GLOBALLY, we are witnessing an ongoing worldwide energy shortage, environmental crisis and rising raw renewable energy (RE) material costs. Along with this, we see rising concern for climate change and sustainability, increased governance (ESG) considerations.

At the recent 26th UN Climate Change Conference of the Parties (COP26), the world targets to limit temperature rise to 1.5°C with over 100 countries making net-zero 2050 commitments, including Malaysia, alongside the US, Australia and Europe.

As Plus Xnergy enters its 10th year of providing solar solutions in Malaysia, we have witnessed a vast change in the renewables landscape from complex, inefficient systems of the past to modern solar setups complimented with rapidly improving technologies such as AIoT (artificial intelligence of things)

While there are other RE options such as hydro and wind, Malaysia has some of the world’s highest solar potential due to its location in the equatorial zone. In addition, solar is now the cheapest form of electricity in a host of countries.

This year, we foresee increased household solar adoption, a drive towards carbon neutrality and increased support from the Government to spur the renewable energy industry.

Rise of affordable solar

In spite of the recent solar photovoltaic (PV) manufacturing cost spike due to the pandemic, looking back at the past decade, solar systems have actually seen an 85% cost decline. There has been a considerable increase in efficiency from 2% in 1955 to over 20% today.

There are no signs that the efficiency would stop increasing while the cost of solar energy has been decreasing, a major reason why homeowners are increasingly interested in installing solar PV systems.

With an untapped potential of 3.2 million landed houses, the potential for adoption is certainly great in Malaysia.

However, consumers’ main barrier to adoption is still the upfront cost, followed by low awareness of existing government initiatives as residential solar uptake has been markedly lower than in businesses.

At Plus Xnergy, we are addressing this through a first for Malaysia and Southeast Asia. Raising awareness and widening access to home owners through a rent-to-own scheme which makes solar affordable whilst allowing for up to 90% monthly bill savings.

Instead of monthly grid electricity payments, users now can divert this expense to offset the solar setup’s cost, resulting in minimal to zero increases in monthly expenses, depending on their consumption. With this, we are witnessing a surge in interest and foresee a rise in residential solar in 2022.

Carbon neutral goals

Malaysia’s carbon neutral goal by 2050 places it ahead of its Southeast Asian peers in carbon commitments; Indonesia aims for net zero emissions by 2060 while Thailand by 2070.

A recent initiative in the 12th Malaysia Plan (12MP) highlights carbon tax credits, taxing companies burning fossil fuels by volume or weight of emissions. With its coming implementation, businesses will leverage sustainable practices to avoid these costs.

An encouraging example is Bursa Malaysia and its goal to be carbon neutral by 2022 with Shell and Petronas on similar journeys.

At Plus Xnergy, we have assisted manufacturers such as AJIYA Group of Companies, Mah Sing Plastics Industries Sdn Bhd and Kawan Food Bhd in adopting solar to reduce carbon emissions which in turn lowers their energy bills while providing an attractive return on investment (ROI) which makes both environmental and economic sense.

We foresee more businesses inclining towards clean energy as carbon taxation will effectively make emissions reductions a necessity to retain a competitive advantage.

To achieve this ambitious goal, government initiatives are pertinent as both the private and public sectors will have to work together to realize this vision.

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Spurring RE industry

Policies such as net energy metering (NEM) 3.0, Smart Automation Grants (SAG) and Green Investment Tax (GITA) have been very helpful in allowing the clean energy industry in Malaysia to thrive.

The NEM allows electricity bill rebates with solar set-ups leading to attractive ROI offers. The scheme’s quota for businesses – NEM Net Offset Virtual Aggregation (NOVA) – was quickly oversubscribed, thus proving its popularity.

The GITA and Capital Allowance (CA) are great motivators for business owners as they are eligible for these tax allowances of up to 48%.

Bank Negara Malaysia (BNM) also allocated RM1 bil to assist small medium enterprises (SMEs) in adopting sustainable and low carbon practices.

In terms of technology, the SAG’s RM100 mil allocation has hastened the rate of automation and digitisation, channelled to the manufacturing and services industry. It has helped adopters towards installing smart AIoT energy solutions which translate insights into energy saving.

A push towards adopting IR 4.0 (Fourth Industrial Revolution) is definitely the way forward as energy efficiency is slowly shaping the future of manufacturing. All these efforts are pertinent and we are hopeful that the government will extend and roll out further initiatives in 2022. – Jan 18, 2022

Ko Chuan Zhen is group CEO and co-founder of Plus Xnergy Sdn Bhd

The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.

Malaysia’s renewable energy outlook 2022: Rise of affordable solar