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Solar panel homes may sell excess power to TNB from next year   10/10/2016
First geothermal power soon   08/08/2016
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SEDA PORTAL
Frequently Asked Questions on Feed-in Tariff (FiT)
 
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Who will oversee the running of the FiT System?

The management and running of the FiT System will be carried out and overseen by the Sustainable Energy Development Authority Malaysia (“SEDA Malaysia”), a statutory body under the Ministry of Energy, Green Technology and Water, established under the Sustainable Energy Development Authority Act 2011.

  Last updated : 26 OGOS 2011
 
 
Why is the task of implementing the FiT System not given to the Energy Commission? Why does the Government require a new agency?

The Energy Commission is the sole body regulating and promoting all matters relating to the electricity and gas supply industries in Malaysia. Given its sizeable portfolio, the Energy Commission would face a constraint in resources if it is expected to also discharge the full functions of a feed-in tariff implementing agency. This is the why SEDA Malaysia has been set up as an agency dedicated to serving as a one stop renewable energy centre.

  Last updated : 2 SEPTEMBER 2011
 
 
What is the Feed-in Tariff (FiT)?

The FiT System is Malaysia’s new mechanism under the Renewable Energy Policy and Action Plan and the Renewable Energy Act 2011 catalysing generation of renewable energy, up to 30 MW in size. This mechanism allows electricity produced from indigenous renewable resources to be sold to power utilities at a fixed premium price for a specific duration. 

  Last updated : 26 OGOS 2011
 
 
What do you mean by indigenous resources?

Indigenous means renewable resources sourced from within the country and are not imported from neighbouring countries.  

  Last updated : 26 OGOS 2011
 
 
How does the FiT System work?

The fundamental idea underlying feed-in tariffs is that distribution licensees pay renewable energy power generators a premium for clean energy that is generated. These generators sell their clean energy to distribution licensees for a fixed number of years. The exact duration will depend on the type of renewable resource used for power generation. The FiT System provides a fixed payment from distribution licensees for every kilowatt hour (kWh) of renewable energy generated and a guaranteed minimum payment for every kWh exported to the grid.

  Last updated : 2 SEPTEMBER 2011
 
 
When will the FiT System be in place?

The FiT System is scheduled to be in place by 1st December 2011.

  Last updated : 26 OGOS 2011
 
 
Which renewable resources are eligible under the FiT?

The following RE resources will be eligible for FiT:

 

  • Biogas (including landfill gas & sewage);
  • Biomass (including solid waste);
  • Small hydropower; and
  • Solar photovoltaic
  Last updated : 26 OGOS 2011
 
 
What is the status of grid-connected renewable energy in Malaysia currently?

As of May 2011, Malaysia has:

 

  • 40 MW grid-connected power from biomass resources;
  • 4.95 MW from biogas resources;
  • 12.5 MW from small hydro resources;
  • 5 MW from solid waste resources; and
  • 2.5 MW from solar PV resources.
  Last updated : 26 OGOS 2011
 
 
What about the use of solar thermal? Will it be eligible for feed-in tariffs?

No, there are no feed-in tariffs for electricity generated using solar thermal resources.

  Last updated : 26 OGOS 2011
 
 
What about wind and geothermal? Will there be feed-in tariffs for these two energy sources?

No, there will be no feed-in tariffs for wind and geothermal when the FiT System commences in 2011 as the potential of such resources in Malaysia have yet to be determined or analysed. At present, the Ministry of Science, Technology and Innovation through SIRIM Berhad is still undertaking a study to identify the potential of wind as a renewable resource in the country while the Ministry of Natural Resources and Environment will soon be commissioning a study on the potential of power generation from geothermal resources in the state of Sabah. Results from the two studies will only be ready from 2012 onwards. As FiT is sourced from all consumers, funds collected are not meant for financing research and development of technologies but are to be used for proven technologies with established resource potential in the country.

  Last updated : 26 OGOS 2011
 
 
What are the rates for Feed-in Tariff?

The range of feed-in tariff rates for various renewable resources as well as their individual effective periods and degression rates, are shown in the schedule to the Renewable Energy Act 2011 or can be accessed from the following link “prevailing FiT rates”.

  Last updated : 26 OGOS 2011
 
 
Is the FiT System applicable in Sarawak?

No, the FiT System will not be applicable in Sarawak as it has its own legislation and regulations governing electricity supply. The FiT System however is applicable in all other states in Malaysia. 

  Last updated : 26 OGOS 2011
 
 
Is there a cap or quota on the amount of renewable energy to be generated under the FiT System?

Yes, a cap will be imposed on the total capacity that can be generated under the FiT System. This cap will be distributed according to the type of renewable resource utilised and levels of installed capacity. This cap is necessary in view of the finite amounts available from the Renewable Energy Fund.

  Last updated : 26 OGOS 2011
 
 
How is the FiT System financed by the Government?

The FiT System is not financed by the government. Instead it is financed by electricity consumers themselves who contribute one percent (1%) of their total electricity bill towards a Renewable Energy Fund. However, domestic customers who consume 300 units of electricity or less each month will not have their tariffs raised to pay to the Renewable Energy Fund.

  Last updated : 18 NOVEMBER 2011
 
 
Will the Renewable Energy Fund contribute to research and development in renewable energy?

