Home Solar in Malaysia

Read these first:-

(The entire set is expected to cost house owners RM60,000 – it is not cheap but the return of investment does look favorable. If there is special funds for house owners to part finance the set-up cost and then tie the repayment to the monthly FiT, that will promote a greater use of solar panels at residential areas. Image source: http://www.eurocosm.com/)

Seriously, I kind of excited with this:-

BY the end of the year, Malaysians with landed homes can start to generate electricity using their rooftops – and get paid for it by national utility company Tenaga Nasional Bhd (TNB). This is made possible under the latest push to uphold renewable energy as the “fifth national fuel”.

This push, possibly creating thousands of “independent power producers” along the way, is a likely outcome with the implementation of the feed-in tariff (FiT) system aimed at stimulating the development of renewable energy (RE). FiT works by paying a premium (above what fossil fuel power plants get) for electricity generated from non-fossil fuel sources such as geothermal, mini-hydro schemes and biomass, to name a few.

Despite the seemingly wide choices of renewable energy, solar photovoltaic (PV) appears to be the only feasible option for the average Joe as other alternatives demand high start-up costs and have logistical constraints (like location, in the case of mini hydro projects). With its location near the Equator, Malaysia gets around five to six hours of optimal light each day for PV electricity generation, regardless of whether the PV modules are mounted on rooftops or the ground.

FiT will enable homeowners to receive up to RM1.78 for each kWh they sell to TNB. Homes with installed capacity of up to 4 kWp will be paid RM1.23 per kWh, while those generating above 4kWp (capped at 24 kWp) will be paid RM1.20.

“However, with the bonus criteria such as installation of solar PV in buildings or building structures (rather than stand-alone ground-mounted ones), they will be paid an additional 26 sen on top of the base payment,’’

Regardless of ownership, Malaysia’s FiT framework will guarantee all solar power producers an income for up to 21 years. “Under FiT, consumers producing 4kWp of electricity at home can earn more than RM700 (gross) a month, and it can function as a secondary income generator,”


I am excited with this primarily because it now means individual home users (who all this while been powerless against electricity tariff hike) would be able to generate their own power by selling it back to TNB. The net between the two could mean a substantial saving for house owners.

Having said that, the issue on everyone’s mind who intends to put up solar panels up their roof would certainly be the cost:-

The most obvious reason for the slow uptake of solar PV is cost. Generally, PV electricity costs three to five times more compared to electricity from conventional sources. A houseowner who wants to install a rooftop system with a capacity of 4kWp (kilowatt peak) can expect to fork out no less than RM60,000, based on current prices for PV modules and related accessories. A single kilowatt of installed capacity is around RM15,000, which is a lot cheaper than the figure of RM31,410 per kW in 2005.

The other side of the “expensive PV cost” coin is that consumers are not paying the real cost of electricity, given that tariffs are massively subsidised, both directly and indirectly (through cheap natural gas from Petronas).

The starting cost of RM60,000 is not cheap – and if one offsets the electricity bill that they usually pay to TNB and computes the return of the surplus power to TNB, the ROI will not be that great in the short run. However in the long run, it is expected a ROI of at least 9.7% based on the following case study:-

A double storey terrace house owner installed a 3kWp Roof Integrated PV System at a cost of RM54,000 in 2011. Assume system yield of 1,200kWh/kWp/year in Kuala Lumpur – total system yield = 3,600kWh/annum

The system is qualified for:-

  • Installed capacity up to and including 4 kWp (FiT rate of RM1.23)
  • Additional for installation in buildings or building structures (FiT rate of RM0.26)
  • Additional for use as building material (FiT rate of RM0.25)

He’s selling RM1.23+0.26+0.25= RM 1.74/kWh which translate to an revenue of RM6,264.00/year. The simple payback of the system is 8.6 years for the system. The Internal Rate of Return (IRR) for the investment is approximately 9.7%.


Additional power from a cleaner source would also means there is less impact on the environment which the same cannot be said on another so-called “cleaner” power source called nuclear power.

According to Kettha, on a cumulative basis, FiT can help Malaysia slash some 46 million tonnes of CO2 from the power generation sector by 2020 if the country manages to generate at least 3,000MW from RE sources by then. If Malaysia can bump up its RE capacity to 7,000MW (a target for 2030), it could theoretically save 166 million tonnes of CO2 from being produced.

Certainly we should have introduced this a long time ago.

Read the FAQs here and here