The soon-to-be implemented feed-in-tariff (FiT) mechanism under the Renewable Energy (RE) Act will enable individuals to earn income by selling electricity generated from renewable resources at home.
Under the RE Act, the public will be able to sell electricity generated from RE to utility companies such as Tenaga Nasional Bhd and Sarawak Energy Bhd at a fixed rate for a specific period.
RE/Malaysia Building Integrated Photovoltaic Technology Application (MBIPV) national project team leader and chief technical adviser Ahmad Hadri Haris said that under the RE Act, consumers can install their own renewable resources such as solar panel at home and would be a secondary income for consumers.
“Consumer producing 4KW of electricity at home will be earning more than RM400 a month. It will be a secondary income generator,” he told StarBiz at the sideline of Malakoff Corp Bhd’s 3rd Energy Expert Series yesterday.
Ahmad said consumers would also be able to offset potential tariff hikes by setting up RE such as solar panels at home.
“A normal house needs 4KW while the capital required is about RM60,000. However, with FiT, consumers need to pay only 10%, or RM6,000 while the rest will be borne as a loan from a bank.
“The monthly income generated from the 4KW will be RM696 and the monthly repayment is RM456 to the bank, thus earning consumers a net cash of RM240 per month,” Ahmad said.
MBIPV is a national project under the Energy, Green Technology and Water Ministry to promote the use of photovoltaic (PV) technology to tap solar energy and generate electricity for buildings.
Ahmad said the Government was currently in the process of preparing the Act for a first reading in parliament next month.
He said two Acts would need to be passed in parliament for the RE to take off in the country. The first RE Act would focus on RE while the second act was to empower the Sustainable Energy Development Authority (Seda) which will oversee the implementation of RE.
It is part of the Government’s plan to boost renewable energy contribution to Malaysia’s electricity-generation mix from less than 1% in 2009 to around 5.5% by 2015 and to 11% of all electricity generated nationwide in 2020.
Consumers may have to be prepared to pay a little bit more for their monthly electricity bills to support the higher charges being levied on RE next year. A 1% tariff hike to cover cost associated with the FiT scheme may come into force as early as January.
Ahmad said it would be a very minimal impact given that 1% of a RM100 electricity bill would cost RM1. He said some 56% of the nation would not be impacted as they consume less than 200kwh a month.
“Cost of FiT is about 1% incorporated into the electricity tariff for high consumption only (more than 200kwh a month).
“Also 1% is only 0.31 sen/kwh, so it is almost unnoticeable. In return, consumers can generate income from FiT,” Ahmad said.
“FiT is not a subsidy. It is a market support mechanism. It provides an opportunity for all to generate income from producing RE at home,” Ahmad said.
He said the Government would educate the public with an awareness campaign so that consumers can understand the FiT scheme.
The Government has set a target for 2,080 MW or 11% of all electricity generated nationwide in 2020 to be sourced from environment-friendly RE. Currently, less than 1% of the total electricity is generated from RE. In the short term, the Government has set a target of 5.5% of electricity to be generated by RE by 2015.
International FiT expert and independent energy policy consultant and researcher at the Environmental Policy Research Centre of Freie Universitat, Berlin, David Jacobs believes the short-term target of 5.5% is definitely achieveable. He said, however, Malaysia should have a more ambitious long-term target.
“With Malaysia targeting to achieve 25% of total usage of renewable energy by 2050, other countries would be in the 60%-70% range by then.”
Jacobs, who is attached to Universiti Tenaga Nasional’s Institute of Energy Policy and Research for six weeks under the Brain Gain Malaysia programme, said electricity tariffs for FiT should be increased by 2% to 5% instead of 1%. He said the Government’s plan to build a nuclear plant by 2020 under the Economic Transformation Programme (ETP) was not cost effective.
According to the ETP handbook, building the twin-unit nuclear plant would require an investment of RM21.3bil up to 2020.
Jacobs said past trends indicated that the total investment cost needed to build a nuclear plant would be twice the cost allocated initially. “The nuclear power plant in Finland was planned with an expected cost of 2.5 billion euros, but the final cost escalated to 5.0 billion euros,” he said.
“Authorities should conduct more economic viability analysis before starting the nuclear plant project. It would make more sense to extend the RE fund for development in that sector,” he said.