No, the fund will not be used for reseach and development in renewable energy. Renewable energy research and development is addressed under the National Renewable Energy Policy and Action Plan.The fourth Strategic Thrust of the National Renewable Energy Policy and Action Plan highlights the need to strengthen research and development in the renewable energy sector and the Ministry of Science, Technology and Innovation (MOSTI) will spear-head all efforts in this area with strong support from KeTTHA.

  Last updated : 26 OGOS 2011
 
 
What is grid parity? What does it mean and does it have anything to do with us here in Malaysia?

Grid parity occurs when the cost of generating electricity from renewable resources is equivalent or cheaper than the cost of generating electricity from conventional fossil fuels or nuclear energy. Yes, even though our electricity is subsidized in Malaysia, grid parity is still valid for us as we will one day reach grid parity for different RE technologies. It is only the rate at which we reach grid parity that may differ from unsubsidized markets. Those with subsidised energy markets will reach grid parity at a later rate than those without subsidies.

  Last updated : 2 SEPTEMBER 2011
 
 
Can you explain what “displaced cost” means and how it is relevant to me? Do I have to deduct this from the feed-in tariff rates I will be receiving?

The displaced cost under the Renewable Energy Act 2011  is the cost of generating and supplying electricity from conventional fossil fuel sources up to the point of interconnection with the consumer. It will not affect potential renewable energy developers and NO, you do not have to deduct this from your FiT rates.

The displaced cost of electricity is only relevant to distribution licensees and the Authority where on a monthly basis, the distribution licensee will claim the positive difference between the FiT payment and the displaced cost, for all renewable energy generated power, from the Authority.

  Last updated : 26 OGOS 2011
 
 
What is a ‘degression’? What does it mean and why is there a need for one?

Tariff degression refers to the annual reduction of renewable energy tariffs. The rate of reduction depends on  maturity of the technology and the existing cost reduction potential. Tariff degression applies to all technologies and will only affect a developer every time he/she applies for the FiT

For example, a home owner (A) installs a solar PV system in year 1 and signs an agreement with TNB with an FiT rate of RM1.75 per kWh. Home owner (A) will continue to receive this rate throughout his/her agreement duration of 21 yrs. A year after home owner (A) installs the system, his/her neighbour, (B) decides to install a PV system in his/her home too. By year 2 the FiT rate has now reduced by 8% to RM1.61 per kWh. Therefore, home owner (B) will now have a 21-year contract with TNB selling their PV electricity at RM1.61 per kWh. This form of degression rewards the early movers of RE in the country and also promotes cost reduction of RE technology.

  Last updated : 26 OGOS 2011
 
 
How is the degression rate derived?

Degression rate for each technology is based on its potential for future price decline and to prevent market abuse of over pricing and takes into account the status of the RE technology, the system cost trends, O&M costs, needs for fuel cost/transport, inflation, and the starting rates of FiT as well as balancing of the RE Fund. From the RE fund management perspective, the higher degression will imply higher RE capacity for FiT and allows prudent use of public fund.

  Last updated : 26 OGOS 2011
 
 
Why has Malaysia chosen the FiT System? Are there any other countries that use the FiT System?

Malaysia has chosen the FiT System because the feed-in tariffs introduced in other countries have proven to be effective and efficient in developing new markets for renewable energy. The concept of feed-in tariffs is simple and has low administrative costs making it a highly effective tool for boosting renewable energy.

As an example, Germany is the first country which successfully implemented feed-in tariffs. This was done through their Renewable Energy Sources Act 2000 and it is notable that in the first ten years of its implementation of feed-in tariffs, Germany has been able to increase their renewable energy capacity substantially making them the world leader in renewable energy with a renewable energy contribution of 16.1% to their total electricity consumption in 2009. This also created 300,000 green jobs. Furthermore, Germany has not only developed the most dynamic solar PV electricity market but also a flourishing and robust PV industry as a result of feed-in tariffs and this is truly a remarkable feat for a country that is not one of the sunniest in the world.

Many other countries have also implemented feed-in tariffs. As of 2009, feed-in tariff policies have been enacted in many countries including including Australia, Brazil, China, Greece, Iran, Israel, South Korea, South Africa, Taiwan, most countries in Europe and in some states in the United States of America. It is also gaining momentum in other countries such as India and Mongolia. In South East Asia, Thailand and Philippines have also implemented a feed-in tariff mechanism.

  Last updated : 2 SEPTEMBER 2011
 
 
Malaysians currently pay electricity bills based on a highly subsidized gas pricing. Is it possible to transfer a portion of the subsidy to finance renewable energy projects instead of introducing feed-in tariffs?

It is not possible to transfer a portion of the subsidy to finance RE projects as gas is in actual fact not a direct subsidy by the government but what it means is that the use of gas for electricity generation is at a subsidized rate. This is forgone revenue for the government in terms of taxes as the gas, if sold at market prices, will provide a higher income for the country.

  Last updated : 26 OGOS 2011
 
 
What are the measures that will be taken to ensure funds allocated for the FiT System will be managed appropriately?

The management of the fund will be under the supervision of dedicated financial experts appointed by the government. Other measures are also adopted to ensure transparency such the regular disclosure and publishing of financial reports on funding receipts, funding disbursements to feed-in approval holders and distribution licensees, administrative fees payable to distribution licensees and SEDA Malaysia. The accounts of SEDA Malaysia will be presented to Parliament as is required for all such authorities and will be subjected to Government Audit.

