Malaysia may introduce FITs early

Malaysia is currently in the process of introducing a Renewable Energy Bill (REB). The first reading of the bill before the House of Representatives (Dewan Rakyat), took place in December by the Minister of Energy, Green Technology and Water Malaysia, Peter Chin. The second and third, readings are scheduled to be delivered sometime between March and April this year.

This means the bill could be approved before the original June deadline. Once the REB is passed into law, the new FITs will be implemented.

The country has also made several changes to its PV targets. National project leader and chief technical advisor to the Ministry of Energy, Green Technology and Water, Ahmad Hadri Haris updated pv magazine.

Haris says the cumulative renewable energy capacity target has been revised, but is awaiting approval. By 2050, it is hoped PV will constitute 87.5 percent of the total renewable energy mix and renewable energy will, in turn, constitute 73 percent of the country’s total energy mix for power generation. Click here to see a more detailed table, provided by Haris, which highlights the PV installation targets every year.

He adds that jobs created through the construction, operation and maintenance of renewable energy power plants – on the basis of 15 to 30 jobs per megawatt – are predicted to increase by an extra 2,000, thus creating a total of 52,000 jobs for the sector. The external costs savings predictions for mitigating carbon dioxide emissions remain approximately the same at USD$660 million.

The government is also reportedly ensuring that local banks will be provided with new sources of revenues, at 80 percent debt financing for renewable energy projects. There is said to be a minimum of USD$6 billion of loan values for these types of projects guaranteed.

As previously stated, Malaysia will impose a potential tariff rate of Ringgit Malaysia (RM) 1.25 (around 0.40 U.S. cents; €0.31) to 1.75 (around 0.57 U.S. cents; €0.43) per kilowatt-hour, over a period of 21 years. Building integrated photovoltaics (BIPV) will receive RM1.75; PV rooftop installations RM1.50 (around 0.49 U.S. cents; €0.37), and ground-mounted solar power installations RM1.25.

According to the Pusat Tenega Malaysia (Malaysia Green Technology Corporation), the simple payback period is calculated as 11.2, 10.1 and 8.6 years respectively for installations.

The FIT scheme will not be financed by the government, but rather consumers will contribute a small percentage of their total electricity bills, amounting to less than RM0.04 and totaling to one to two percent of annual utility sales revenue. Apparently the Ministry of Energy, Green Technology and Water has said those consumers who consume 200 units or less of electricity will be exempt from this contribution.