Energy Policy 39 (2011) 7975–7987

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Energy Policy

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An evaluation of the installation of solar photovoltaic in residential houses inMalaysia: Past, present, and future

Firdaus Muhammad-Sukki a,b,n, Roberto Ramirez-Iniguez a, Siti Hawa Abu-Bakar a,c, Scott G. McMeekin a,Brian G. Stewart a

a School of Engineering and Built Environment, Glasgow Caledonian University, Cowcaddens Road, G4 0BA Glasgow, Scotland, United Kingdomb Faculty of Engineering, Multimedia University, Persiaran Multimedia, 63100 Cyberjaya, Selangor, Malaysiac Public Mutual Berhad, 1 & 3, Jalan PJU 8/5i, Perdana Business Center, Bandar Damansara Perdana, 47820 Petaling Jaya, Selangor, Malaysia

a r t i c l e i n f o

Article history:

Received 7 February 2011

Accepted 24 September 2011Available online 20 October 2011

Keywords:

Solar energy

Solar photovoltaic

Feed-in tariff

15/$ - see front matter & 2011 Elsevier Ltd. A

016/j.enpol.2011.09.052

esponding author. Tel.: þ44(0)141 331 8938

ail addresses: firdaus.muhammadsukki@gcu.a

sukki@mmu.edu.my (F. Muhammad-Sukki).

a b s t r a c t

This paper examines solar energy development in Malaysia, particularly in relation to the installation of

solar Photovoltaic (PV) in residential houses. It analyzes the past activities related to solar energy in

Malaysia, in terms of research and developments (R&Ds), the implementations used as well as the

national policies for the past 20 years which have pushed the installation of PV in the country. The

Feed-In Tariff (FiT) scheme is discussed, showing comparative cost-benefit analysis between the PV

installation in houses in the United Kingdom (UK) and Malaysia, and with other investment schemes

available in Malaysia. To investigate the awareness of renewable energy policies and incentives, a

preliminary survey of the public opinion in Malaysia has been carried out, and an evaluation of public

willingness to invest in the FiT scheme by installing the PV on their houses is presented. The cost-

benefit analysis shows that the proposed FiT programme is capable of generating good return on

investment as compared to the one in the UK, but the return is lower than other investment tools. The

survey suggests that most Malaysians are unaware of the government’s incentives and policies towards

renewable energies, and are not willing to invest in the FiT scheme.

& 2011 Elsevier Ltd. All rights reserved.

1. Introduction

On 20 April 2010, the world experienced a huge oil leak as aresult of a subsea explosion in the Gulf of Mexico. This leak hashad a massive impact on both the environment and the economyof the local vicinity. It is reported that this event has triggeredpeople to focus even more on renewable energy options, whichhave less environmental effect to the world (Choi, 2010).

Solar energy is one of the alternative energies that showsignificant potential in fulfilling the growing energy demand inthe world. Since the first solar houses developed by the ancientEgyptians during the seventh century BC (Petrova-Koch, 2009),there have been numerous other experiments and researchprojects conducted worldwide to harness solar energy. Solarthermal system utilizes the heat energy from the sun; anddepending on the collector’s temperature, produces hot water,space heating and even electricity in Concentrated Solar Power(CSP) plants (EIA, 2010; Ekins-Daukes, 2009; Welford andWinston, 1989). As for solar electricity generating system, it can

ll rights reserved.

; fax:þ44(0)141 331 3690.

c.uk,

either be produced from the CSP or by the photovoltaic effect(Ekins-Daukes, 2009; Petrova-Koch, 2009).

Malaysia is situated in the South East of Asia and comprisestwo regions: West and East Malaysia, which are separated by theSouth China Sea. It consists of 13 states and three federalterritories, and has a total area of 329, 847 km2 (CentralIntelligence Agency, 2011). This tropical country is located atthe equator. With a strategic geographical location, Malaysiabenefits from a huge amount of solar insolation, ranging from1400 to 1900 kWh/m2 (Ahmad et al., 2011), averaging about1643 kWh/m2 per year (Haris, 2008) with more than 10 sunhours per day (Amin et al., 2009). It was calculated theoreticallythat a 1 kWp of solar panels installed in an area of 431 km2 inMalaysia could generate enough electricity to satisfy the electri-city requirement of the country in 2005 (Haris, 2008). Given itspotential, it is almost impossible not to tap into this resource forMalaysia’s benefits. Fig. 1 shows the yearly average solar insola-tion in Malaysia.

Section 2 presents an overview of the past and presentactivities related to solar PV installation in Malaysia coveringthe current electricity demand, research and developments,implementations and existing national policies. Section 3 dis-cusses the solar feed-in tariff programme in general and presentsa comparative financial analysis on installations in Malaysia andin the United Kingdom. Section 4 presents and discusses the

Fig. 1. The yearly average solar insolation in Malaysia (Haris, 2010b).

Table 1Source of electricity in Malaysia (Economic Planning Unit, 2006).

Year Oil (%) Coal (%) Gas (%) Hydro (%) Other (%) Total (GWh)

F. Muhammad-Sukki et al. / Energy Policy 39 (2011) 7975–79877976

result of a survey carried out on the Malaysian public in relationto awareness and attitudes to PV installations, and conclusionsare presented at the end of this paper.

2000 4.2 8.8 77.0 10.0 0.0 69,280

2005 2.2 21.8 70.2 5.5 0.3 94,299

2010 0.2 36.5 55.9 5.6 1.8 137,909

2. Reality check in Malaysia

2.1. Current electricity demand in Malaysia

Malaysia had a total population of more than 27 million in2010 (Department of Statistics Malaysia, 2010). To date, there areapproximately 6.5 million households in Malaysia with an aver-age household size of 4.31 people (Department of StatisticsMalaysia, 2010). At the moment, the residential dwellings totalabout 7.3 million (Department of Statistics Malaysia, 2010), and isprojected to increase by about 150,000 each year (REHDA, 2010).With such a big increase in the number of residential houses, plusthe growth in the commercial and industrial sectors, it is expectedthat the demand for electricity will also increase. In the first halfof 2010 alone, 21% of the electricity generated in Malaysia wasconsumed by the residential sector (Energy Commission, 2010)with an average annual consumption of 3300 kWh per household.A typical house uses more than 40% of the electricity on thefridge, air-conditioning, and water heating (Taha, 2003).

