A growing solar industry

THE Government has introduced various incentives and strategies to encourage the growth of the renewable energy sector in Malaysia.

And given Malaysia’s location in the equatorial region, where sunshine is in abundance all year round, solar energy is naturally positioned to play a crucial role in the future energy mix of the country.

Demand for solar energy is expected to rise as consumers and businesses become increasingly aware of its benefits not just to the environment but also to the economy.

According to the Sustainable Energy Development Authority of Malaysia (SEDA), as of July 2016, 9,406 applications out of 9,586 approved applications under its Feed-in-Tariff programme were for solar PV alone. About 95% of the applications were for small installations of less than 72kWp.

This also shows that there is growing acceptance for solar energy from the general public.

The Net Energy Metering mechanism and various large-scale solar programmes that have been announced will likely boost the number of solar power plants and demand in the coming years.

SEDA notes that the market for solar energy has shown the most growth compared to other renewable energy technologies.

Earlier this year, Malaysian Investment Development Authority (Mida) chief executive officer Datuk Azman Mahmud said the Malaysian Solar PV Roadmap 2030 would be launched at the end of the year to drive the country’s solar PV industry forward.

According to Azman, Malaysia, under the National Renewable Energy Policy and Action Plan, aims to achieve 2,080MW of renewable energy by 2020.

“The Government, through the Economic Transformation Programme, aims to achieve 1,250MW solar power capacity to be connected to the grid by 2020,” he had said.

Azman also noted that the country is well positioned to benefit from the spillover effects of growing solar power usage worldwide.

Between 2014 and 2018, Asia would see the installation of another 37 GW in PV capacity.

Both developed and developing nations are increasingly looking at moving away from nuclear power and fossil fuels and toward solar, wind and other renewables. This gives producing countries such as Malaysia an opportunity to grow in the market.

“The country has the necessary solar ecosystem to obtain a market share of the growing solar power business in the region.

“Ranked as the world’s third largest producer of PV cells and modules, Malaysia has an ecosystem comprising 250 companies involved in upstream activities such as poly silicon, wafer, cell and module production and downstream activities such as inverters and system integrators,” Azman said.

According to a Mida survey in 2016, export and local sourcing activities undertaken by the top solar companies in the country was valued at RM11.1bil and RM1.42bil respectively.

“We export over 80% of PV products to Europe, the US and Asia,” he added.

A market report by IHS Technology projects solar PV growth to reach only 3% globally this year, a sharp decline from 2016’s growth of 34%, due to declines in installations from the US and China, the world’s top solar markets.

The report notes that 2017 and 2018 will see single-digit advancement in demand but expects strong growth to return in 2019 once demand catches up with the sudden jump in supply in the last two years.