Feed-in-tariff (FiT) mechanism under the Renewable Energy (RE) Act which is expected to be implemented middle of this year will enable individuals to earn income by selling electricity generated from renewable resources at home.
The FiT system has, proven to be an effective and efficient mechanism to encourage the development of sustainable markets for RE around the world and Malaysia is heading to the same direction.
Under the RE Act, the public will be able to sell electricity generated from RE to utility companies such as Tenaga Nasional Bhd (TNB) and Sarawak Energy Bhd at a fixed rate for a specific period.
Consumers can install solar panel or photovoltaic system at home and it would be a secondary income for them.
These are the summary about the program,
- Typically, a home can install 4kW solar panel system.
- Capital required is about RM60,000 to install 4kW system. With FiT, consumers have to pay only 10%, or RM6,000 while the rest will be a loan from a bank.
- The monthly income generated from the 4kW will be RM696 and the monthly repayment is RM456 to the bank, thus earning consumers a net cash of RM240 per month.
To support FiT mechanisms, 1% electricity tariff hike may come into force in early 2011. However, it will be for those who consume more than 200kW per month. In estimate, 56% of the nation would not be impacted as they consume less than 200kwh a month.
The system is part of the Government’s plan to boost renewable energy contribution to Malaysia’s electricity generation from less than 1% in 2009 to around 5.5% by 2015 and to 11% in 2020. Malaysia is targeting to achieve 25% of total usage of renewable energy by 2050.