  Last updated : 26 OGOS 2011
 
 
Contribution to the Renewable Energy Fund: While the lower income households are exempted from contributing, it appears that the industrial sector (making up 40% of distribution licensees’ clientele) will be the largest contributor to the Renewable Energy Fund. Is the Government aware of this situation?

The Government is aware that the largest contributor to the RE levy is from the industrial sector. For this reason, the impact is only 1% of the electricity tariff where impact to the industry’s cost of manufacturing is minimal. Additionally, the industry may be motivated to offset the incremental electricity cost by applying energy efficiency measure in their factories and perhaps take the opportunity as well to generate RE under the FiT mechanism.

  Last updated : 26 OGOS 2011
 
 
How can the Malaysian Government prevent the distortion of energy prices with the implementation of feed-in tariffs?

Currently, the energy price in Malaysia is already distorted due to the natural gas subsidy for power generation. Furthermore, the cost of electricity generation is not directly passed to consumers whereby the electricity tariff is still regulated.

In this respect, the feed-in tariff mechanism provides the opportunity to pass over the cost of RE electricity generation to consumers but at a very minimum value that has almost no impact to the electricity tariff. The design of the Malaysian feed-in tariff system takes into account the type of electricity that the RE electricity will displace, including the associated transmission and distribution costs. For example, electricity from solar energy will displace peak electricity from natural gas, while electricity from biomass will displace medium load from coal. Thus the RE tariff prices are designed to reflect the true cost of electricity generation, transmission and distribution that it will displace. Hence the argument of energy price distortion is invalid.

The feed-in tariff in Malaysia is designed with an objective to achieve grid parity once the subsidy for fossil fuel is removed and when all external costs of fossil fuel power generation are taken into consideration.

  Last updated : 26 OGOS 2011
 
 
Are retail electricity tariffs subject to change?

Yes, retail electricity tariffs are subject to change and are periodically reviewed by the Government.

  Last updated : 26 OGOS 2011
 
 
From what I understand, the Renewable Energy Fund for feed-in tariffs is based on a “polluters pay concept” meaning high volume consumers will get preference over smaller consumers in terms of the allocation of capacity under the FiT system. Is this assumption correct?

There are no preferential treatments for applications for feed-in approvals. There is no allocation based on the amount a person contributes to the Fund. The application for feed-in approvals is on a first-come-first-served basis.

  Last updated : 26 OGOS 2011
 
 
Is income from feed-in tariffs considered taxable income?

Yes, it is taxable income and any exemptions would require a policy decision from the Government. KeTTHA will monitor the progress of renewable energy growth in the country and conduct necessary analyses before putting forth any policy recommendations on this matter.

  Last updated : 26 OGOS 2011
 
 
Why does Malaysia not introduce ‘green certificates’ like in some European countries where it has been found to be more successful? Is there any plan to establish a green certificate scheme?

Malaysia has decided not to complicate the market at this point of time. There is no mechanism for green certificates except for CDM projects through CERs. The Ministry has carried out extensive studies on the various schemes to catalyse the development of renewable energy in Malaysia and the outcome is that the FiT System is most appropriate at this point of time.

  Last updated : 26 OGOS 2011
 
 
It is estimated that 50, 000 renewable energy jobs will be created as a result of the implementation of the FiT System. What type of labour force will these renewable energy jobs constitute? Will they be high-value jobs or lower value labour force?

The majority of the 50,000 renewable energy jobs estimated to be created will be high value ones that essentially provide professional services such as the design, supply and service of renewable energy installations.

  Last updated : 26 OGOS 2011
 
 
I am a current SREP developer with an existing plant in operation. Can I receive feed-in tariffs?

Yes, you will be eligible to receive feed-in tariffs but will need to apply for a feed-in approval. You must also terminate your existing renewable energy power purchase agreement signed under the SREP programme and enter into a new renewable energy power purchase agreement. However the duration or effective period for you to receive feed-in tariffs will be adjusted according to the number of years your plant has already been generating electricity for commercial sale to a distribution licensee.

  Last updated : 26 OGOS 2011
 
 
I am an existing SREP developer but do not wish to sign-up for feed-in-tariffs. Is this ok?

Yes, you may continue with your current renewable energy power purchase agreement.

  Last updated : 26 OGOS 2011
 
 
Am I still eligible for feed-in tariffs if I am a SURIA 1000 incentives recipient? Do I need to do anything or will my system migrate automatically into the FiT System?

Yes, you will still be eligible for feed-in tariffs but migration is not automatic. You will need to apply for a feed-in approval and sign a REPPA with the distribution licensee. Please visit the webpage on How to Become a Feed-in Approval Holder for more information.

  Last updated : 2 SEPTEMBER 2011
 
 
I am a foreign investor and am interested to apply for a feed-in approval. Am I eligible? What are the requirements for foreigners?

A foreign person of not less than 21 years of age can apply for a feed-in approval for a renewable energy installation utilising solar PV technology as its renewable resource and having an installed capacity of up to and including 72 kW only.

A company incorporated in Malaysia having a foreign person, (alone or together with other foreign persons), holding no more than 49% of voting power or the issued share capital of such company may also apply for feed-in approvals.

  Last updated : 2 SEPTEMBER 2011
 
 
Why is foreign equity capped to 49%?

