KUALA LUMPUR: THE government should widen incentives for battery energy storage systems (BESS) in Budget 2027 to encourage greater renewable energy adoption among households and businesses, say industry players.
Vestech, a wholly-owned subsidiary of Solarvest Holdings Bhd
, said BESS could help homeowners maximise solar savings as Solar Atap (Accelerated Transition Action Programme) provides a narrower offset for exported solar energy than the previous Net Energy Metering (NEM) scheme, while higher Automatic Fuel Adjustment (AFA) charges continue to affect electricity costs, particularly for households consuming more power at night.
"Under the current Solar Atap scheme, exported solar energy is credited only against the energy charge portion of a household’s electricity bill.
"Time-of-Use tariffs, while a step in the right direction, only do little to cushion the impact of rising AFA costs.
"This is why residential battery storage is becoming increasingly relevant as it allows households to store their daytime solar generation for use at night.
"However, the price of battery systems remains a real barrier for many families,” it said.
Former Malaysian Photovoltaic Industry Association elected committee member Edmund Loo said Malaysia has made very encouraging progress through initiatives such as Solar Atap and SuRIA Home and the upcoming Budget 2027 presents an opportunity to accelerate solar and battery adoption, strengthen grid stability, improve energy affordability and enhance business competitiveness.
"The next step should be to build on this momentum by addressing the practical barriers faced by households and businesses.
"The government could consider introducing a time-limited rebate or tax relief for approved residential BESS installed with rooftop solar.
"Battery storage allows households to store surplus solar energy generated during the day for use in the evening.
"Besides improving solar, it can reduce peak demand and support the future development of demand-response and virtual power plant programmes," he said.
Loo suggested the domestic solar capacity limits under Solar Atap to be reviewed, which are capped at 5 kWac for single-phase consumers and 15 kWac for three-phase consumers.
He said increasing the limits to 8 kWac and 22 kWac respectively would better reflect rising household electricity consumption, particularly with the growing adoption of electric vehicles.
For the commercial and industrial market, he said the threshold for mandatory battery storage and standby charges under the Solar for Self-Consumption programme (Selco) should be reviewed so that more businesses can adopt renewable energy, reduce electricity costs and lower their carbon footprint.
"Budget 2027 should extend and broaden the Green Investment Tax Allowance incentives for qualifying solar and battery investments, which ends on Dec 31.
"An extension of at least three years would provide greater policy certainty and encourage businesses to proceed with longer-term investments.
"The government should also broaden eligibility to cover integrated solar and battery projects, solar and battery leasing, battery-as-a-service, virtual power plants and intelligent energy-management systems," he said.
Loo added that clear eligibility for both own-consumption investments and energy-service business models would stimulate private investment, encourage local innovation and create skilled employment.
With well-targeted incentives and proportionate technical requirements, Malaysia can progress beyond simply installing more solar panels towards building a smarter, more flexible and resilient energy ecosystem, he added.
Effective Jan 1 this year, the Energy Transition and Water Transformation Ministry launched the Solar Atap to maximise the use of rooftop space for renewable energy generation.
The initiative succeeded the NEM scheme, which ended on June 30 last year.
Under the SuRIA Home initiative, launched in May this year, domestic customers under the Solar Atap programme are eligible for a cash rebate of RM600 per kWac, up to a maximum of RM3,000.
Another industry player, Michael Leong, said stronger support for BESS would also help Malaysia work towards its National Energy Transition Roadmap (NETR) target of 70% renewable energy installed capacity by 2050.
"Initiatives such as SuRIA Home have played an important role in encouraging more homeowners to adopt solar by making clean energy solutions more accessible.
"We also hope to see additional incentives for residential BESS adoption.
"Making energy storage more accessible will allow them to achieve greater energy independence and strengthen long-term energy security,” he said.
“We hope Budget 2027 will continue to support renewable energy adoption across both the residential and business sectors.
"Consistent policies and incentives will give homeowners greater confidence to invest in solar for their homes while enabling businesses to accelerate investments in clean energy solutions that improve efficiency, resilience and long-term competitiveness," Leong added.
On Wednesday, Prime Minister Datuk Seri Anwar Ibrahim said a special meeting will be held to discuss and review immediate mitigation measures to reduce the impact of electricity bill increases on affected households following the haze and hot weather. He said this caused the monthly usage to exceed 600kWh threshold.