The electricity generation in Malaysia is largely produced fromfossil fuels, mainly from natural gas and coal, which constitutenearly 90% of the overall generation, as illustrated in Table 1(Economic Planning Unit, 2006). It can be seen that the electricitygenerated in 2010 has doubled from the amount in 2000. Inaddition, Table 1 clearly indicates that the electricity in Malaysiais fully dependant on fossil fuel sources. Although Malaysia isranked 16th in terms of the size of its natural gas reserves(Central Intelligence Agency, 2011), it is reported that the countrycould only sustain current natural gas production for about 29years (Ahmad et al., 2011). The supply for coal, on the other hand,is imported from outside of Malaysia, mainly from Indonesia(84%), Australia (11%), and South Africa (5%) (Jaffar, 2009). Thismeans that to sustain this increasing electricity demand, while

cutting the dependency on the fossil fuels, Malaysia needs to shiftits electricity generation to alternative energy resources.

2.2. Research and development

Malaysia has spent significant amounts of money on researchand development (R&D) activities related to harnessing solarenergy. There are three groups of R&D operations in Malaysia;(i) the government research institute (GRI), (ii) private R&Dcompanies (PRC), and (iii) universities (Asmawi and Mohan,2010). Research in solar energy started in the 6th Malaysia Plan(1990–1995), however, only at the beginning of 7th Malaysia Plan(1996–2000), solar research started to surge. Since solar is arelatively new field in Malaysia, most of the research related tosolar is considered as basic research and has been dominated bythe universities. To ease the R&D activities related to solar energy,the Malaysian Government introduced the Intensification ofResearch in Priority Area (IRPA) programme in 1988 (Pey, 2008),one of the key sources of research grant available for the researchcommunity in Malaysia. The IRPA programme supports R&Dactivities in the public sector on areas that address the need ofMalaysia industry for the enhancement of the national socio-economic position (Sopian et al., 2005). Each IRPA programme hasa specific funding allocation which can last for the duration ofeach Malaysia Plan, i.e. 5 years.

In IRPA7, there were 102 projects related to energy, amountingto MYR31.83 million; and from that amount, 23 projects weredirectly linked to solar. Although the number was relatively small,these projects consumed nearly half of the total R&D budget. This

Fig. 2. Allocation of IRPA7 funding for specific renewable R&D projects (Sopian

et al., 2005).

F. Muhammad-Sukki et al. / Energy Policy 39 (2011) 7975–7987 7977

was because the cost of each solar R&D activity was relativelyhigh—some of them even higher than MYR1 million each (Sopianet al., 2005). These research activities were conducted by theMalaysian universities, with the top four highest amount offunding being awarded to Universiti Teknologi Malaysia (UTM),Universiti Kebangsaan Malaysia (UKM), Universiti Putra Malaysia(UPM), and Universiti Sains Malaysia (USM). Fig. 2 shows theAllocation of IRPA funding for specific renewable R&D projects inthe 7th Malaysia plan.

According to the statistic from Malaysian Science and Tech-nology Information Centre (MASTIC), there were about 53 Scienceand Technology projects related to solar being conducted inMalaysia from 1990 to 2005 under the IRPA incentive (MASTIC,2010). From 2006 onwards, the Ministry of Science, Technologyand Innovation (MOSTI) decided to replace the IRPA programmewith the Science Fund and Pre-Commercialization Fund (Pey,2008). The Science Fund is a grant provided by government tocarry out R&D projects that can contribute to the discovery of newideas and the advancement of knowledge in applied sciences,focusing on high impact and innovative research (MOSTI, 2011).The Pre-Commercialization Fund on the other hand is aimed toundertake the development of new or cutting edge technologiesor further develop or value adds existing technologies or productsin specific areas for the creation of new businesses and generationof economic wealth for Malaysia (MOSTI, 2011). There are twofunds available under the Pre-Commercialization Fund, which arethe TechnoFund and InnoFund (Day and Muhammad, 2011). Todate, the research covers a variety of areas to solar energycapture, including PV cell, inverters, hybrid systems, concentra-tors, and tracking systems (IEA PVPS, 2009). It is reported that byApril 2010, approximately MYR157 million had been awarded togreen technology research including solar under the 9th MalaysiaPlan (Ongkili, 2010).

2.3. PV implementation in residential houses (1995–2004)

Solar installation can be divided into two categories; stand-alone PV and grid-connected PV. The stand-alone PV can beinstalled in rural areas. Up to 2004, the cumulative grid-con-nected PV was 468.00 kWp (Haris, 2010b), but this figure waslargely due to the installation of a 362.00 kWp project undertakenby Technology Park Malaysia in 2001 (Haris, 2006). However, thecontributions from residential houses were very small, about9.00 kWp corresponding only to three installations. The first

grid-connected PV installed in a domestic house in Malaysiawas made in August 2000, where a 3.08 kWp solar panel wasinstalled for the Tenaga Nasional Berhad (TNB) officer’s houselocated in Port Dickson. The panel was retrofitted on the roof topcovering an area of 26 m2. Three months later, another installa-tion was carried out in Subang Jaya, with an output rating of3.12 kWp which covered a roof area of 24 m2. The next installa-tion was performed a year after the second installation, on a roofof a house in Subang Jaya, with a capacity of 2.82 kWp. All theseinstallations were completed by the TNB research team (Haris,2006; MBIPV Project, 2010b).

2.4. National policy

Since its independence, Malaysia has introduced a number ofpolicies and acts, which were related closely to the nationalenergy development (Chua and Oh, 2010). The first renewablesource used in Malaysia was hydro, which was listed as one of thecontributors to the energy mix, in the Four Fuel DiversificationPolicy in 1981. This policy managed to reduce the dependency onoil from about 75% in 1980 to only 4.2% in 2000 (Mustapa et al.,2010). Although hydro contributed to about 10% of the energymix in Malaysia in 2000, another 90% of the supply was stilldominated by fossil fuels. When the price of oil surged in 2000(IEA, 2004), the Malaysian Government started to consider non-hydro renewable energy as one of the key energies, by imple-menting the Fifth Fuel Policy in 2001 under the 8th Malaysia Plan.This policy identified the potential in biomass, biogas, municipalwaste, solar, and mini-hydro as the sources of electricity genera-tion. When this policy was introduced, it was aimed to generate5% of the electricity from renewable resources in 5 years time(Leo-Moggie, 2001). Unfortunately, this target only managed toreach 0.3% by the year 2005 (Economic Planning Unit, 2006). Thegeneral causes for the slow renewable energy development werepresented in (Abdul Malek, 2010). These causes included:(i) market failure—there is only one buyer which results inunequal bargaining position of the utility and renewable energyproject proponents; (ii) economic, financial, and technologicalconstraints which limits the performance of the market; (iii)absence of a legal framework which prevents proper and legalaction from being taken, and (iv) lack of institutional measures tomeet informational and technological needs. Further analysis onthe setbacks specifically in solar technology indicates that the twomain reasons were due to the high cost of and low efficiency ofthe PV cell (Ahmad et al., 2011; Maricar et al., 2003; RahmanMohamed and Lee, 2006).

