WHEN former US president Jimmy Carter installed solar panels to heat water in the White House in 1979, people probably thought he was mad.
After all, there was an abundance of resources for fossil fuel that provided fuel for cars and powered factories and buildings, so generating domestic energy seemed like a pointless endeavour at that time.
The solar panels were eventually removed by his successor Ronald Reagan. But Carter was well ahead of his time; in 2017, he went on to lease a piece of land for a solar farm near where he lived in Plains, Georgia, and today it provides 50% of the small town’s energy.
Today, 80% of the world’s energy comes from coal, oil and gas. However, as the negative effects of petroleum-based products such as air and water pollution, land deterioration and unhealthy carbon emissions further hasten global warming and the impact of climate change becomes more apparent, it is timely to rethink our future source of energy.
Closer to home, Malaysia’s energy mix is led by natural gas (41%), crude oil (26%) and coal (22%), with renewable energy making up the balance. Malaysia has started to embark on a mission of environmental preservation through implementation of various policies and regulations that govern green technology. It has made plans and is making good strides to enhance its share of renewable energy up to 31% by 2025, and 40% by 2035 via its present Green Energy Generation Plan.
During the unveiling of the recent 12th Malaysia Plan, the government announced an ambitious goal for Malaysia to achieve carbon neutrality by 2050 and affirmed its commitment to factor in environmental, social and governance (ESG) principles in decision-making process. Against this backdrop, we can expect to see tax developments that promote usage and implementation of renewable energy and green technology.
What is renewable energy?
Defined as energy that comes from sources that are replenished consistently, renewable energy can be obtained from various sources such as natural resources, as well as recyclable and clean energy which does not release harmful pollutants such as carbon dioxide.
Some examples of renewable energy include solar power, wind energy, geothermal energy, tidal power and hydroelectric power. However, not every form of renewable energy is green and clean at the same time as some may cause deforestation and environmental damage.
Why use renewable energy?
Fossil fuels that come from natural sources have a life span and will deplete over time. Renewable energy, on the other hand, provides a steady source of power without running out, and also causes fewer environmental damage such as harmful gas emissions and fuel spillage. It will also reduce carbon footprint and lower energy bills and import costs as we focus on producing energy using our own resources. The energy sector offers encouraging economic prospects and increasing job opportunities as more industries, businesses and homes look to renewable energy solutions and installations.
Harnessing sun power
From as simple as heating up water in a home to solar transportation and even powering up an entire city, solar power is a ray of hope. Rooftop photovoltaic (PV) solar panels are used to transform sunlight into electricity to power some of our homes and industries, while solar farms using mirrors create larger supplies. Solar energy systems do not produce greenhouse gases nor other air pollutants, and as such are considered clean energy sources.
Asean is predicted to become the world’s fourth largest energy consumer by 2030. In South-East Asia where there is sunlight almost all-year round, it makes sense to harness solar power to generate electricity. Annual solar radiation levels for the region ranges from 1,460 to 1,900kWh/m2 with three to six hours of sun daily.
Given the decreasing costs of solar equipment and installation for rooftop solar panels, and favourable conditions in terms of incentives and regulations by governments in the region, there has been tremendous growth in renewable energy capacity.
“Solar power is an affordable, accessible and reliable source of renewable energy in South-East Asia,” says UOB Malaysia deputy chief executive officer Ng Wei Wei.
“The entry cost of procuring and installing solar panels has seen significant reduction of almost 70% from 2010 to 2020. We believe that the future is bright for solar power as investing in clean and renewable energy is one of the many ways we can significantly reduce our carbon footprint.”
Businesses can look forward to cutting up to 25% of their electricity bill and reducing carbon footprint, while being recognised as green entities with the enhanced reputation of employing green solutions. Households reliant on electronic devices and appliances with higher electricity consumption can see electricity bill savings between 30% and 50% and reduced carbon emissions in switching to a more sustainable source of energy.
Global renewable energy capacity of 2,351GW (+7.9% year-on-year) accounted for nearly one-third of total energy generation capacity as at end-2018. Solar power, together wind energy, accounted for 84% of all new renewable energy capacity installed in 2018, and reduced the overall share of hydro energy to below 50%.
Growth in solar energy capacity can be mainly attributed to grid parity through lower levelised cost of energy, lower battery storage costs, smart grid and enhanced sustainability and green financing.
Green future ahead
Malaysia is targeting a 31% energy mix by 2025 and 40% in 2035 under its power generation plan. In addition, the Net Energy Metering (NEM) programme introduced in 2016 enabled consumers, especially businesses, to install solar systems on the roofs of their premises. They can, in turn, sell excess power generated back to the grid to offset their electricity bills. With a total quota allocation of up to 500 megawatts rolled out for NEM 3.0 in April 2021, this may further boost demand for rooftop solar for companies looking to save utility costs.
Advancing sustainability was identified as one of the key drivers under the 12th Malaysia Plan and was marked as a low-carbon, clean, inclusive and resilient development plan. It sets to reduce up to 45% greenhouse gas emissions intensity to gross domestic product by 2030 (based on emissions intensity in 2005) as part of efforts to attain a low-carbon nation status by 2050 and transitioning to become a circular economy.
Financial intermediaries have a role to play and help bridge the transition for the betterment of the planet and its people. By ensuring that finance is tied to sustainable outcomes like renewable energy adoption, banks can help businesses keep their overhead expenses low while growing responsibly in the long term.
“Mother Earth is our home. The notion that sustainability and profitability do not go hand in hand has been proven otherwise in recent times. It is possible for businesses to do good to the planet while creating value for themselves,” Ng said.
Seeing how the progression in the solar power industry and advancement in solar technology is pointing towards solar energy being a viable alternate energy option, renewable energy is expected to be the way forward towards a greener future.