In the National Renewable Energy Policy & Action Plan, it is clearly stated that the FiT System is to encourage and develop the local industry.

  Last updated : 26 OGOS 2011
 
 
Can a distribution licensee or utility participate in the FiT System?

Yes, but the equity shareholding is capped at a maximum rate of 49% if it is in its area of jurisdiction.

  Last updated : 26 OGOS 2011
 
 
Can State Governments and agencies participate in the FiT System?

Yes, State Governments and agencies can participate in the FiT System through its companies.

  Last updated : 26 OGOS 2011
 
 
Off-grid for rural electrification – Can they be entitled for FiT?
If the community is serviced by a distribution licensee, then they are eligible for the FiT. But if otherwise, they are not entitled to FiT.
  Last updated : 29 JUN 2011
 
 
My company is located in an area where a utility other than Tenaga Nasional Berhad is the distribution licensee. Will I be entitled to receive feed-in tariffs?

Subject to the fulfilment of criteria for eligibility, you will be entitled to receive feed-in tariffs. Details on application requirements for potential renewable energy developers in this segment will be available before the FiT System is launched.

  Last updated : 26 OGOS 2011
 
 
Are CDM projects eligible to apply for a feed-in approval?

We have not restricted the eligibility of Feed-in Approval Holders who apply for CDM but eligibility and approval for CDM will ultimately depend on UNFCCC (to be applied by the developers themselves and separate from the FiT mechanism).

  Last updated : 26 OGOS 2011
 
 
How can I apply for the FiT?

Applications can be made either via SEDA Malaysia’s official website (recommended) or through manual submission. Please check SEDA Malaysia’s website regularly for notification on the application guidelines.

  Last updated : 26 OGOS 2011
 
 
Where can I apply?

Application forms will be made available on SEDA Malaysia’s website and hardcopies will be made available at SEDA’s office. SEDA Malaysia's intention is provide the FiT application as web-based thus allowing you to apply from anywhere as long as you have a computer and internet access.

  Last updated : 2 SEPTEMBER 2011
 
 
Is there a number I can call to find out more?

Yes, there will be a hotline number for the public to call, please visit the webpage on Contact Us.

  Last updated : 2 SEPTEMBER 2011
 
 
When will applications be open to the public?

The FiT system is now scheduled for launch on 1 December 2011.

  Last updated : 26 OGOS 2011
 
 
How about guidelines for applications? Will there be any guidelines available for potential developers?

Yes, in due course, application guidelines will be made available for easy reference but this will be web-based and downloadable from SEDA Malaysia’s official website .

  Last updated : 2 SEPTEMBER 2011
 
 
How will I know if I have been successful in my application for a feed-in approval?

You will be notified instantaneously by the FiT system if you are successful or otherwise.

  Last updated : 26 OGOS 2011
 
 
How long does it take for an application to be processed?

Assuming all documents are submitted in order, applicants can expect instantaneous approval for their applications subjected to the availability of the RE quota.

  Last updated : 26 OGOS 2011
 
 
I have received a notification from SEDA Malaysia stating I have been successful in my application. What next?

Please refer to the process flowchart accessible here: “How to become a Feed-in Approval Holder"

  Last updated : 26 OGOS 2011
 
 
Our company is keen to have a renewable energy installation utilising solar PV as its renewable resource installed at our manufacturing plant. What steps must we take?

For more information, please visit the following link “How to become a Feed-in Approval Holder"

  Last updated : 26 OGOS 2011
 
 
How much PV capacity can an eligible producer seek to install and how will applications be treated?

Eligible producers can apply for approval for any level of capacity up to 30 MW but the capacity that can be approved by SEDA Malaysia will depend on the total capacity that is allocated for each of the respective RE technologies concerned. For PV capacity, there will be two categories of capacities that will be offered:

  • for installed capacities up to and including 1MW; and
  • for capacities > 1MW up to and including 30 MW.

For solar PV up to and including 1 MW, the capacities available will be offered equally among individual and non-individual applicants. All applications will be treated transparently and on equal basis according to the category of the installation such as residential, commercial, industrial, or power plant type, and whether they are roof or façade mounted, or ground mounted.

  Last updated : 26 OGOS 2011
 
 
I have obtained a feed-in approval and have successfully installed a renewable energy installation utilising solar PV at my house. The renewable energy installation is directly connected to TNB’s grid. What should I expect when the FiT System starts?

Both your consumption meter and revenue meter will be read by your distribution licensee. The distribution licensee will issue a bill on your energy consumption and a payment advice on renewable energy generated by your renewable energy installation.  You will have to pay the amount due to TNB for electricity you consumed while TNB will pay you for renewable energy you generated.

  Last updated : 26 OGOS 2011
 
 
Will existing generators be given priority under the FiT System?

No, when the FiT System is launched, it will be open to all on a fair basis. Existing generators will need to submit their applications just like any other eligible producer. However, existing generators will be better positioned to achieve earlier feed-in tariff commencement dates and possibly secure better feed-in tariff rates as their renewable energy installations may already be in place.

  Last updated : 26 OGOS 2011
 
 
I understand that for me to be eligible under the FiT System, I will need to apply for a feed-in approval even though I already have a net-metering account with TNB for my renewable energy installation utilising solar PV. How do I do this?

You can either apply yourself or engage a consultant/service provider to do it on your behalf. Please note that consultants/service providers may charge for their services.

