Globally, we are witnessing an ongoing worldwide energy shortage, environmental crisis and rising raw renewable energy 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 United States, 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 complemented with rapidly improving technologies such as AIoT.

Whilst there are other renewable energy 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.

The Rise of Affordable Solar for Malaysian Households

In spite of the recent solar 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 whilst 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.

Rooftop solar photovoltaic setups by Plus Xnergy. Left: for businesses — AJIYA Group of Companies in Segamat, Johor. Right: for homes — KotaSAS, Kuantan

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 whilst 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 and Kawan Food in adopting solar to reduce carbon emissions, which in turn lowers their energy bills whilst providing an attractive return on investment, making both environmental and economic sense.

We foresee more businesses inclining towards clean energy, as carbon taxation will effectively make emissions reduction 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 realise this vision.

Efficient Government RE Initiatives to Spur 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 setups leading to attractive ROI offers. The scheme’s quota for businesses, NEM Net Offset Virtual Aggregation (NOVA), was quickly oversubscribed, 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 also allocated RM1 billion to assist small and medium enterprises (SMEs) in adopting sustainable and low carbon practices.

In terms of technology, the SAG’s RM100 million 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 IR4.0 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.

Malaysia’s Energy Transition

To achieve its goals, a well-managed transition to a low-carbon economy is pivotal through concerted efforts from the private and public sectors. This will spur various sectors, creating new jobs and opportunities whilst contributing to GDP.

Whilst Malaysia pushes on with its energy transition, we feel the pace can be fastened as our ambitious climate action goals come with the hefty challenge of decarbonising a fossil fuel-reliant economy. As stakeholders of the planet’s future, urgent action is needed for us to fast track our sustainable efforts whilst balancing environmental and economic factors.

-- BERNAMA

Ko Chuan Zhen is the Group CEO & Co-Founder of Plus Xnergy.