Solarvest Calls On Govt To Facilitate Increase In Solar Energy Adoption, Tax Exemptions In Budget 2023

Announcements made by the Prime Minister Datuk Seri Ismail Sabri Yaakob during the recently concluded 5th International Sustainable Energy Summit (ISES) 2022 have been reassuring to the renewable energy industry.

Solarvest Holdings Berhad Executive Director cum Group Chief Executive Officer Davis Chong Chun Shiong said: “Initiatives unveiled include the allocation and redistribution of a renewable energy quota of 1,200 megawatts (MW) for solar resources, introduction of virtual power purchase agreements (VPPA), development of green energy islands, development of a renewable energy certificate (REC) framework, as well as the establishment of a legal framework for electric vehicle (EV) infrastructure development.

All in all, these are well aligned with one of the three themes in the 12th Malaysia Plan of advancing sustainability, and a good sign that the Government’s policymaking process will remain sustainability-driven for the years ahead. With that, Malaysia’s goal of reaching a 40% renewable energy mix by 2040 and attaining net zero carbon emission by 2050 are well in sight.

“While we are encouraged by the development in the renewable energy space, we reckon that there is still scope for improvement in accelerating Malaysia’s clean energy adoption. In the upcoming Budget 2023 to be tabled, we are advocating for a few aspects that we believe are timely and most effective in maintaining this good momentum,” Chong said.

Solarvest hopes that Budget 2023 will include allocations to:

– Promote Distributed Generation of Renewable Energy;

Further establishment of peer-to-peer (P2P) energy trading platform to allow prosumers and consumers to trade excess solar PV electricity without an intermediary. Supported by digitalisation that enables a secure and transparent transaction, the growth of the P2P platform will promote a greater deployment of solar energy, as well as the mitigation of energy flow congestion in the grid.

As such, this can enhance energy and economic resilience by reducing the need for costly grid expansions in later phases.

– Strengthen grid capacity to 33 kilovolt-ampere (kVA) distribution solar

This can be done by upgrading necessary hardware equipment that prohibits allowed maximum capacity of energy generation from solar PV system and eliminating fault current limiter reactor (FCLR) for solar developers. This could increase the overall solar energy adoption as it will overcome the solar PV system installation capacity.

– Renewable Energy Storage System:

Encourage Battery Energy Storage System (BESS) adoption with the introduction of financial subsidies such as exemptions of Sale and Service Tax (SST), import duty, excise duty, as well as tax incentives like Green Investment Tax Allowance (GITA) and Green Income Tax Exemption (GITE) to energy producers who employ BESS in their facilities. The improved financial feasibility will allow energy producers to adopt BESS and overcome the intermittency issues faced currently.

– Residential:

Offer personal income tax relief of up to RM10,000 per annum over a maximum period of 5 years to encourage installations of rooftop solar photovoltaic (PV) systems in the residential market. The reduction in initial costs will provide incentives for homeowners to adopt solar energy installations.

Place mechanism for Interest-free loasn for the Bottom 40% (B40) income group and interest subsidy loans for the Middle 40% (M40) income group who participate in the Net Energy Metering (NEM) Rakyat rooftop solar program. These financing schemes will further increase the uptake of solar energy in the residential market.

Offer Tax incentives such as GITA and GITE for property developers to integrate solar PV panels in their residential development projects. The involvement of property developers will stimulate wide-scale solar adoption in the residential sector.

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