far are very good,” Ahmad said. He said all solar PV producers would be guaranteed an income for up to 21 years from the date of signing the agreement. “Consumers producing 4KW of electricity at home will be earning more than RM400 a month. It will be a secondary income generator,” Ahmad said, adding that the current practice was “net metering” for electricity generated from solar PV, whereby TNB would deduct the production from consumers' consumption on a contra basis. Ahmad said there was also an initial annual degression rate of 8%, and technology would become cheaper progressively.