  Last updated : 26 OGOS 2011
 
 
How does SEDA Malaysia know if a person is genuinely applying for a feed-in approval and not just intending to reserve the feed-in approval for resale later?

When applying for a feed-in approval, eligible producers will be required to submit their work plans. These work plans will be monitored closely by SEDA Malaysia. If delays are detected, feed-in approval holders will be requested to declare the status of the installation of their renewable energy installations to SEDA Malaysia. If no satisfactory answer is received from the feed-in approval holder, SEDA Malaysia will revoke the feed-in approval holder’s feed-in approval. This approach is taken is to prevent feed-in approval holders from abusing the FiT System and instead allow genuine and serious parties to apply for feed-in approvals.

  Last updated : 26 OGOS 2011
 
 
Under the SREP programme, renewable energy will only be paid based on a maximum generating capacity of 10 MW. Will SEDA Malaysia consider a revision of the maximum installed renewable energy capacity?

Yes, under the Renewable Energy Act 2011, the capacity limit has already been increased to 30 MW.

  Last updated : 26 OGOS 2011
 
 
Are there limits to the number of applications for feed-in approval that SEDA Malaysia can receive?

Due to the finite funds available from the Renewable Energy Fund, SEDA Malaysia can only approve a limited number of applications every year. Limits will be applied according to the type of renewable resource that is utilised and will be indicated on the online system.

  Last updated : 26 OGOS 2011
 
 
If I install my renewable energy installation utilising solar PV today but am unable to commission it within this year, what rate will I get?

The feed-in tariff rate you will receive will be the rate stipulated in the feed-in approval minus the degression for the year in which the renewable energy installation is commissioned. This calculated rate will remain constant throughout the tenure of your feed-in approval.

  Last updated : 26 OGOS 2011
 
 
If I am able to commission my renewable energy installation utilising solar PV in the year 2011, what rates will I get?

You will be receive the maximum tariff for 21 years. If you commission on 1st January of the subsequent year, the rates will be reduced by 8%. Eligible producers and feed-in approval holders are advised to refer to SEDA Malaysia’s website for current feed-in tariff rates. Note: Degression will be effective from 1st January 2013.

  Last updated : 2 SEPTEMBER 2011
 
 
What is the normal timeframe needed for the development of a renewable energy installation utilising biomass or biogas as its renewable resource? What would happen to the FiT rate if I receive my feed-in approval in 2011 but the renewable energy installation will only be in operation in 2012?

When you apply for a feed-in approval, you should be realistic in forecasting the operation of your renewable energy installation. Most of these installations must be able to commission within 36 months but note that renewable energy installations utilising biogas can be commissioned in a shorter period of 24 months.

  Last updated : 2 SEPTEMBER 2011
 
 
How can I be certain of my feed-in tariff commencement date when it depends on the distribution licensee’s availability? How can SEDA Malaysia facilitate?

Under the Renewable Energy Act 2011, the distribution licensee is obligated to interconnect and to purchase renewable energy. Failure to do so would entail a penalty levied on the distribution licensee. Specific time-frames will be set for all parties involved and client charters will be established. Contractors/service providers and feed-in approval holders are however reminded to set realistic target dates for the feed-in tariff commencement date.

  Last updated : 26 OGOS 2011
 
 
What will happen to the APVSP once SEDA Malaysia is established?

The APVSP scheme has ceased since the MBIPV Project closed on the 31st May 2011. SEDA Malaysia will introduce a directory where service providers can list their companies, products and services. A small annual fee will be imposed on those wishing to list their companies in this directory.

  Last updated : 2 SEPTEMBER 2011
 
 
How will the biomass industry address the feedstock supply issue?

Plantation owner, millers and feed-in approval holders are encouraged to work towards an agreeable solution should the investment be financially viable.

  Last updated : 26 OGOS 2011
 
 
How does SEDA address the issue of the contending use of feedstock which will lead to price competition between feed-in approval holders and other users of the feedstock?

Feedstock should expand and include biomass waste which can be converted into energy. The use of waste provides another avenue for RE developers to generate revenue via producing green energy.

  Last updated : 26 OGOS 2011
 
 
How does SEDA address the issue of supply security of feedstock, if feedstock should be imported?

In the first place, for FiT, imported feedstock will not be allowed as the definition of RE requires that the feedstock be indigenous in nature. Malaysia will not consider imported feedstock as the principle is to fully utilise the indigenous sources and promote energy autonomy. In addition, Malaysia has a commitment to reduce 40% of GHG emission intensity in the COP 15 and this may not be achievable if we rely on imported fuel sources.

  Last updated : 26 OGOS 2011
 
 
If a co-generation plant uses renewable resources, will they be eligible to receive feed-in tariffs?

Yes, provided that the section or portion of the co-generation plant utilising renewable resources is delineated and renewable energy is metered separately from other electricity that is generated. The fuel will need to be a renewable resource permitted under the Renewable Energy Act 2011.

The RE Act imposes high penalties for the dishonest use of non-renewable resources by feed-in approval holders to generate electricity.

  Last updated : 26 OGOS 2011
 
 
What if two renewable resources are used together, biomass and biogas?

For renewable energy installations utilizing more than one type of renewable resource and connected to a single meter, the rule is that the lowest basic feed-in tariff rate will apply for the total combined installed capacity. The effective period will be calculated based on the shortest effective period among the types of renewable resources utilized.

