What is Feed-in Tariff (FiT)?

Overview of the FiT System for Solar PV System in Malaysia

Malaysia’s Feed-in Tariff (FiT) system obliges Distribution Licensees (DLs) to buy from Feed-in Approval Holders (FIAHs) the electricity produced from grid-connected solar PV system over a fixed period of 21 years at a FiT rate, which is set by a governmental agency, SEDA Malaysia.

By guaranteeing access to the grid and setting a favourable price per unit of solar energy, the FiT mechanism would ensure that solar energy becomes a viable and sound long-term investment for companies industries and also for individuals.

Key terminologies in Feed-in Tariff (FiT):

  • Distribution Licensees: Companies holding the license to distribute electricity (e.g. TNB, SESB, NUR).
  • Feed-in Approval Holder: An individual or company who holds a feed-in approval certificate issued by SEDA Malaysia.  The holder is eligible to sell renewable energy at the FiT rate.
  • FiT rate: Fixed premium rate payable for each unit of renewable energy sold to Distribution Licensees. The FiT rate differs for different renewable resources and installed capacities. Bonus FiT rate applies when the criteria for bonus conditions are met.

(Source: SEDA Malaysia)