There were a number of key projects implemented in Malaysiafrom 1999 such as the Malaysia Industrial Energy EfficiencyImprovement Project (MIEEP), Small Renewable Energy PowerProgramme (SREPP), Malaysia Building Integrated Photovoltaic(MBIPV) Technology Application Project, Building Energy Effi-ciency Programme (BEEP), and Green Building Index (GBI) (Chuaand Oh, 2010; Oh et al., 2010; Rahman Mohamed and Lee, 2006).However, the installation of solar PV in residential houses startedto soar during the Malaysia Building Integrated Photovoltaic(MBIPV) Technology Application Project which was launched onthe 25th July 2005 (MBIPV Project, 2010a). The main objective ofthis programme was to reduce the long-term cost of the BIPVtechnology in Malaysia, which would lead to an increase in theBIPV technology applications whilst reducing emissions of greenhouse gases. The MBIPV project focused on the market develop-ment for BIPV technology, and on building the national capacityin three major areas: (i) policy and education; (ii) technical skilland market implementation, and (iii) technology developmentsupport. This project introduced three major incentives: (i) SURIA100 and SURIA for developers; (ii) demonstration, and (iii)

Fig. 3. Total number of PV installed and commission until 31/12/2010 (MBIPV

Project, 2010a).

F. Muhammad-Sukki et al. / Energy Policy 39 (2011) 7975–79877978

showcase. Each incentive involved varying amounts of invest-ment to incentivize the installation of BIPV technology as well asto accelerate the program. This project ended on the 31stDecember 2010 and has shown some interesting findings(MBIPV Project, 2010b; Chua and Oh, 2010) which are as follows:

(i)

the total capacity successfully installed and commissionedwas 1516.00 kWp. There were 109 projects completed fromwhich 64 were installed on residential houses, correspondingto about 459 kWp (see Fig. 3);

(ii)

the cost of PV reduced greatly from MYR31,410.00 per kWpin December 2005 to MYR19,120.00 per kWp in March 2010,a reduction of about 40% of the cost; and

(iii)

the bidder (home owner) was willing to pay a higher amountof the total of a PV installation, from 46.7% to 59.9%.

After the successful MBIPV project, the Government of Malay-sia in the 10th Malaysia Plan has confirmed that a new renewableenergy law will be put in place, where the Feed-In Tariff (FiT) isincluded. The new law is targeted at domestic users to generateelectricity in their houses by using renewable resources (Chuaet al., 2011). It is aimed at achieving 5.5% of the electricitygenerated from renewable energy sources by the end of 2015(Economic Planning Unit, 2010).

Table 2 summarizes the information in Chapter 2, indicatingthe short term emphasizes in each Malaysia Plan, the policies andacts introduced in each time line as well as the key projectsimplemented which closely related to the increased in renewableenergies usage in Malaysia.

1 The currency used in the calculations throughout this paper is in Malaysian

Ringgit (MYR). The conversion rate for £1.00 is assumed to be equivalent to

MYR4.80.

3. Feed-In Tariff (FiT)

3.1. Overview of FiT

Feed-In Tariff (FiT) is a scheme in which the owner will be paidfor any amount of electricity generated in kilowatt-hour (kWh), witha contract period of typically 20 years. This is one of the incentivesoffered to increase the renewable energy penetration, especially forsmall scale electricity generation. FiT was first introduced inGermany in 1991 under the ‘Electricity Feed Law’ (EFL), but therevised FiT scheme under the ‘Renewable Energies Law’ (REL) law in2000 has transformed the solar industry in Germany (Qiang Zhai

et al., 2010). By 2004, the PV installation in Germany increased bythirtyfold (Pietruszko, 2006) and the expectation was that it wouldincrease further. Even with a low average amount of solar insolationper year, Germany still managed to become the leading country interms of PV installation (Chua et al., 2011), with a total cumulativeinstallation of more than 18,000 MWp in mid-2011 (German FederalNetwork Agency, 2011). Due to its significant success, the sameconcept is currently being adopted in about 41 other countries in theworld (WFC, 2007).

The United Kingdom (UK) for example, started to implementFiT in April 2010 (DECC, 2010b). For any house owner in the UKwho enrolls in this scheme, there will be three separate metersinstalled in their house; one for measuring the generated elec-tricity, one for measuring the exported electricity and one forquantifying the amount imported from the grid. For any solarpanel installed in an existing building, the FiT could potentiallybenefit the participants for a contract period of 25 years in threeways1 : (i) all the electricity generated will be paid at £0.433(MYR2.0784) per kWh; (ii) any electricity exported into the gridwill be paid at £0.03 (MYR0.1440) per kWh, and (iii) the elec-tricity generated can also be used by the participants, whichreduces the amount of electricity required. Fig. 4 shows theconceptual diagram of an FiT implementation in a UK house. Onaverage, the current cost of electricity is £0.13 (MYR0.624)per kWh (DECC, 2010b) and on average 4457 kWh is consumedannually per household (BERR, 2007). After five months since thelaunch of the FiT scheme, there were 3606 installation of PV indomestic houses, with a capacity of 8.457 MW (DECC, 2010a).

Malaysia has passed the Renewable Energy Act on the 4thApril 2011, in which an FiT scheme is proposed. The FiT inMalaysia gives much emphasis on solar PV. In Malaysia’s case,only two meter readings are required, which are the generationand the import meter. All the electricity generated will beexported back to the national grid. Table 3 shows the rate forthe amount of electricity generated using solar PV, ranging fromMYR0.85 to MYR1.23 per kWh produced, depending on theinstalled capacity. Additional bonuses are also introduced ontop of the basic FiT rate (ranging from MYR0.01 to MYR0.55 -per kWh) when the installation meets specific criteria. This meansthat any applicant could gain the maximum amount of MYR1.78 -per kWh produced. It has a payback period of 21 years and thedegression rate is 8% per year (Malaysian Government, 2011). Thelaunching date for the implementation of the FiT programme isscheduled on the 1st December 2011 (Kui, 2011).

