FIT - Critical Success Factors

The above illustrates the premium rate paid by the utility company for each unit of energy produced by your home Solar PV. This is the case for solar photovoltaic; there are three other renewable energy sources that enjoy the feed-in tariff (FiT) under the newly passed Renewal Energy Act, namely small hydro, biomass and biogas. For a complete guideline of the different rate, refer to the Feed-in Tariff Update by KeTTHA.

With this attractive FiT rate, the government hopes to solve the slow implementation and take up of renewable energy generation in the country. Remember how many signed up for the Suria 1000 incentive that the government mooted not too long ago? Only a handful.


Will the FiT for RE suffers the same fate as Suria 1000? Yes and No, but before we tick any of the two answers there are several critical factors that need to be closely monitored and or adhered to:

1. Feed-in tariff rates need to be high enough to produce ROI. Put in some carrot in the form of profit to woo takers. Where there is opportunity/profit there is risk worth taken.

2. "High enough" is not attractive if it is not coupled with a "long enough" period to make business sense. The RE Act provide for 21 years. I think that's long enough for any business venture.

3. Ready buyers. No worries there; TNB, SESB and SESCO are obliged to purchase all electricity generated.

4. Fund to finance FiT cost. I think it is the responsibility of everyone to make RE energy a success, and what a better way to take part than to contribute through your utility bills. Yes, we are expected to pay higher electricity tariff in a near future - maybe not all of us - and the extra money we pay to the utility companies can be used to finance the FiT cost.

5. Clear procedure on local approval. Not like the process you have to go through land applications in Sabah.

6. Transparency in implementation such as involvement of only competent persons, constant monitoring, periodical reporting of progress, etc. We do not want to see sudden mushrooming of Jacks and Joe's who know little about things but get the upper hands on what to implement.

7. Calculated degression. Degression means gradual decrease in the FiT rates until they come to parity with the prevailing electricity tariff. This way people are forced to improve such technology to lower the manufacturing cost. For solar PV, degression rate is 8%, a bit steep in my opinion but let's take this as a challenge and beat that figure with even cheaper solar panels!

8. There is an old Malay saying "Ukur baju di badan sendiri". We know the RE Act was adopted from what has been in practice by several Western countries. What we need is to carefully customise it to Malaysian context. A u-turn of decision after a couple of years down the line would not look impressive to say the least.

Let's hope the premium FiT rates spurs us on to achieve the country's goal to lower carbon emission, starting this 3rd Q of  2011. Fingers crossed we do not have to go through the 'brilliant' u-turn decisions on Teaching Maths & Science in English. No, the FiT has nothing to do with that.

Generate electricity at home and earn money

Ever thought of running your home appliances without worrying about your utility bill? Really, in Malaysia? Isn't that the familiar catch line of a spam mail? Is it possible?

Short answer: Yes. It is possible.


Long answer:

Our monthly bill is about RM180 to RM250 monthly, depending on how energy-wise we are on a particular month. I would like to trim that to, say RM30 to RM50 or even zero without having to switch of my fridge, air-conditioners, and other energy guzzling equipment.

This is very much possible with the enactment of the Renewable Energy (RE) Act 2010. According to the RE Bill 2010, residential homes that produce solar energy could earn up to RM1.75 per kWh of electricity produced. Dewan Rakyat has approved the bill earlier this month and once it is enacted  (hopefully next month) it becomes a law. Let me explain.

1 kWh of electricity is 1 Unit of energy consumed as stated in our SESB bills. We are paying a tiered rates for domestic tariff, i.e. RM0.24/unit for the first 40 kWh and RM0.16/unit for the next 160 kWh, and RM0.28/unit for the remainder. If you are to install Solar PV System on your rooftop, SESB will pay you up to RM1.75/unit for the “net” kWh your solar system feed-back to SESB grid. Apparently not the "net kWh", read the Update HERE. (Kindly disregard the following example and explanation)

Interesting? For me, it is.

I say “net” as the energy that is fed back to the grid is the difference between energy that is produced by your home Solar PV System and the energy consumed by your home. Don’t worry about how it’s computed; SESB’s meter will do it for you.

