Government Incentives for Business

Government Feed-in Tariff (FiT) scheme

Malaysia’s Feed-in Tariff (FiT) system obliges TNB to buy from Feed-in Approval Holders (FIAHs) the electricity produced from solar PV systems over a fixed period of 21 years at a FiT rate, which is set by the government agency, Sustainable Energy Development Authority of Malaysia (SEDA Malaysia).

Solar PV Quota Year 2016

SEDA Malaysia sets a quota on the amount of solar PV systems that can be installed annually and has recently proposed a quota for years 2016 on 12 September 2015.

The proposed quota for all categories, namely, Individual, Community and Non-Individuals along with their respective mechanisms and dates are as follows:

CATEGORIES QUOTA (MW) MECHANISM DATE
Individual 15 Electronic balloting •   End Oct 2015 – Profile creation & submission of application up to 8th Jan 2016 (Fri)
•   19 Jan 2016 – Computerized Balloting Day
Community 5   •   Mid Jan 2016 – Profile and application creation
Non-individual (< 425 kW) 20 Balloting •    End Oct 2015 – Flush old draft applications
•    19 Feb 2016 – Deadline for preparation of application (100% COMPLETED)
•    1 Mar 2016 – Balloting day
•    2 Mar 2016 – Submission of application in SEDA
Non-individual (> 425 kW) 30 Manual submission •    End Oct 2015 – Flush old draft applications
•    23 – 26 Nov 2015 – Submission of applications
•    30 Nov – 4 Dec 2015 – Profile Evaluation
•    7 – 10 Dec 2015 – Technical Evaluation by SEDA
•    Jan 2016 – Final Evaluation by KeTTHA

 

Feed-in Tariff (FiT) Rates

TNB will pay for the solar energy generated based on the FiT rates that will prevail for a period of 21 years from the FiT Commencement Date – once the contract is signed.

Below are the following proposed FiT rates for Commercials for the year 2016 and also an example of FiT Rate calculation for a rooftop with a solar PV system of more than 72 kW.

Description of Qualifying Solar Systems Installation FiT Rates (RM per kWh)
(a) Basic FiT rates having installed capacity of:  
(i) up to and including 4 kW 0.7792
(ii) above 4 kW and up to and including 24 kW 0.7601
(iii) above 24 kW and up to and including 72 kW 0.6139
(iv) above 72 kW and up to and including 1 MW 0.5931
(v) above 1 MW and up to and including 10 MW 0.4652
(vi) above 10 MW and up to and including 30 MW 0.4162
(b) Bonus FiT rates having the following criteria (one or more):  
(i) use as installation in buildings or building structures 0.1550
(ii) use as building materials 0.0828
(iii) use of locally manufactured or assembled solar PV modules 0.05
(iv) use of locally manufactured or assembled solar inverters 0.05

 
e.g. For greater than 72 kW rooftop solar PV system and its applicable FiT Rate:

RM 0.5931 (Basic FiT Rate) + RM 0.1550 [Bonus FiT Rate (i)] + RM 0.050 [Bonus FiT Rate (iii)] = RM 0.7981

Reminder: The applicable FiT rates will prevail for a period of 21 years from the FiT Commencement Date – once the contract is signed.
 

Eligibility

  • A company incorporated in Malaysia other than a company in which a foreign person holds, directly or indirectly, more than 49% of the voting power or issued share capital (excluding preference shares).
  • A body corporate constituted or established under any writen law excluding the Authority.
  • A registered society as defined in the Societies Act 1966 [Act 335].
  • A firm as specified in section 6 of the Partnership Act 1961 [Act 135].
  • Any entity mentioned above who can show financial capability to fund for the solar system.

Rules

  • Each FiT application is limited to a maximum of 425kW.
  • Each site or address can only have ONE solar PV system.
 

Power Systems Study or Connection Confirmation Check

Before applying for the FiT application, the interested party is required to contact the Distribution Licensee (DL) for the below study:

i. Power Systems Study (PSS) for any Renewable Energy (RE)  installation of 180 kW and above; or
ii. Connection Confirmation Check (CCC) for any RE installation exceeding 12 kW up to and including 180 kW.

For grid-connection, PSS or CCC are necessary to assess the potential impact of the distributed generation on the planning and operation of the DL’s distribution system. The studies shall be conducted by the DL or its appointed consultant.

Technical Study Cost and Completion Period:

Net Export Capacity or Rated kWp of Solar System for Commercials Cost (RM) Completion Period
Above 425 kW & up to & including 1 MW or above 425 kWp and up to and including 1000 kWp 20,000 per installation 30 Days
Above 1 MW & up to and including 10 MW or 1,000 kWp and up to and including 10,000 kWp 40,000 per installation 40 Days
Above 10 MW & up to and including 30 MW or 10,000 kWp and up to and including 30,000 kWp 60,000 per installation 50 Days
Above 425 kW and up to and including 1 MW or above 425 kWp and up to and including 1,000 kWp for housing development or individual applications on the solar PV to be connected to the same distribution substation 500.00 per installation 60 Days

 

Double Tax Allowances

Eligible producer can apply for Investment Tax Allowance or Pioneer Status from MIDA. Eligible producer can also claim capital allowance for investment in plant and machinery required for conducting the project.

 
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Disclaimer: The information above is excerpted from SEDA Malaysia and MIDA’s official websites and it serves the purpose as general guides. We do not take any responsibility for any omission or incompleteness of information and if there is any change of FiT rates, rules, and policies set by SEDA Malaysia or MIDA. It is investor’s responsibility to check for the latest information from SEDA Malaysia and MIDA.