If the feed-in approval holder uses multiple renewable resources but the renewable energy installation is connected to separate meters, the feed-in tariff rates will be calculated based on separate feed-in tariff rates, installed capacities and effective periods.

If an existing feed-in approval holder plans to increase the capacity of his/her renewable energy installation in the following year or any time in the future and wishes to maintain the feed-in tariff rates for the existing capacity, the feed-in approval holder is required to apply for a new feed-in approval, sign a separate renewable energy power purchase agreement and install a separate meter for the expansion. The existing feed-in approval, renewable energy power purchase agreement and meter shall remain applicable for the existing capacity.

If an existing feed-in approval holder plans to increase its capacity in the future but does not wish to have a separate meter or interconnection point for the expansion, the lowest feed-in tariff rate and the shortest effective period will apply for the new total installed capacity i.e. based on the feed-in tariff rate established for the additional capacity. In this case the existing feed-in approval holder will have to surrender its previous renewable energy power purchase agreement and feed-in approval upon receiving the approval of the new feed-in tariff rate.

  Last updated : 26 OGOS 2011
 
 
Do you allow the internal utilisation of renewable energy?

Yes, but SEDA Malaysia will only allow this for renewable energy installations connected at low voltage (230 V, ≤ 10 kW and 400V, > 10kW ≤ 425 kW). This is known as indirect connection. Detailed conditions will be made available before the FiT System is launched.

  Last updated : 26 OGOS 2011
 
 
Is there a possibility for (retail) electricity tariff to increase beyond the contracted FiT rates before expiry of REPPA?

Yes. This is an event that is described as the attainment of ‘grid parity’ in the Renewable Energy Act 2011. In that instance, feed-in approval holders will be paid the displaced cost.

  Last updated : 26 OGOS 2011
 
 
What does ‘building’, ‘building structure’ and ‘building material’ mean in the context of renewable energy installations utilising solar PV as a renewable resource?

‘Installation in building’ or ‘building structure’ shall mean a roofed building structure which can be independently used and entered by humans and are primarily designed for the purpose of protecting humans, animals or objects. ‘Building material’ means there are no secondary building material beneath a solar PV module serving the same function. Please refer to the guidelines for the eligibility criteria accessible here ”FiT Guidelines”.

  Last updated : 2 SEPTEMBER 2011
 
 
Which tariff will apply for normal houses which are then installed with a renewable energy installation utilising solar PV as a renewable resource on their roofs?

If you install a renewable energy installation on top of an existing roof, you will be entitled to the basic feed-in tariff rate, the bonus feed-in tariff rate for use as installations in buildings or building structures but not the bonus feed-in tariff under ‘building material’. To be entitled to this additional bonus feed-in tariff rate, the renewable energy installation must itself be part of the roof (i.e. with roof tiles removed and replaced with PV modules).

  Last updated : 26 OGOS 2011
 
 
Who bears the cost for interconnection for under the FiT System?

Feed-in approval holders will bear the cost of interconnection but distribution licensees will bear the cost to upgrade the network (if necessary).

  Last updated : 26 OGOS 2011
 
 
Who will bear the costs of interconnection if I were to develop a solar farm in a developing area where there are no substations?

The feed-in approval holder will have to bear all costs (including costs for power systems studies, if necessary) up to the point of interconnection. Therefore, the feed-in approval holder will have to find the nearest interconnection point to the distribution licensee’ network and conduct a proper financial evaluation before submitting his/her application for feed-in aproval. The distribution licensee will be responsible for reinforcing the network (if required).

  Last updated : 2 SEPTEMBER 2011
 
 
Will there be a requirement for Power Systems Studies (PSS)?

Yes, PSS will be a mandatory requirement for all medium voltage renewable energy installations (i.e. with an installed capacity of more than180 kW). For more details on the requirements for PSS please refer to the Power Systems Study Guidelines accessible here “Power Systems Study Guideline”

  Last updated : 2 SEPTEMBER 2011
 
 
Will there be a minimum energy generation performance requirement under the renewable energy power purchase agreements?

Yes, under the renewable energy power purchase agreements, feed-in approval holders must provide 70% of their declared energy yield based on an average annual output. Feed-in approval holders who fail to comply will need to pay liquidated damages to the relevant distribution licensee. This requirement is not applicable to renewable energy installations with net export capacities of 10MW and below.

  Last updated : 26 OGOS 2011
 
 
What is a REPPA and how do I obtain it?

REPPA stands for a renewable energy power purchase agreement which is a legal contract to be entered into between a feed-in approval holder and a distribution licensee (eg. Tenaga Nasional Berhad, Sabah Electricity Sdn. Bhd., etc.). Interested parties can download a copy of the relevant standardised renewable energy power purchase agreements from the following link“Sample of standardised REPPA”.

  Last updated : 26 OGOS 2011
 
 
Will the feed-in tariff rate given to me under the renewable energy power purchase agreement and my feed-in approval be reduced in later years?

No, your feed-in tariff rate is fixed for the next 16 or 21 years (depending on the renewable resource that is utilised) until such time as grid parity occurs. This is to provide some form of security for your investment. The main objective of the degression is to encourage reductions in cost and increases in efficiency as well as to achieve grid parity at a faster rate.

