Malaysian Government Reveals Feed-In Tariff

Posted on June 16, 2011 by

On April 5, Malaysia announced a Feed-in-tariff (FIT) for renewable energy. According to Energy, Green Technology and Water Minister Datuk Seri Petet Chin Fah Kui, the implementation of a FIT mechanism would enable users to sell excess power to the grid.

The FIT mechanism is a tried and tested mechanism in many countries including Thailand, Taiwan and more notably, Germany.

FIT will open the door for renewable energy generators to up their scale of production which, up till now, was not commercially viable as the extra energy generated would have gone to waste. On this note, Chin hopes that FIT will make it easier for consumers or companies to generate renewable energy and sell power back to national or regional utilities. Users can sell their renewable energy to Tanega Nasional Berhad or regional utilities such as the Sarawak Electricity Supple Corporation and Sabah Electricity Board.

Chin added that FIT incentivizes renewable energy generation by allowing sale to the grid and this will encourage more people to adopt renewable energy. Like Germany, Chin believes that a feed in tariff would increase solar panel installations in Malaysia.

According to Chin, the current cost of installing a 1 KW capacity solar panel is RM 25,000 and an average detached house uses 2 KW of energy.

“With FIT, it is a small step towards greening of this country. Based on the United Nations Framework Convention for Climate Change, we are not doing that good. Our carbon emission rate is among the highest in the world,” he said.

Earlier in his speech, Chin stated that the Malaysian government has planned several programmes towards greening the country. These include a RM 1.5 billion fund for financing developments in green technology. This fund is meant to attract the private sector, especially the SMEs, to participate in green technology entrepreneurship.

The FIT will be introduced through the Renewable Energy Act which is expected to be tabled in the Dewan Rakyat (parliament) by year-end.


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