Under the Feed-in Tariff scheme, anybody can be a solar power producer.
THE current dry spell may be driving many crazy, but Michael Chou is unperturbed. He welcomes it, in fact, for the solar cells atop his house in Shah Alam, Selangor, are chalking up plenty of kilowatts under the sunny, cloudless sky.
“The solar power generation is at an all-time high, over 40kWh a day. These are the biggest numbers I have seen since I installed the system almost four months ago,” said Chou.
He is among the 1,900 people generating solar energy in their homes. After years of slow progress, growth of the solar energy sector is finally seeing a healthy spurt; more roofs are sporting solar cells while sprawling solar farms are taking over idle spaces like closed landfills as well as the roofs of malls and car parks.
It is all due to the Government’s Feed-in Tariff (FiT) scheme to promote generation of green energy, under which companies and house-owners can produce renewable energy for the national grid from four sources (solar, biogas, biomass and hydro) and get paid favourable rates for it. When the quota of 1.5MW for non-commercial solar PV projects (residences and buildings) was released last September for applicants, it was snapped up within an hour.
Growing demand has seen the cost of solar panels dropping and becoming more affordable. The smallest system of 4kWp now costs around RM40,000 compared with RM50,000 to RM60,000 two years ago. So, installing solar cells to produce energy in your home is now a reality, as in Chou’s case. He is still awaiting payment for the sale of energy from the 12kWp system installed in his home in October, but estimates that he has earned some RM5,000 so far.
“Installing the PV system is not just for investment. Equally important is that I’m producing green energy. I would prefer to use the solar energy myself as it will reduce my carbon footprint, but under the present FiT system, it has to go to the grid,” says the simulator flight instructor.
Another solar energy producer is Datuk Dr Abu Bakar Jaafar, who has a 4.75kWp system in his home in Bukit Jelutong, Shah Alam. He had installed the system in 2009 under the Suria 1000 project, whereby the Government subsidised the PV system. The former Department of Environment director-general had paid half of the total cost of RM120,000.
His earnings from the solar power vary between months depending on the weather and cloud cover; it ranges from RM620 (the rainy season in December and January) to RM720 (in the warm months of February and March). Most months, he generates more than what he uses. He estimates earnings of about RM20,000 to date.
“I’m about one-third of the way to getting a return on my investment.”
He does not use the green energy himself as it is fed into the grid. This is a better system, he reckons, for if he were to be totally independent of the grid, the cost will be higher due to the battery for energy storage and other supporting systems.
Dr Abu Bakar believes small power producers like himself should be encouraged.
“We’re generating surplus power that’s taken up by others who need it. So we won’t need big power generators. If the Government is serious about renewable energy, we should expand this programme. If home-owners don’t want to pay for the PV system, we can have an organisation which installs the systems on their roofs, sort of like renting their roofs for solar power generation.”
Aside from residential roofs, large PV installations are also boosting the local power supply with solar energy. Driving towards KL International Airport (KLIA) in Sepang, Selangor, one will pass by rows of glinting solar panels amidst oil palms. And when your aircraft lands, look out the window and you might catch a glimpse of solar panels on the roof of the airport satellite building and a nearby car park. All three projects, by Sunedison, are the latest commercial solar energy schemes here.
The 5MW solar farm sits on oil palm land leased from Malaysia Airports Holdings Bhd (MAHB).
“It is a good site as solar farms should be away from tall buildings to avoid shading,” says Sunedison business development director Naresh Kumar Govindan. What makes this project unique, he adds, is the tracker system which enables the panels to follow the sun’s path in order to tap maximum sunlight. So the 17,000 solar panels in the farm will face either East or West, depending on the time of the day, and will sit horizontally when the sun is directly overhead.
Naresh says the 4MW system on the KLIA roof is one of the largest such facilities in the world and will be a case study for other airports. Likewise, the 10MW installation on the parking canopy is among the world’s biggest “solar car parks” and will supply power to KLIA2, the new low-cost carrier terminal.
“Rooftops, parking lots and buffer areas at airports are traditionally not multi-purpose facilities, but we’ve turned them into a clean energy generation facility,” says MAHB managing director Tan Sri Bashir Ahmad during the launch of the solar farms last month.
For the Malaysian Photovoltaic Industry Association, generating solar energy is a no-brainer.
“Solar will buffer against the impact of future fluctuations in fossil fuel prices. It improves energy security as it reduces dependence on gas and coal. Solar power will be produced during peak demand hours, thus benefiting TNB, which need not run expensive gas-fired power plants to meet the daily maximum demand. It will also save on foreign exchange on imported gas,” says president Ahmad Shadzli Abdul Wahab.
To further boost the solar energy sector, the association has two suggestions: implement “net metering” and establish utility-scale solar farms outside of the FiT programme. In the net metering approach, the solar energy generator uses the power first and feeds the unused power to the grid. This differs from the present FiT scheme where all generated power goes to the grid.
Ahmad Shazli says with electricity prices foreseen to hike in the future (the Government is gradually withdrawing gas subsidy until 2015), commercial and industrial premises will want to install PV systems to produce energy for their own use. The sector now consumes 70% of our electricity supply (40,000GWh by commercial premises and 30,000GWh by industrial premises in 2010).
The industry group also suggests the installation of large-scale solar utilities of over 30MW as only such sizeable facilities can divert the current dependence on fossil fuel power plants. Currently, the largest solar farm in the country is of 10MW capacity; Thailand, on the other hand, already has a 84MW solar farm.
The association urges for fiscal incentives to make PV systems cheaper, such as expanding the current exemption on import duty and sales tax for solar modules and inverters (which convert the direct current output of a solar panel into alternating current) to all PV system equipment and components.
“This will encourage more people and businesses to invest in PV systems. With these incentives, the industrial and commercial sector will be able to get a return on their investment in under 10 years,” says association vice-president Chin Soo Mau. “The tax exemptions will also make installation of PV systems more attractive for holiday chalets and small-scale food processing industries in remote areas, many of which now rely on diesel generators.”
Chin says current tax incentives assist companies, not house-owners. For instance, the waiver on sales tax for solar cells and inverters benefits only operators of big solar installations. It will be tedious for home-owners to fill numerous forms to obtain the waiver. There is also financial support for companies under the Green Technology Financing Scheme whereby the Government subsidises 2% of the interest on loans taken to finance green projects.
Keen to see more houses with PV systems, the association disagrees with Sustainable Energy Development Authority’s (SEDA, the statutory body that administers the FiT scheme) current approach of emphasising commercial projects.
“In Germany, 80% of the quota goes to residential but in Malaysia, it goes to commercial set-ups. With a higher quota for residential, more people will get the opportunity to produce solar power. Since the money is from the people (collected from home-owners for the Renewable Energy Fund to pay for the green power), they should be given the chance to install solar panels. More households will benefit instead of just one company.”