  Last updated : 26 OGOS 2011
 
 
Will the standard form renewable energy power purchase agreement indicate the effective period?

The effective period of a renewable energy power purchase agreement is linked to the effective period granted under a feed-in approval.

  Last updated : 26 OGOS 2011
 
 
If the renewable resources utilised are different, would the renewable energy power purchase agreements be different too?

The type of renewable energy power purchase agreement applicable to each feed-approval holder would depend on:

(i)         the renewable resource utilised by; and 

(ii)        the proposed installed capacity of the renewable energy installation to be installed.

 

There would therefore be different renewable energy power purchase agreements in different circumstances.

  Last updated : 26 OGOS 2011
 
 
What happens when my renewable energy power purchase agreement under this FiT System expires?

Upon the expiry of the effective period of a renewable energy power purchase agreement or feed-in appoval, feed-in approval holders may apply for new feed-in approvals. However, if grid parity has been achieved, FiAHs will have to negotiate directly with DLs.

  Last updated : 26 OGOS 2011
 
 
What happens if I decide to shift or sell my house? Can my renewable energy power purchase agreement and feed-in approval be transferred to the new owners?

Yes, renewable energy power purchase agreements and feed-in approvals can be transferred to new house owners with prior consent from SEDA Malaysia.

  Last updated : 26 OGOS 2011
 
 
Under the SREP programme, there are a number of licences that have been issued that remain inactive as developers have not pursued their projects. Will these licences be revoked once the FiT System comes into effect?

The Ministry and the Energy Commission have been revisiting current license holders. Those who are in progress can continue with their licences but those who cannot demonstrate progress will have their license revoked. Once a licensee’s licence is revoked, he/she will need to apply for a new one if he/she is interested to participate in the FiT System.

  Last updated : 26 OGOS 2011
 
 
You have mentioned Energy Commission licensing. What licensing is this? Is it licensing for solar power generation or licensing to sell power back to the grid?

All power generators 5 kW and above are required to have power generation licenses from the Energy Commission where the fees are chargeable  at RM 1.5 per kW. For PV, the power generation license fees are payable for capacities of over 24 kW (for 1 phase) and above 72 kW (for 3 phase).

  Last updated : 26 OGOS 2011
 
 
Is TNB supportive of the FiT System?

Yes, TNB is supportive of the Government’s initiative. Distribution licensees like TNB are also legally bound under the Renewable Energy Act 2011 to not only purchase renewable energy but also prioritise such purchases over electricity generated using non-renewable resources.

  Last updated : 26 OGOS 2011
 
 
What if the distribution licensee (e.g. Tenaga Nasional Berhad, Sabah Electricity Sdn. Bhd.) refuses to purchase all of my renewable energy?

Distribution licensees like TNB are legally bound under the Renewable Energy Act 2011 to not only purchase renewable energy but also prioritise such purchases over electricity generated using non-renewable resources. Failure to purchase will result in penalties levied on the distribution licensee.

  Last updated : 26 OGOS 2011
 
 
Will state authorities grant automatic approvals to feed-in approval holder once a feed-in approval is granted by SEDA Malaysia? Will the Federal Government relax its rules on this feed-in approval holders have incurred additional costs?

The Renewable Enegy Act 2011 is federal legislation and does not apply to issues pertaining to the State. However, SEDA Malaysia will play a role as a one stop centre that can liaise between feed-in approval holders RE developer and State Government to expedite the process.

  Last updated : 26 OGOS 2011
 
 
What happens if the state authority declines the application when I have invested in the renewable energy installation?

When applying for a feed-in approval, an eligible producer is required to submit to SEDA Malaysia information on local authority requirements and the status of the feed-in approval holder’s compliance with such requirements. Eligible producers are required to do their own preliminary enquiries on local authority requirements before submitting their applications for feed-in approvals. SEDA Malaysia may look into this matter to expedite processes but feed-in approval holders are fully responsible in obtaining all the necessary approvals from the state authorities.

  Last updated : 2 SEPTEMBER 2011
 
 
Will there be any special financing packages available to facilitate capital investment by individuals, companies and other entities? If so, please provide the details.

The Ministry together with SEDA Malaysia are in the process of engaging banks in providing attractive financing packages for projects under the FiT System. Details will be made available on SEDA’s website once this is formalised. However, prospective applicants can choose to use their own current banks to finance their investment in renewable energy installations under the FiT System.

  Last updated : 26 OGOS 2011
 
 
Will individuals receive incentives or allowances for the installation of related devices? How will the Government regulate this?

The incentive for individuals to install renewable energy installations liein the feed-in tariff rate. As for other incentives, the Government has been very supportive of renewable energy by providing fiscal incentives in yearly budgets.

Fiscal incentives are available for companies andthird party exemptions on equipment (e.g. solar PV and solar heating) are givento distributors or importers. This will lead to a reduction in the system price via exemption of sales tax or import duty.

  Last updated : 26 OGOS 2011
 
 
I have received grants for capital investment to construct a biogas plant. Will I still be eligible for FiT?

All eligible producers will be required to declare all incentives received when filing their online applications. Eligibility for feed-in tariff rates for those already enjoying incentives will be reviewed on a case by case basis.

  Last updated : 26 OGOS 2011
 
 
Would other government fiscal incentives (such as those announced under Budgets 2008 & 2009 – double tax allowances, waiver of import duty & sales tax) still be applicable to feed-in approval holders?