The FiT scheme will be financed by the consumers themselves.This is achieved by increasing the current electricity tariff by 1%, andthat amount is pooled into the FiT fund (Yee, 2010), and theincrement of the electricity tariff is scheduled to start on the 1stDecember 2011(Utusan Malaysia, 2011). This fund will be availableuntil 2030 when it will reach a cumulative value of MYR18.9 billion.With a degression rate in place, it is expected that by that year, thecost of solar electricity will reach grid parity, driven by theenvironment and the energy security in Malaysia (Abdul Malek,2010; Haris, 2010a). Catalyzed by the FiT scheme, the renewableenergies are expected to play a significant role in Malaysia, with aprojected cumulative capacity of 11.5 GW by 2050, where close to9 GW is expected from the contribution of solar PV, as illustrated inTable 4 (Abdul Malek, 2010). Fig. 5 shows the estimated annualelectricity consumption in Malaysia from 2011 until 2050, whereabout 25,579 GWh of the requirement will be supplied by thesegrid-connected renewable energy mixtures (Haris, 2009b). This

Table 2Malaysia’s renewable energies journey (Abdul Malek, 2010; Chua and Oh, 2010; Rahman Mohamed and Lee, 2006; Oh et al., 2010).

Timeline 1996–2000 2001–2005 2006–2010 2011–2015

Malaysia Plan 7th Malaysia Plan 8th Malaysia Plan 9th Malaysia Plan 10th Malaysia Plan

– Emphasis on the sustainable

development of depletable

resources and the

diversification of energy

sources.

– Ensuring adequacy of

generating capacity as well as

expanding and upgrading the

transmission and distribution

infrastructure.

– Encouraged the use of new and

alternative energy sources as

well as efficient utilization of

energy.

– Emphasis on the sustainable

development of energy

resources, both depletable and

renewable. The energy mix

includes five fuels: oil, gas, coal,

hydro, and Renewable

Energy (RE).

– Intensify efforts on ensuring

adequacy, quality, and security

of energy supply.

– Greater emphasis on Energy

Efficiency (EE): encourage

efficient utilization of gas and

RE as well as provide adequate

electricity generating capacity.

– Supports the development of

industries in production of

energy-related products and

services.

– Provide incentives for EE, use of

RE resources, and to maintain

quality of power supply.

– Emphasis on strengthening

initiatives for EE especially in

transport, commercial, and

industrial sectors, and in

government buildings.

– Encourage better utilization of

RE through diversified fuel

sources.

– Intensify efforts to further

reduce the dependency on

petroleum provides for more

efforts to integrate alternative

fuels.

– Incentives in promoting RE and

EE are further enhanced.

– Short term goals vested in

National Green Technology

Policy:

– Increased public awareness and

commitment for the adoption

and application of green

technology through advocacy

programmes.

– Widespread availability and

recognition of green technology

in terms of products, appliances,

equipment, and systems in the

local market through standards,

rating and labeling

programmes.

– Increased Foreign and Domestic

Direct Investments (FDIs and

DDIs) in green technology

manufacturing and services

sector.

– Expansion of local research

institutes and institutions of

higher learning to expand

research, development, and

innovation activities on green

technology towards

commercialization through

appropriate mechanisms.

Policy/Act Fifth Fuel Policy (2000) Energy Commission Act (2001) National Biofuel Policy (2006) Renewable Energy Act (2011)

Introduced in recognition of the

potential of biomass, biogas,

municipal waste, solar, and mini-

hydro as potential renewable energy

resources for electricity generation.

The Energy Commission (or

Suruhanjaya Tenaga) was

established to provide technical and

performance regulation for the

electricity and piped gas supply

industries, as the safety regulator for

electricity and piped gas and to

advise the government on matters

relating to electricity and piped gas

supply including EE and RE issues.

– Supports the five fuels

diversification policy. Aimed at

reducing the country’s

dependence on depleting fossil

fuels, promoting the demand for

palm oil. Five key thrusts:

transport, industry,

technologies, export, and

cleaner environment.

Implementation of feed-in tariff

mechanism.

National Renewable Energy Policy

and Action Plan (2010).

– Enhancing the utilization of

indigenous RE resources to

contribute towards national

electricity supply security and

sustainable socio-economic

development.

Key project Malaysian Industrial Energy

Efficiency Improvement Project

(MIEEIP)

Small Renewable Energy Power

Programme (SREPP)

Malaysia Building Integrated

Photovoltaic Technology Application

(MBIPV) Project

– Started in 1999 and ended in

2009 to improve EE in

Malaysia’s industrial sector. It

achieved EE by removing

barriers to efficient industry

energy use and creating

institutional capacity in policy

development, planning,

research and implementation of

sustainable energy projects.

Launched in 2001 with the aim of

encouraging private sectors to

undertake small power generation

projects using renewable resources

including biomass, biogas,

municipal waste, solar, mini-hydro,

and wind energy.

– Started on 25 July 2005 and

ended on 31 December 2010,

the principal objective of MBIPV

project is to reduce long-term

cost of BIPV technology within

Malaysian market, which

subsequently leads to

sustainable and widespread

BIPV technology applications

that avoid GHG emissions from

the country’s electricity sector.

Building Energy Efficiency

Programme (BEEP)

EE in buildings promotes optimal

use of energy in heating, cooling

and lighting which can be

achieved by several strategies that

optimize and regulate energy use

in the building envelope such as

windows with glazing to prevent

heat gain, and controls for

regulating energy use.

Research and

development

funding

Intensification of Research in

Priority Area 7 (IRPA7) programme.

Intensification of Research in

Priority Area 8 (IRPA8) programme.

Science Fund and Pre-

Commercialization Fund.

Science Fund and Pre-

Commercialization Fund.

F. Muhammad-Sukki et al. / Energy Policy 39 (2011) 7975–7987 7979

Fig. 4. The FiT implementation in the UK.

Table 2 (continued )

Timeline 1996–2000 2001–2005 2006–2010 2011–2015

Source of

electricity in

Malaysia at

the end of

timeline.

Oil (4.2%); coal (8.8%); gas (77.0%);

hydro (10.0%); and others (0.0%).

Oil (2.2%); coal (21.8%); gas (70.2%);

hydro (5.5%); and others (0.3%).

Oil (0.2%); coal (36.5%); gas (55.9%);

hydro (5.6%); and others (1.8%).

