Malaysia aims for 31% renewable energy (RE) contribution in the national installed capacity mix by 2025 and 40% by 2035. To this end, the Malaysia Renewable Energy Roadmap (MyRER) guides the electricity sector’s decarbonisation efforts through the 2035 milestone.
Steady progress has been made through various programmes such as net energy metering (NEM) and self-consumption (SELCO) for residential and non-residential consumers. The liberalisation of the energy market through Corporate Renewable Energy Supply Scheme (CRESS) is another positive step towards ensuring a continued robust RE ecosystem and industry.
Tera Va Managing Director Michael Leong said he hopes that the impetus to advance the National Energy Transition Roadmap (NETR) continues in Budget 2025.
He has suggested several initiatives that could accelerate the nation’s energy transition plans and shared his views on why they can help drive both the industry players and the government to achieve the targets.
Extend or enlarge SolaRIS quota
On the residential front, the Solar For Rakyat Incentive Scheme (SolaRIS) incentive has been positively received with 667 users of the Net Energy Metering (NEM) programme completing solar photovoltaic (PV) installations as at 9 July since SolaRIS’
introduction on 1 April this year. The programme’s introduction saw domestic applications increase to 150 per day from about 100 prior to its launch, and its allocated quota completely utilised as of 11 September 2024. It would be beneficial if NEM and SolaRIS can be extended for another 2 years and to have its quota lifted to enable more installations as there is demand for it. Greater solar PV installation coverage can help reduce burden on the grid and benefit other layers of society who depend on the grid for electricity.
Support SMEs on the sustainability journey
While larger businesses in manufacturing and industry are already incorporating solar PV in their operations as part of their ESG agenda, smaller businesses such as those in shoplots might not necessarily have such an appetite or the resources at their
disposal. It is important to support their adoption of greener technologies as SMEs make up roughly 97% of the Malaysian economy, account for 48% of employment and contribute 38% of total GDP.
The Low Carbon Transition Facility (LCTF) was developed specifically for the purpose of encouraging and supporting SMEs’ adoption of sustainable practices for business resilience. The LCTF can be used to finance the transition to low carbon and
sustainable operations including improving energy efficiency and installing on-site RE generation equipment.
Over RM800 million of the RM1 billion allocation is still available based on Bank Negara Malaysia’s latest annual report.
Michael has put forth two suggestions for consideration in boosting LCTF enrolment. The first is to standardise the facility as currently interested SMEs have to contact individual participating financial institutions to discuss suitable facilities that meet their needs.
This can be resource prohibitive. The second suggestion is to reduce the financing rate or publish a schedule on the applicable rates. For smaller companies, the maximum 5% rate can be a large dent on their cashflow as they need to prioritise
operational sustainability and going concern first and foremost.
Gradual liberalisation of grid
As alluded to earlier, granting third party access to the grid via CRESS is a welcome initiative to increase access to green electricity supply towards Malaysia’s push for net zero. It will also reduce the burden of the national utility supplier.
To spur further participation and in the spirit of a holistic approach, it would be helpful if CRESS participation is afforded to low voltage commercial and industrial categories in addition to users in the medium and high voltage commercial and industrial
categories as is the case with initial implementation. This way, all corporates can enjoy direct access to RE from generators.
The MD concluded by saying that by opening up the scheme to corporates with existing electricity supply demands instead of just those with new or additional electricity supply demands will be appreciated as not all corporates have new or increasing electricity requirements.
As these additions would promote healthy competition that can ultimately benefit electricity users in terms of competitive rates while supporting the national goal to reduce carbon emissions.
