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Benefits from system in 5 years if register now

Published on: Tuesday, April 29, 2014

Kota Kinabalu: Payback time takes only about five years for households who install solar PV systems in their homes this year to benefit from the just announced Feed-in-tariff Malaysia schemes to sell electricity at bonus rates to Distribution Licensees such as Sabah Electricity Sdn Bhd but May 2 is the deadline to file in the application, leaving very little time to interested investors, said Edward Chua, Managing Director of BT Solar Sdn Bhd.

But application can be expedited by solar service providers registered with the Sustainable Energy the Development Authority (Seda) and Sabah has four such licensed providers through whom applications must be filed, namely Advanced Power Solutions (Borneo) Sdn Bhd, KK; BT Solar Sdn Bhd; RE Technology, KK; Ecogenera Bhd, Sandakan and Ernmaz (M) Sdn Bhd, Penampang, Chua said.

"The advantage to those who install solar systems this year come from the fact that the feed-in rate for solar is regressive, that is, 18pc reduction for subsequent years," he said.

"For example, a RM1 feed-in sale rate accruing to early bird investors in 2014 becomes only 82 sen for those who apply in 2015 and Seda's argument is since the cost of solar energy technology is falling rapidly, it has set a parity policy to encourage efficient renewable energy production to cost of generation matches cost of technology in the long run, Chua explained.

The five-year payback estimate is based on a premium rate of about RM128 payable for each unit of renewable energy sold to distribution licensee such as SESB or TNB in Peninsula, while the cost of investment per kilowatt (kW) is about RM8,000, he said.

"This year, residential in Sabah and Labuan are given a special quota of 2MW overall and under this residential category, owners of terrace, semi-detached and detached houses can install 5kW, 8kW and 12kW solar PV systems on the rooftops respectively but one applicant can apply to install two separate systems for two different houses," Chua pointed out.

"The attractive incentive that underscores this move into renewable energy lies in the fact that at a premium rate of RM128 per unit of solar energy sold, it means a kW system on a terrace house can earn up to RMM646 per month and RM1,026 and RM1,536 from a semi-detached and detached house respectively, which more than cover their electricity bills and leave probably enough monthly extras to pay for water, house assessment rate and other expenses but also the efficiency of the system counts," Chua noted.

The total capacity quota for commerce and industries on the other hand, is 5 MW for Sabah and Labuan .

The upper capacity limit for factories or solar farm is 1MW per commercial application but the feed-in rate sold to the distribution licensees in 18 sen lower than residential, Chua said .

The duration with which renewable energy that could be sold to the Distribution Licensees and paid with the FiT rate is based on the characteristics of the renewable sources and technologies - 16 years for biomass and biogas resources and 21 years to small hydro power and solar photovoltaic technologies.

However, only individuals and companies who hold an approved feed-in certificate issued by Seda are eligible to see renewable energy at FiT rates and bonus FiT rates apply only when the criteria for bonus conditions are met.

Chua said Seda entertains only applications filed in by service providers licensed by the Reda and urged interested applicants to take note of that point.