Cumulative

on-grid PV

commis-

sioned and

installed at

the end of

timelinea.

29.05 kW 481.48 kW 1516 kW 1650.63 kW (until 25 May 2011).

a This figure includes 468 kWp baseline (grid-connected PV systems installed before the MBIPV project commenced of which some have been dismantled).

F. Muhammad-Sukki et al. / Energy Policy 39 (2011) 7975–79877980

could potentially avoid an emission of 17,649,620 tonnes of CO2 ayear by 2050 (Abdul Malek, 2010).

The introduction of FiT will provide greater socio impacts toMalaysia as a whole which are: (i) creation of a minimum of52,000 ‘green’ jobs to construct, operate and maintain RE powerplants; (ii) more than MYR70 billion of RE business revenues isprojected to be generated from RE power plants operation, whichwill generate tax income of minimum MYR1.75 billion to Malay-sia Government; (iii) a minimum of MYR19 billion worth of loansis estimated to be generated for RE projects, which will providebanks with new sources of revenues; (iv) a huge reduction of CO2

emission (as illustrated in Table 4), which could translate tominimum of MYR2.1 billion in savings of external cost to begenerated to mitigate CO2 emissions (total 42 million tonnesavoided from 2011 to 2020, on the basis of MYR50 per tonne ofexternal cost), and (v) Malaysia is perceived as a country with aglobal social responsibility and bears its share to mitigate climatechange, and in addition to that, the Malaysia Government isperceived as being responsible to ensure energy security andautonomy, so the country’s economy is resilient and sustainablein the long run (Ministry of Energy, Green Technology and Water,2011). Further advantages on the FiT programme in terms ofeconomic, political, social, and environmental were discussed indetail by Mendonca et al. (2010) and the summary of thediscussion is presented in Table 5.

However, to ensure that the FiT scheme works successfully inMalaysia, several issues must be effectively addressed by the law.These are: (i) the electricity generated must have guaranteed accessto the grid; (ii) the local approval procedures are streamlined andclear; (iii) the FiT rate must be high enough to generate return andprofit; (iv) the FiT rate is fixed for a long period for businesscertainty and security; (v) there is an adequate degression rate toachieve grid parity; (vi) there is sufficient fund created to pay the FiTrate for the whole contract period; and (vii) a competent agency isavailable to implement the FiT (Haris, 2009a).

3.2. Is FIT a good investment?

As mentioned earlier, one of the requirements to implementthe FiT is to ensure that the scheme will generate a good returnand reasonable profit. It is possible to quantify the investment insolar technology. In this section, the analysis presents a compar-ison of an installation in the UK and Malaysia. For the installationin Malaysia, six scenarios are analyzed, using the solar insolationvalues of 1400, 1643, and 1900 kWh/m2 which represent thelowest, average, and highest amount of solar insolation, respec-tively. Also, for each of these three cases, the lowest and thehighest FiT rates are used (i.e. MYR1.23 and MYR1.78).

First, the cost of installation is calculated, which largely dependson the PV output rating. Next, based on the output rating and thevalue of solar insolation, the yearly electricity output in kWh isestimated and is later multiplied by the FiT rate to obtain the annualFiT income. The annual revenue is obtained by subtracting theyearly maintenance cost from the annual FiT income (Eq. (1)). Thetotal revenue for the whole contract period is calculated by multi-plying the annual revenue by the duration of contract (Eq. (2)). Thetotal profit generated is equal to the difference between the totalrevenue and the installation cost (Eq. (3)). To get the payback period,this figure is generated by dividing the installation cost with theannual revenue (Eq. (4)) while the average annual return oninvestment is calculated by dividing the total profit with the totalcost over the contract period (Eq. (5)). The relations between eachfinancial parameter are given in Eqs. (1)–(5). Table 6 shows thedefinitions of all the financial parameters needed for the financialanalysis in this paper.

R¼ F2M ð1Þ

TR¼ RnT ð2Þ

TP¼ TR2C ð3Þ

Table 3The FiT rate for solar PV in Malaysia (Malaysian Government (2011)).

Renewable

resource

Description of qualifying renewable energy installation Feed-in tariff rate

(in MYR per kWh)

Effective period

(commencing from the

feed-in tariff

commencement date)

Annual

degression

rate (%)

Solar photovoltaic (a) Renewable energy installation having an installed capacity of: Basic feed-in tariff rate

(i) up to and including 4 kW

(ii) above 4 kW, and up to and including 24 kW

(iii) above 24 kW, and up to and including 72 kW

(iv) above 72 kW, and up to and including 1 MW

(v) above 1 MW, and up to and including 10 MW

(vi) above 10 MW, and up to and including 30 MW

1.23 21 years 8.0

1.20 21 years 8.0

1.18 21 years 8.0

1.14 21 years 8.0

0.95 21 years 8.0

0.85 21 years 8.0

(b) Renewable energy installation having any one or more

of the following criteria in addition to (a) above:

Bonus feed-in tariff rate in addition to basic feed-in tariff rate

(i) use as installations in buildings or building structures

(ii) use as building materials

(iii) use of locally manufactured or assembled solar photovoltaic

modules

(iv) use of locally manufactured or assembled solar inverters

þ0.26 21 years 8.0

þ0.25 21 years 8.0

þ0.03 21 years 8.0

þ0.01 21 years 8.0

Table 4Projected renewable energy growth (Abdul Malek, 2010).

Year Cumulative

biomass (MW)

Cumulative

biogas (MW)

Cumulative

mini-hydro

(MW)

Cumulative solar

PV (MW)

Cumulative solid

waste (MW)

Cumulative total

renewable

energies, grid-

connected (MW)

Annual CO2

avoidance

(tonne/yr)

2011 110 20 60 7 20 217 846,975

2015 330 100 290 55 200 975 3,707,825

2020 800 240 490 175 360 2065 7,746,837

2025 1190 350 490 399 380 2809 10,117,015

2030 1340 410 490 854 390 3484 11,393,197

2035 1340 410 490 1677 400 4317 12,060,165

2040 1340 410 490 3079 410 5729 13,166,594

2045 1340 410 490 5374 420 8034 14,950,810

2050 1340 410 490 8874 430 11,544 17,649,620

Assumptions:

1. Renewable energy technical potential:

� Biomass (Empty Fruit Bunches (EFB), agriculture): 1340 MW will be reached by 2028.

� Biogas (Palm Oil Mill Effluent (POME), agriculture, farm): 410 MW will be reached by 2028.

