Making cents while the sun shines with solar power

Solar panels being installed on a residence. More and more Malaysians are investing in this clean and abundant energy, especially as government incentives allow residences to sell extra electricity back to the national grid. — Filepic/The Star In pic: Students of the Solar Academy Miri Adek, 22 (right) and Ayu Majid, 21, checking the solar panels installed on the rooftop of the Sols 24/7 premises located in Segambut, KL.

For a few years now I have had a decision to make that I’ve been postponing. Should I install solar panels on the house and get free electricity? Or should I just keep things the way they are?

I mean, “free” isn’t quite the right way to say it because it costs money to install the panels. But once they are in place, there is a scheme in Malaysia that allows you to “sell” electricity back to the national grid, offsetting your monthly electricity bill.

Depending on what exactly you buy, it looks like it might take anywhere between seven and 12 years to make your money back, and the lifetime of the system is meant to be 25 years. It’s roughly the same returns as keeping your money in a fixed deposit account for that long.

Paying for 10 year’s worth of electricity in advance might not really sound that attractive from an investment point of view – but then again, you would also be saving the planet.

Of course, all this is prompted by the release earlier this month of the third and final instalment of the Sixth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC).

You will not be surprised that the bad news is still bad. “Average annual GHG [greenhouse gas] emissions during 2010-2019 were higher than in any previous decade,” reads the report. Despite some attempts, with the current rate of effort, the report says that it is “likely” that the average global temperature will rise by more than that critical 1.5°C by the end of this century (report available here).

What is the dollar cost of this? Swiss Re, one of the world’s largest insurance providers, estimates that by 2050, climate change will reduce global economic output by 11% to 14%, resulting in up to US$23tril (RM97.3tril) in reduced global economic output worldwide per year.

From a local perspective, things are even worse. The same report by Swiss Re ranked Malaysia at the bottom of a list of 48 countries for negative impact on GDP due to climate change. The largest factors affecting this are losses from crop yield and productivity, heat stress (measured in labour productivity losses) and reduced tourism.

Unsurprisingly, Singapore will also suffer a negative GDP impact (ranked 47), but its future outlook is much more positive. Why? Because the report gives a good rating to its Adaptive Capacity (the ability to cope with climate impact). Singapore's is ranked fifth, whereas Malaysia’s is all the way down at 33rd.

The truth is that there is much we can do to tackle climate change head on. The good news for energy generation is that the cost of green technologies in this area has gone down greatly in the last 10 years: Solar energy has reduced by 85% per unit, wind by 55%, and lithium-ion batteries (to store all this energy) by 85%.

Though land is a relatively scarce resource in Singapore, the country is ready to invest in solar energy by using land from overseas. A few weeks ago Indonesia and Singapore were reported to be working on a new regulatory framework to govern exports of solar power from the former.

More ambitiously, a company in Australia has recently announced it is on track to develop a US$22.6bil (RM95.7bil) solar power project to send electricity from Australia’s Northern Territory to Singapore via a 4,200km cable. The project is due to start in 2026 and is expected to meet 15% of Singapore’s demand.

In contrast, Malaysia used coal for up to 59% of the country’s power generation in the first half of 2021. This is the one power source the IPCC has unequivocally recommended to drastically cut, by 76% by 2030. It also advises that the majority of oil and gas reserves become “unextractable”, and no more new fields be searched for, something Malaysia as an oil and gas exporting country should take heed of.

However, energy makes up only 34% of GHG emissions. There are other sectors to consider. For example, transport contributes 15% of global GHG emissions, and 6% comes from buildings. It’s obvious that urban areas are where most of these two sources are concentrated, and true enough, cities are responsible for more than two-thirds of GHG emissions.

So it’s heartening to see some effort being made locally with the publication of the Kuala Lumpur Climate Action Plan 2050 late last year, which aims for the city to be carbon-neutral by 2050. It’s still quite a high-level plan that emphasises the need to coordinate with federal agencies a lot rather than providing a clear track of solutions, though.

It does, however, try to capture the current state of affairs, and confirms that 56% of GHG emissions in the city is due to transportation (almost entirely on-road transportation), and 41% is from commercial and institutional buildings.

So can we as individuals make a difference? In theory, yes. The IPCC report says that there is potentially 40% to 70% of emissions reductions possible through individual choices and actions.

But how realistic is that? How likely are you, as an individual, to choose to walk or cycle instead of driving a car? To eat more sustainable diets and avoid wasting food? To put solar panels on your roof?

For me, this is the crux of the matter. You can make a superbly energy-efficient bus, but walking will still be better for the environment. As I’ve written before ("Pedestrian problems"), building a pedestrian-friendly city means making sure places with services you want must be near enough, accessible enough and interesting enough to walk to. That requires appropriate interventions from the authorities. (While the KL blueprint talks about improving public transport to its credit, there is very little about walkability.)

As I mentioned, the KL blueprint emphasises the importance of working with federal agencies. For example, it says that if KL City Hall works on its own, it can reduce emissions by 58% by 2050; however, if it can cooperate at the federal level, this number rises to 93%.

Given this recognition that we’re all in it together, surely the same applies to helping individuals trying to make green decisions. For example, the Petaling Jaya City Council offers an assessment tax rebate of up to RM500 for their Eco-Friendly House Owners Low-Carbon Green City programme. Which means the time for return of investment in a solar panel is reduced from maybe eight years to maybe seven years and six months.

It doesn’t seem like much – but every little bit helps, and if we are serious about making this work, for the end user it helps if it makes cents as well as sense.

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In his fortnightly column, Contradictheory, mathematician-turned-scriptwriter Dzof Azmi explores the theory that logic is the antithesis of emotion but people need both to make sense of life’s vagaries and contradictions. Write to Dzof at [e-mail]. The views expressed here are entirely the writer's own.