Government fiscal incentives such as claims on investment tax allowance and waiver of import duty and sales tax will still be applicable to feed-in approval holders. Those fiscal incentives will continue till 31 December 2015 for investment tax allowance and 31st December 2012 for waiver of import duty and sales tax as presented by Y.B Prime Minister in the National Budget Speech for the year 2011. The fiscal benefits for GBI certified buildings will continue until 31 December 2014.

  Last updated : 26 OGOS 2011
 
 
If a commercial entity applies to MIDA for double tax relief this year but commissions a renewable energy installation utilising solar PV as a renewable resource in the middle of next year, would the entity be awarded the tax exemption?

Double tax reliefis currently applicable for all applications made before 31st December 2015. Successful applicants are given a 1-year period for the implementation of the project. Hence if your application is submitted before that date you can implement the project later but within the allowed time frame.

  Last updated : 2 SEPTEMBER 2011
 
 
Why do i get blank screen after login to e-FiT using Internet Explorer?

Scenarios :-

  • Blank screen appeared for the first time login;
  • After logging in, it goes to a blank page and hangs;
  • After changing the password, i used the new password and logged in. Then it went to the next page but the page was empty;
  • I managed to change my password for the first time logged in, yesterday. I tried on today and still appear the blank white screen

Answer :-
Websites that were designed for earlier versions of Internet Explorer might not display correctly in the IE8 (and above) version included in Windows 7. When you turn on Compatibility View, the webpage you're viewing, as well as any other webpages within the website's domain, will be displayed as if you were using an earlier version of Internet Explorer. This link will show you how to remove (turn off) websites to be displayed in Compatibility View.
http://windows.microsoft.com/en-US/windows7/How-to-use-Compatibility-View-in-Internet-Explorer-9

  Last updated : 15 NOVEMBER 2011
 
 
Do FiAHs need to impose Goods and Services Tax (GST) to Distribution Licensees (DLs) from 1 April 2015?

Only FiAHs registered for GST with the Royal Customs Department (Customs) can impose GST to DLs. FiAHs receiving total taxable supplies exceeding RM500, 000 in a year are required to register for GST while the registration of GST for FiAHs receiving total taxable supplies not more than RM 500,000 in a year is voluntary.

  Last updated : 23 MAC 2015
 
 
SEDA Malaysia has uploaded a revised REPPA for PV installations having a rated capacity of up to 1MW and also a supplementary agreement for GST purposes in the website. What will be the impact to the existing REPPA?

Revisions were only made to the REPPA Form PV1 (PV installation having a rated capacity of up to 1MW). FiAHs who have signed the existing REPPA Form PV1can proceed with the old REPPA but are required to sign the supplementary agreement only if they have registered for GST. For FiAHs who haven’t yet registered for GST, they can still sign the supplementary agreement if they foresee their business expanding in the future that requires them to register for GST. For FiAHs that have not signed the REPPA Form PV1with the DL, they are required to use the revised REPPA Form PV1. No supplementary agreement is required if they are using the revised REPPA Form PV1.

  Last updated : 23 MAC 2015
 
 
Does the monthly payment from DL include GST?

The monthly payment from DL will include GST only for FiAH who registered for GST as FiAHs who are not registered for GST are not permitted to impose and collect GST.

  Last updated : 23 MAC 2015
 
 
For GST purposes, do FiAHs need to sign a new REPPA?

Only FiAHs that have registered for GST and signed REPPA Form PV1 prior to the revised REPPA Form PV1 being uploaded into SEDA Malaysia’s website on 12th March 2015 are required to sign the supplementary agreement. FiAHs under this rated installed capacity category who are not registered for GST can still proceed with the REPPA Form PV1 prior to the revision. Moving forward, newly approved FiAHs under this rated installed capacity category will have to use the revised REPPA Form PV1.

  Last updated : 23 MAC 2015
 
 
How do we want to inform the DL our GST number? Is there is any form provided by SEDA?

You are required to inform your DL of your GST number and the official letter issued by SEDA on this matter can be referred from https://efit.seda.gov.my/?omaneg=00010100000001010101000100001000000010100001000110&id=2230. The official forms can be obtained directly from the respective DLs. Please contact your DL for the official form.

  Last updated : 23 MAC 2015
 
 
What is the overview of GST impact on FiT administration?

Below is the overview of GST impact on FiT administration.

 

GST IMPACT ON FiT ADMINISTRATION

NO.

ITEMS

GST

NO GST

1

1.6% surcharge on electricity bills as contribution to Renewable Energy Fund (Allocation from Electricity Tariff)

 

2

Recovery of Moneys by Distribution Licensees

 

3

Payment of Administrative Fee to Distribution Licensees

 

4

Payment of Administrative Fee to SEDA

 

 
  Last updated : 23 MAC 2015
 
 
What is the overview of GST impact on REPPA

Below is the overview of the GST impact on REPPA

 

GST IMPACT ON REPPA

NO.

ITEMS

REGISTERED FOR GST

NON-REGISTERED

FOR  GST

1

Transitional progress of signing REPPA 

Sign Revised REPPA Form PV1

Sign Old REPPA Form PV1

2

Already signed a REPPA

Sign supplementary agreement

-

3

Have not sign any REPPA yet

Sign Revised REPPA Form PV1

 
  Last updated : 23 MAC 2015
 
 
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