� Mini-hydro (not exceeding 30 MW): 490 MW will be reached by 2020.

� Solar PV (grid-connected): unlimited.

� Solid waste (Refuse-Derived Fuel (RDF), incineration, and sanitary landfill): 378 MW will be reached by 2024 (at 30,000 tonne/day of solid waste as projected

by Ministry of Housing and Local Government, followed by 3% annual growth post 2024).

2. No loss of renewable energy plant capacity (old plants are replaced or upgraded).

3. Renewable energy electricity generation:

� 1 MW Biomass (25,000 tonne/year/MW), Biogas generates 6132 MWh/year (70% capacity factor).

� 1 MW mini-hydro generates 5000 MWh/year (57% capacity factor).

� 1 MW PV generates 1100 MWh/year (13% capacity factor—expected to significantly improve in future).

� 1 MW SW (100.tonne/day/MW) generates 6132 MWh/year (70% capacity factor).

4. 1 MWh RE avoids 0.69 tonne CO2.

F. Muhammad-Sukki et al. / Energy Policy 39 (2011) 7975–7987 7981

PP¼ C=R ð4Þ

ROI¼ ðTP=CÞ=T ð5Þ

To ease the calculations, a number of assumptions are made:(i) each house uses a 2.50 kWp solar panel; (ii) the installationcost is paid in full at the beginning of the project—no loan is takento fund it; (iii) the solar panel maintain 100% performance duringits contract period; (iv) all the electricity generated is exportedback to the grid; (v) the maintenance cost is 1% of the capital cost(IEA, 2010); and (vi) the calculation will be done for the duration

of the contract period, i.e. 25 years for the installation in the UKand 21 years for the installation in Malaysia. All the results fromthe calculations are presented in Table 7.

Consider one of the real examples of a BIPV installation made byPlanet Solar Ltd. where a system was installed covering a roof area of17 m2, and at a cost of MYR60,000.00 (Solarcentury, 2011). With anaverage solar insolation of 1000 kWh/m2 per year (Energy SavingTrust UK, 2005), the solar panel installed in the UK could generateabout 2500 kWh in a year. This translates to an annual generationincome of approximately MYR5196.00. The UK home owner receivesabout MYR360.00 per year for exporting the electricity back to the

Fig. 5. Estimated annual electricity requirement in Malaysia from 2011 until 2050 (Haris, 2009b).

Table 5Advantages of the FiTs (Mendonca et al. 2010).

Economic Green jobs creation

Create FDIs and DDIs for manufacturing and export

Hedge against conventional fuel price volatility

Provide RE investor security

Drive economic development

Create stable conditions for market growth

Simple, transparent policy structure helps encourage new

start-ups and

innovators

Political Demonstrate commitment to RE deployment

Increase energy security and autonomy

Promote a more decentralized and democratized form of

electricity system

Create mechanism for achieving RE and emissions reduction

targets

Increase the stakeholder base supporting RE policies

Social Fairer wealth distribution and empower citizens and

communities

Increased public support for renewables through direct stake

and increased exposure to renewables

Encourage citizen and community engagement in activities

protecting climate and environment

Make RE a common part of the landscape and cityscape

Environmental Reduce carbon emission and pollutions

Encourage energy efficiency measures

Reduce dependency on fossil fuels

Table 6Financial parameters.

Item Symbol

Installation cost C

Annual FiT income F

Annual revenue R

Total revenue TR

Maintenance cost M

Contract duration T

Total profit TP

Payback period PP

Average annual return on investment ROI

Average yearly dividend yield Y

F. Muhammad-Sukki et al. / Energy Policy 39 (2011) 7975–79877982

grid. After deducting the maintenance cost of MYR600.00 a year, theannual return calculated is MYR4956.00 a year, about MYR123,900.00for the whole contract duration. The installation of a PV panel in the

UK has a payback period of 12.11 years, with an average annualreturn on investment of 4.26%. The profit from this investment isestimated to be MYR63,900.00.

For the installation of a 2.50 kWp PV panel in Malaysia, thecost is estimated to be RM47,800.00. This is based on the MBIPVproject result that shows that the average cost of a PV panel isMYR19,120.00 per kWp. The maintenance cost is then expected tobe MYR478.00 per year. For all the six scenarios, the annualrevenue is calculated to be between MYR3827.00 andMYR7977.00, which translates to a total revenue of betweenMYR80,367.00 and MYR167,517.00 for the whole 21 years. Anyhouse owner could get a reasonable profit of up toMYR119,717.00 depending on the location of installation. Theaverage annual return on investment varies from 3.24% to 11.93%,with a payback period of minimum 5.99 years and maximum of12.49 years.

From Table 7, five out of the six Malaysian cases indicate thatthe installation in Malaysia generates higher average annualreturn on investment and shorter payback period when comparedto the one in the UK. This means that, for the same systeminstalled in Malaysia, the investment on the solar PV gives abetter performance than in the UK.

To see if solar PV is a good investment alternative in Malaysia,the results are compared to typical investment schemes availablein Malaysia, which are represented in Table 5. Malaysians havethe opportunity to invest in unit trusts, national unit trusts,Employee Provident Fund (EPF) government bonds, fixed depos-its, and savings accounts. A unit trust allows investors withsimilar objectives to pool their money to be invested in a numberof portfolios, and is managed by professional fund managers(FIMM, 2011). There are 581 funds available in Malaysia whichcan be divided into two groups, conventional and shariah-based.Currently, there are approximately 14.5 million account holderfunds with a total value of MYR228 billion (FIMM, 2011). Thenational unit trust shares the same concept as a typical unit trust,but is managed by Amanah Saham Nasional Berhad (ASNB),the subsidiaries of a government-link company called PermodalanNasional Berhad (PNB). There are 11 funds managed by theASNB (Permodalan Nasional Berhad, 2010). The EPF is a retire-ment fund for all the private sector workers (KWSP, 2011). Sincethe majority of the Malaysians work in the private sector, all ofthem must have an EPF account. They contribute typically 11%from their monthly remuneration with another 12% being paid by

Table 7The cost-benefit analysis of implementing the FiT in the UK and in Malaysia.

