Installing a home solar system gives you, as the homeowner, a chance to generate electricity, which you can then sell to Tenaga Nasional Berhad. However, if you’re new to Renewable Energy, Solar PV and its various forms can really be confusing. The following are answers to some of the most frequently asked questions we usually see asked about Grid-Connected Feed in Tariff, particularly for homeowners:
1.) Why should I, as the homeowner, go solar?
There are various benefits of going solar in Malaysia. With Malaysia’s sophisticated Feed in Tariff scheme, homeowners like you can take advantage of the long term financial payback it provides, while helping to produce clean energy that’ll be feed into the grid. Also, having the opportunity to produce your own electricity provides you provides you protection from rising energy prices.
2.) What is grid-connected feed in tariff?
Grid-connected RE system is usually located in urban areas, supplying solar electricity directly to the household through an inverter. If the technology has already provided enough energy more than the house needs, the electricity will go directly to the electricity grid. When that happens, the home owner will receive a payment equivalent to the amount of generated electricity. This is what Feed in Tariff is all about.
3.) Are rates guaranteed?
Yes. You’re guaranteed a premium FiT Rate for every kilowatt-hour that your system generates for the next 21 years.
4.) How does the Malaysia Feed in Tariff fund the premium Tenaga Nasional Berhad is paying?
The Feed in Tariff is not actually funded neither by the government nor Tenaga Nasional Berhad. Instead, all the funds are coming from RE Fund under Sustainable Energy Development Authority (SEDA) Malaysia, which was mandated under the Renewable Energy Act 2011.
5.) Is there any solar panel grant from the Malaysian government towards installation costs for home?
Grants toward cost of installation of home Solar PV technology are available in some countries. Unfortunately, though, these grants are not available at this time for homeowners in Malaysia. But the good thing about installing Solar PV is that most banks are willing to provide loans to purchase the system at a very low interest rate since feed in tariff guarantees long term profit.
6.) Will I get incentives for installing these technologies, such as solar PV?
Yes. To encourage more individuals to generate renewable energy, the Malaysian government has offered very attractive incentives which lie in the FiT rate. Malaysian government has also been providing fiscal incentives in yearly budget in support to renewable energy.
7.) How can I apply for Feed in Tariff?
Application for feed in tariff can be done either manually or online. For manual submissions, application forms are available at SEDA Malaysia’s office, while application for online submission can be done on SEDA Malaysia’s official website.
8.) How do I go about applying for feed in approval to become an authorized seller of renewable energy at a FiT rate?
Becoming a feed in approval holder is easy. You can either apply to it yourself or seed a service provider to do it for you.
9.) How can SEDA Malaysia facilitate my feed in tariff commencement date when it all depends on the distribution licensee’s availability?
Distribution licensee is obliged to interconnect and purchase renewable energy, which is agreed upon the Renewable Energy Act 2011; and failure to do so would involve penalty that’ll be imposed on distribution licensee. As to the commencement date, there’s a set target date or a specific time frame for the feed in tariff commencement date.
10.) Is Tenaga Nasional Berhad supportive of the Feed in Tariff system?
Yes. Tenaga Nasional Berhad supports the government’s initiative to promote low-carbon energy sources. Under the Renewable Energy Act 2011, it’s mandatory for the distribution licensees (such as Tenaga Nasional Berhad) to not just purchase renewable energy, but to prioritize such purchases over generated electricity using non-renewable energy sources as well.
11.) What if Tenaga Nasional Berhad, for instance, or other distribution licensees refused to purchase my generated renewable energy?
It’s mandatory for Tenaga Nasional Berhad and other distribution licensees to purchase generated renewable energy from its producers. They are also required to prioritize generated energy using renewable energy sources over generated energy using non-renewable energy sources. There’ll be penalties that’ll be imposed should the distribution licensee fails to comply to this law.
12.) Is feed in tariff income a taxable income?
Yes, feed in tariff income is also subject to tax and any exemption will require a policy decision from the government.
13.) Will the FiT rate that was given to me under my RE power purchase agreement and FiA be reduced in later years?
No. For the next 21 years, you will have a fixed FiT rate until grid parity occurs. This is to guarantee security of your investments. The only goal of the degression is to encourage cost reduction while increasing efficiency to achieve grid parity at a faster rate.
14.) What will happen when my RE power purchase agreement under the FiT system has already expired?
Once the effectivity period of your RE power purchase agreement or FiA has already expired, you, as the Feed in Tariff Approval Holder may still re-apply for new FiA or feed in approval. However, Feed in Tariff Approval Holders (such as you) will have to directly negotiate with distribution licensees if grid parity has already been achieved.
15.) What if I decided to sell my home or to move to other place? Should my RE power purchase agreement and FiA be transferred to the new owner?
Yes, your RE power purchase agreement and FiA gets transferred to the new owner of the house with consent from SEDA Malaysia.
16.) Does internal utilisation of renewable energy is allowed?
Yes. However, SEDA Malaysia allows this for RE installations connected at low voltage only, which is known as indirect connection. This means that utilisation of renewable energy is only allowed at 230V; 10kW and 400V, > 10kW; 425kW, and detailed condition will be available before the FiT system is launched.
17.) Is it possible for retail electricity tariff to go beyond the FiT rates on the contract before expiration of REPPA?
Yes. In an event that’s described as the attainment of grid parity in the RE Act 2011, FiA Holders (you) will be paid the displaced cost.
Are you a company planning to invest in Solar PV, but a little confused on how it really works? Get answers to some of the most FAQ among Companies and get started.