Example:
If your Solar System produced 200kWh this month and your energy consumption is 150kWh then SESB owes you RM87.50 (50kWh x RM1.75). That is an income. But if your energy consumption is 220kWh then you’ll be billed RM4.80 (20kWh x RM0.24, tiered).

Without the Solar PV system, you pay SESB RM27.20 (150kWh x 0.24 & 0.16, tiered) and RM40.80 (220kWh x 0.24 & 0.16 & 0.28, tiered) respectively for the above cases.

For a complete electricity tariff check the SESB Tariff Structure and Rates.

The feed-in tariff works by giving you income when you feed in electricity to the power supplier (SESB) grid and only charge you when you consume more than what your Solar Power system produce.

This tariff is applicable if your Solar Power system is generating up to maximum of 4kWp. The 4kWp refers to the size of the solar power system and in most cases is sufficient to power up a semi-detached house. For installation of bigger than 4kWp, the feed-in tariff is slightly lower.

To give you an idea of how much you’d need to invest, a 1kWp system would cost you RM15,000 to set up, so, for a fairly sufficient capacity of 4kWp system for your bungalow you will need to fork out RM60,000 or perhaps slightly lower. Source: The Star Online

A bit expensive but the Bill has a provision for a guaranteed income for the next 21 years from the date of signing the agreement with your local power producers, such as TNB, SESB or SESCO. That is long enough a payback period and perhaps even outlast the lifespan of the solar panels.

Let’s hope the cost to install solar panels for residential homes drops dramatically when more people start adopting, plus declining cost of the technology.

It interests me and I may seriously consider this when the incentive is rolled out fully.


Further readings:

1) Higher income for home solar energy – The Star
2) Malaysia to start Feed-In Tariff (FIT) for Renewable Energy by 2011 - GK Sdn Bhd

SESB: Loss of revenue due to power theft

AWAS! Stealing electricity can kill! I will not elaborate but there was this recent case near us reported in the local newspaper.

Well, that's the least I can say about power theft. I can always report funny activities by unscrupulous individual or group to SESB but that is all. In fact that is the best we, the ordinary citizen can do. After that it's really down to the licence holder/s of power supply to act.

I read a recent news published by Bernama about power theft by squatters or immigrants in Tenom. SESB denied that this ever happened as "upon inspection" there was no connection (read no cable found, no trace of joint) to the Sport Complex.

Come on now! You can't go and inspect after it was already in the news. If I were to be that thief, I'd have remove all my cables and fittings by the time your personnel made a move. Surely the folks must've inform somebody at the regional office discreetly before going public.

There were cases of power theft by squatters near Arkib Negeri sometime ago and what SESB did was to remove the "hook" connectors on the overhead lines and as expected the illegal connection was intact again few days later. Can we not go to the root of the problem rather than treating just the symptoms. (this particular problem was solved by the construction of Ujana Rimba Tropika recreational park as there was no more space for the squatting houses). But what about the many other places that are still leaking precious energy?

REVENUE LOSS OF RM3 MILLION A YEAR! I'm quoting New Sabah Times.

That is what SESB quoted a couple of years ago regarding loss of revenue due to power theft in Sabah. That is a lot of money. Say a unit of energy cost RM0.30 on average. BTW our tariff is tiered so take this figure as approximation. With that kind of unpaid bill, the energy loss is about 11 million kWH.

That's not very green way to manage energy I'd say!

The 11mil kWH can power up:

1) Two 40-50 MLD of water treatment plant for a whole ONE year, or
2) Three 3/4-star hotel in Kota Kinabalu, such as Hyatt, Promenade, for ONE whole year, or
3) Two medium sized sawmills in Sandakan for ONE whole year!!

Why waste the precious energy when the state is faced with insufficient electrical power supply? Is it because the RM3mil is not my and your money? Well, it is partly mine and yours. Are we talking too much, pacifying, and forget about taking action once the hu-ha is over? It's a shame!

So, act on eradicating the power theft. Not just concentrating on disconnecting the supply of registered consumers after one or two month of default in payment. These are soft target so less resources is required to carry out enforcement.

I say go greener by putting effort to stop 10mil kWH of wastage and spare mother earth of further warming. At the same time save yourself a couple of million of Ringgit in the process.

Stop wasting, stop procrastinating and stop the power theft!

Semoga berjaya!