Item Unit United Kingdom Malaysia (a) Malaysia (b) Malaysia (c) Malaysia (d) Malaysia (e) Malaysia (f)

Yearly solar insolation kWh/m2 1000.00 1400.00 1643.00 1900.00 1400.00 1643.00 1,900.00

Installation cost MYR 60,000.00 47,800.00 47,800.00 47,800.00 47,800.00 47,800.00 47,800.00

Electricity generated from the 2.5 kWp PV panel kWh 2500.00 3500.00 4107.50 4750.00 3500.00 4107.50 4,750.00

Contract period Year 25.00 21.00 21.00 21.00 21.00 21.00 21.00

FiT rate MYR/kWh 2.2224a 1.23 1.23 1.23 1.78 1.78 1.78

Income from FiT scheme

Generation and exportation of electricity MYR 5556.00 4305.00 5052.23 5842.50 6230.00 7311.35 8,455.00

Maintenance per year MYR 600.00 478.00 478.00 478.00 478.00 478.00 478.00

Annual revenue MYR 4956.00 3827.00 4574.23 5364.50 5752.00 6833.35 7,977.00

Total revenue at the end of contract year MYR 123,900.00 80,367.00 96,058.73 112,654.50 120,792.00 143,500.35 167,517.00

Investment analysis

Total profit MYR 63,900.00 32,567.00 48,258.73 64,854.50 72,992.00 95,700.35 119,717.00

Payback period Year 12.11 12.49 10.45 8.91 8.31 7.00 5.99

Average annual return on investment % 4.26 3.24 4.81 6.46 7.27 9.53 11.93

a This value is a combination of generation tariff of MYR2.0784 and exporting tariff of MYR0.144, as mentioned earlier in Section 3.1.

Table 8Comparison of investment portfolio available in Malaysia.

Type of investment Average yearly

dividend yield (%)

Total return on

investment (MYR)

Average annual return

on investment (%)

Reference for average yearly dividend yield

Unit trust—PITTIKAL 14.29 789,952.15 73.93 (Public Mutual Berhad (2010))

National unit trust—ASB 10.61 397,292.29 34.82 (Permodalan Nasional Berhad, 2010)

Employee provident fund 5.92 159,943.03 11.17 (Bernama, 2010a; Idris, 2009; Thillainathan, 2004)

Government bond 5.00 133,169.01 8.50 (Bank Negara Malaysia, 2009)

Fixed deposit 3.00 88,922.08 4.10 (CIMB Bank, 2011b)

Savings account 0.95 58,298.94 1.05 (CIMB Bank, 2011a)

Solar PV installation—a - 80,367.00 3.24

Solar PV installation—b - 96,058.73 4.81

Solar PV installation—c - 112,654.50 6.46

Solar PV installation—d - 120,792.00 7.27

Solar PV installation—e - 143,500.35 9.53

Solar PV installation—f - 167,517.00 11.93

F. Muhammad-Sukki et al. / Energy Policy 39 (2011) 7975–7987 7983

their employer (KWSP, 2011). On top of compulsory monthlydeduction, they could also add additional contributions into theEPF fund. Government bonds on the other hand are issued by theBank Negara Malaysia (BNM), which could be redeemed by theinvestors after a certain amount of time, typically 5 to 10years (Bank Negara Malaysia, 2011). Although the dividendyield is small as compared to the unit trust, it offers a secureand reasonable return on the investment. Fixed deposit andsavings accounts are the services offered by all the banks inMalaysia (ABM, 2011). While the account holders could withdrawat any time using the savings account, the fixed account imposedspecific conditions on the amount of money invested,withdrawal frequency as well as the investment period. In return,the fixed deposit offers slightly higher return that the savingsaccount.

In order to perform the comparison between investing themoney in solar panel or other investment instruments, the sameamount of money needed for the installation cost of a PV panel isassumed to be invested in each of them, with the duration ofinvestment equals to the FiT contract period. In this section, onlyone example from each investment instrument is taken intoconsideration. To get the amount of total revenue at the end ofthe investment period, the calculation is carried out using thecompound interest formula available in (Marecka, 2001) which isshown in Eq. (6). To determine the average yearly dividend yieldof each investment type, these figures are obtained based onhistorical data. If the same capital cost of MYR47,800.00 is theinvestment for the duration of 21 years in any of the portfolios,

this money could generate a total return of betweenMYR58,298.94 and MYR789,952.19 at the end of the period.These values are recorded in Table 8. The average annual returnis calculated using Eqs. (3)–(5).

TR¼ Cnð1þYÞT ð6Þ

If the solar investments are compared with the other invest-ment portfolios, it can be seen that in all cases, the average annualreturn on investments are higher than putting the money into asavings account. However, only the solar installation in (f) couldgenerate a better result than the EPF scheme, while the installa-tion of cases (a)–(d) generate less average annual return than thegovernment bonds. From this table, it is possible to conclude thatdue to the lower average annual return, Malaysians might choosenot to invest in the FiT since they have the option of investing inmore lucrative and stable schemes.

4. Perception of Malaysian

Solar without doubt has the potential to go even further inrelation to installation capacity. Driven by the R&D and thesupport mechanisms from the government, solar installationcontinues to increase. Not only that, Malaysia has also managedto attract a lot of Foreign Direct Investment (FDI) in the solar area,amounting to a total of MYR13.8 billion, which will allowMalaysia to climb to position number three in the world in termsof solar PV manufacture in 2011 (Chua et al., 2011). The top

Fig. 8. Proportion of respondents willing to pay a higher price for electricity

generated from renewable sources.

Fig. 9. Rating for the effectiveness of government awareness programme.

F. Muhammad-Sukki et al. / Energy Policy 39 (2011) 7975–79877984

industrial players include GEWD, First Solar, Q-Cell, Sunflower,Tokuyama, MEMC, and STX Energy (Haris, 2010c; Mat Nawi,2008; Chua et al., 2011). An increase in the FDI in solar not onlycreates opportunities such as jobs and domestic demands forsolar PV, it also encourages market competition among manu-facturers in lowering renewable energies technology pricing,leading to better market conditions for renewable energiesinvestors to build and deploy solar projects (Mendonca et al.,2010).

It is also interesting to understand public opinion regarding PVissues in Malaysia. As such, an online survey was conducted overthree weeks, from the 31st December 2010 until the 21st January2011. This survey was aimed at investigating: (i) whether thepublic is concerned about generating greener electricity; (ii)public awareness of government incentives and policies relatedto renewable energy, and (iii) the willingness of the public to jointhe FiT programme. A total of 214 Malaysians responded to thesurvey. This survey was similar to the analysis performed by Hawet al. (2009).

