Renewable $olar Energy for GC (Green Community) Homes

This is a follow up to the 30 March post on the Malaysian government’s Feed-in-Tariff (FiT) program for homeowners to become independent power producers and thereby promote the utilization of 100% free and renewable energy and achieve a reduction in carbon emissions.

This is an illustration of how it works:

residential_grid_pv

The system is designed such that all the electricity produced from your rooftop is fed into the power grid. Thus there is no netting between what you produce and consume. If you sign up for FiT in 2013 the government pays you RM1.34 per kWh for the next 21 years – guaranteed by law. My electricty bill for February was RM634.95 as I had consumed 1569 kWh, my average charge was therefore 40.4 sen per unit.

Why is the Government so kind to those who will do FiT?

Well, it isn’t the Government that is being kind to the FiTters. Check your bill and you will see this line item Kumpulan WangTenaga Boleh Baharu which is a 1% surcharge to every account holder who has consumed more than 300kWh per month to fund this renewable energy program. There is now talk that this surcharge of 1% (estimated to be worth RM700 million annually) may soon be doubled to provide more funds.

Another important factor to bear in mind for those interested to be a FiTter is that the payment rate has reduced by a whopping 8% year on year since 2011. In 2014, the gazetted rated is RM1.24 per kWh. Ostensibly, the reduction is in  tandem with the expected lowering of PV system costs. It does not work like this in life. So the early birds  do benefit more. Lock in the 2013 rate for the next 21 years and do so by June 2013 as the application and approval process, culminating in testing and commissioning by Tenaga Nasional, will take a few months.

Paul Leong from P2 and I have met with selected vendors who can deliver such a system and we have decided to nominate a particular authority-approved vendor which has offered the most attractive package. We shall not name the nominated company in this blog as they have ongoing discussions with other customers with whom the price offered to GC residents may not be available to these other potential customers. We will release the details of the proposal to only those who are genuinely interested for direct dealings with the company concerned.

The rooftops in GC should be able to accommodate an 8kW system with the larger bungalows going further to 12kW. A site survey must be conducted to determine the capacity as the roof alignment may not be so ideal.

The proposals at a glance:

12 kW System

8 kW System

PV Modules -Monocrystalline 45 pieces of Trina 265Wp 30 pieces of Trina 265Wp
Module Surface Area 72 sq meters 48 sq meters
Inverter SMA Sunny Tripower STP 12000TL SMA Sunny Tripower
STP 8000TL
Expected Annual Energy Yield 14,310 kWh pa 9,540 kWh
Average Annual FiT Income RM19,239 RM12,826.00
Maximin AC Power 12 kW 8 kW
Performance Ratio 80% approx 80% approx
CO2 Reduction per Annum 9.02 tonnes 6.02 tonnes
Price(before discount) RM105,500 RM75,000
Payback Period 5 years 5 years
Discount for 10 pax RM9,700 RM7000
Warranties 10 years manufacturing defects for PV ModulesPower output guarantee:> 90% in 10 years> 80% in 25 yearsInverter -5 years standard warranty; 98% Inverter efficiency 10 years manufacturing defects for PV ModulesPower output guarantee:> 90% in 10 years> 80% in 25 yearsInverter -5 years standard warranty; 98% Inverter efficiency

This is a serious investment proposal with real returns that are guaranteed. There are not many investments that will pay you 17% – 18% per annum for the next 21 years. There are leasing companies which back this kind of investment in solar technology, if there is a need for financing.

Please contact me (crema.foam@gmail.com) if you are interested and I shall send the details of the proposal to you. To qualify for the discount shown above, the supplier expects at least 10 customers.

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7 Responses to Renewable $olar Energy for GC (Green Community) Homes

  1. Sze Fook Lim says:

    A word of caution, make sure the installer guarantees the power output specified for the lifespan of the system. Solar systems tend to lose its efficiency very quickly due to dust, contamination and corrosion due to sea salt as we are near the coast. The other variable is sunlight, it fluctuates which will result in lower outputs.

    • The guarantee is there but regular maintenance is recommended to overcome the problems you mentioned.

      I’ll leave God with the sunlight.

      On Mon, May 20, 2013 at 11:03 PM, Glenmarie Cove Residents and Owners Associati

  2. While the increase in the surcharge has been talked about, I hope the Government will find other ways to fund the program. IMHO, the surcharge is an anti-social program mandating the poorer people to subsidize those who can afford to install the PV panels. It sucks but that is how things are. Will SEDA regress the FiT payment rate after 2014 to solve the shortage of funds which can well happen when more people become interested in FiT. Maybe, but SEDA has to be careful too because if the payment rate is lowered too much, installing the system becomes less attractive and there goes the objective of harnessing renewable energy and reducing carbon emissions. The only people who are not between a rock and a hard are those who sign up for FiT today.

    Historically, electricity rates have gone up by an average 2% every 2 years. You will pay whatever TNB wants you to pay for your consumption of electricity, whether you do FiT or not. The PV panels on your roof is a form of investment. I think you are confused by the ‘netting’ effect.

    Should you sell your house, you can transfer the Feed-in Approval to the new owner with the same tariff for the remaining effective period or surrender the FiA without penalty. If you sell, say, after 10 years, there are still 11 years remaining and you could calculate the present value of the payment stream for these 11 years at the point of sale and decide how much of the present value you want included into your sale price. Or you could let the new owner have it all for the remaining 11 years as an inducement to buy your house.

    Needless to say, if your remaining lifespan is not likely to exceed 5 years, forget FiT!

    • Gary says:

      I realized this while sitting on the throne thinking about this. An investment is and investment. This one gives a whopping 18%. Does it protect against inflation? Maybe not but so are many other forms of investment. Also thought about bundling it with the house in the event of a sale. Since this is a new thing you could convince the valuer to up the value so that the buyer can secure a loan big enough to cover your price. Still a good one. Better than some investment linked insurances I know.

  3. Gary says:

    hmm… 10 cust or more… does sound like a groupon deal. 17 – 18% per annum returns sounds attaractive

    • If we don’t gather 10 investors who care about mother earth and their wallet, and the supplier stick to their guns, then those who are still interested will have the privilege to pay about 10% more.

      • Gary says:

        Some more questions pop into my head… what if the surcharge of 1% for renewable energy and our TNB charge per KW consumed, is increased to the extent this investment become only as attractive as a fixed deposit? Also and observation… you can’t move or sell your property for at least 5 years and if you wanna enjoy the profits… at least stay put for 10 years.

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