On track to meet renewable energy target

  • Letters
  • Friday, 28 Jun 2019

REFERRING to the report “Jomo: Lack of political commitment for RE (renewable energy) agenda in Malaysia” (TheStarOnline, June 25; https://bit.ly/2YoHHYx), there is actually no issue of political will by the Pakatan Harapan government in setting the right tone via policies to promote the uptake of renewable energy.

The government is committed to fulfilling its promise in the Pakatan manifesto to increase the installed capacity of renewable energy (excluding large hydro schemes) from 2% in 2018 to 20% by the year 2025. It must be noted that this target is significantly

higher than the one set by the previous administration (13% by 2030).

In October 2018, Energy, Science, Technology, Envi­ronment and Climate Change Minister Yeo Bee Yin announced the new Net Energy Metering

policy, where excess electricity generated by rooftop solar installations injected back to the grid would offset the intake from Tenaga Nasional Berhad (TNB)

on a one-to-one basis, making the proposition of installing rooftop solar far more financially attractive. This is arguably the most progressive solar policy in South-East Asia.

Liberalising the electricity supply industry was the right decision for solar energy companies to not only supply and install solar panels but also to just sell solar energy directly to the consumer. This enables commercial and industrial premises to avoid the heavy capex of buying the solar system and instead enjoy green renewable energy with zero upfront cost.

To date, 35 companies have

been registered to provide these services, including TNB’s own subsidiary. With this ground-breaking policy, customers are no longer bound to TNB as their only supplier of electricity but have 34 other options.

These policies have not only been attractive to the private sector but also to local governments in Johor, Penang and Selangor that have actively pursued solar installations.

In terms of making renewable energy financing more attractive, the government has also expanded the list of assets available for the green investment tax allowance from nine to 40 items, and many of these are renewable energy items for the biogas, biomass and small hydro installations.

The government has also introduced the Green Technology Financing Scheme (GTFS) 2.0 where qualified applicants are given a 2% interest rate subsidy for seven years and 60% loan guarantee, making renewable energy projects more bankable and attractive to banks.

In addition to opening the spaces for private/individual investment in solar, the Energy Commission has also expanded the large scale solar scheme by another 500MW, and as a testament to the openness of this tender process, over 700 companies have purchased the tender documents and are in the midst of preparing their submissions.


Board Member

Sustainable Energy Development Authority

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