The respondents came from different professional areas, withthe majority of the respondents, 67% of the total aged between 25and 34 years old. Almost 52% of the totals do not own a house andare either living with parents or renting a place to stay. Therespondents were either living in low-rise (i.e. single storeyhouses, double storey houses, semi-detached houses, or bunga-lows) or high-rise (i.e. flat, condominium, or apartment) dwellingsin Malaysia. Fig. 6 shows the distribution of monthly householdincome and Fig. 7 illustrates the monthly electricity billings of therespondents. Out of the total figure, 150 are responsible forpaying the electricity bill of the house.

The results of the survey indicate that 57% are not concernedabout the source of power, whether it is generated from fossilfuels or from renewable energy, as long as electricity is suppliedto their houses. However, if they have the options to choose thesource of electricity, 51.4% of the respondents were willing to optfor electricity generated from renewable sources even though its

Fig. 6. Average monthly household income of the respondents.

Fig. 7. Monthly electricity bill of the respondents.

price is higher than the cost generated from fossil fuels, as shownin Fig. 8.

The next part of the survey aimed to investigate the level ofawareness with respect to the government incentives gearedtowards renewable energy in Malaysia. Around 63.1% of respon-dents were not aware of any incentives available for renewableenergy in Malaysia. Despite the number of publicity drives in themass media (Ali, 2010; Bernama, 2010b, 2010c, 2010d; Gee, 2010;Yee, 2010), this awareness level is very low within the generalpublic. The respondents then rated the effectiveness of thegovernment’s awareness activities in promoting renewable tech-nology (e.g. tax incentives, soft loan, import duty, MBIPV Project,etc.) in Malaysia. The result of the survey is presented in Fig. 9.where 73% rate the effectiveness as either ‘very poor’ or ‘poor’,22% gave a ‘neutral’ opinion and only 5% rated the performance as‘good’. No respondents chose ‘excellent’.

The survey went on to investigate solar PV installation underthe FiT scheme in Malaysia. A brief description was given to allrespondents to explain the FiT processes at the start of the survey.The vast majority appeared to be interested in installing a PVpanel under this scheme, i.e. around 81.3%. Next, the cost ofinstallation was presented to them (ranging from MYR50,000.00to MYR150,000.00 per installation depending on the PV size) aswell as indicating a loan option to finance the installation. Afterlearning these facts, 134 out of the 174 respondents who initiallyagreed to join the FiT scheme decided not to invest in theprogramme (refer to Fig. 10). Possible reasons are: (i) the capitalcost is considered very high; (ii) they do not have sufficientmoney to make lump sum payment since 65% of them have anaverage monthly household income of less than MYR6000.00; (iii)those who have sufficient savings would prefer to invest in otherinvestment instruments, or (iv) although there is a bank loanoption, they are worried about their household debt, which shows

Fig. 10. Responses on FiT programme—to install a PV panel in the house.

Table 9Average score of the preference to choose the electricity

supply. (3¼very important, 2¼ important, and 1¼ least

important).

Preference Average score

Initial cost of implementation 2.44

Electricity tariff 2.20

Source of electricity 1.36

F. Muhammad-Sukki et al. / Energy Policy 39 (2011) 7975–7987 7985

a significant increase due to the current economic crisis (Aziz,2010; Berita Harian, 2010).

The final question of the survey was to examine the preferenceof the respondents on how they chose their electricity supply.There were three factors listed: (i) initial cost of implementation;(ii) electricity tariff; and (iii) the source of generating theelectricity. Around 55.1% chose the initial cost of implementationas their main preference, followed by the electricity tariff at52.3%. The source of electricity came last in the order of pre-ference, chosen by 74.8% of the respondents. The mean averagescore of the preferences is shown in Table 9.

From the survey, it can be concluded that (i) Malaysians arenot concerned about the source of electricity, as long as electricityis supplied to their houses, but given an option, are willing to paya higher price for electricity generated from renewable sources;(ii) the general public has a low level of awareness regardingnational policies and incentives related to renewable energy, withmost of them giving a poor rating on the effectiveness of thegovernment’s awareness programme; and (iii) the majority of therespondents are not willing to invest in solar PV installationunder the FiT scheme, with one of the possible reasons being thehigh cost of implementation.

5. Conclusion

Solar energy has huge potential in Malaysia. Since 2000, solarPV installations have grown significantly in this country. TheMBIPV project was the driving force to accelerate solar PVpenetration in residential houses. With a growing number offunding resources for R&D activities, and supported by numerousgovernment policies, solar could become one of the major renew-able sources for electricity generation in Malaysia. The recentintroduction of the FiT scheme will definitely become the keydriver to boost the solar PV industry in Malaysia, which hasalready successfully happened in Germany, Italy, and the UK. It iscalculated that the FiT rate in Malaysia generates reasonablerevenue and profit to the home owner. However, a comparativestudy with other investment tools available in Malaysia suggeststhat the total return from solar investment is not consideredlucrative enough. A recent survey that was conducted to under-stand the public perspective and perceptions on renewable andsolar PV installation under the FiT scheme suggests that Malay-sians have a low level of understanding of the numerous incen-tives available and are reluctant to invest in solar PV under thecurrent scheme. In spite of the fact that the solar PV industry hasshown an increase in terms of number of installations, the studysuggests that vast majority of Malaysian are still not willing toinvest in this sector. With the low level of awareness of govern-ment policies available in Malaysia, it is not surprising andappears to be one of the major barriers for the FiTscheme—especially solar PV. This requires to be addressed care-fully not only by the government, but also by the private sector.By providing sufficient awareness via the mass media, it ispossible to breakthrough this barrier and see a successful renew-able penetration in Malaysia. However, without appropriateawareness by the general public, this programme might not beable to reach its full potential. In addition, without strong supportfrom the public, the initial target of 5.5% of electricity generatedfrom renewable sources by 2015 will not be achieved. Based onthe literature reviews, financial study and the results from theconducted survey, a number of actions are proposed. These are:(i) to educate and conduct more awareness programmes for thegeneral public, highlighting all government incentives and poli-cies which could benefit everyone in terms of the economy, socialwellbeing, and the environment; (ii) to possibly increase the FiTrate (e.g. up to MYR2.00 per kWh produced), which would resultin generating a higher return, and allow it to compete with otherinvestment options available in Malaysia; (iii) increase R&Dactivities in the area of concentrators, solar trackers, and nano-technology which have proven to increase the electrical output ofthe PV panel; and (iv) to attract more foreign direct investment inthe Malaysian solar sector, which will help to bring down the costper kWp, hence generating more return to investors.

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