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Malaysia BIPV Project

UNDP/GEF Building-Integrated Photovoltaic Project (Malaysia)

[ tags: Asia , Malaysia , Grant , Other , Mitigation , Multilateral , Private sector , Energy , Infrastructures , Low-Carbon , Renewable Energy , Urban , Grant , Renewable Energy , Other , Renewable Energy , Other , Renewable Energy , Other , Renewable Energy , Grant , Renewable Energy , Grant , Renewable Energy ]
Snapshot
Financing Types Stakeholders Amount Share Sector
GrantMalaysian Government$8,241,71333%Renewable Energy
OtherMalaysian Government (in-kind)$3,841,13215%Renewable Energy
OtherPrivate sector equipment & construction discounts$4,385,27318%Renewable Energy
OtherCustomers via BIPV system auctions$1,161,7975%Renewable Energy
GrantPrivate sector equipment companies$2,629,82511%Renewable Energy
GrantUNDP/GEF$4,699,42019%Renewable Energy
Total:$25,223,848
Project Summary

The principal objective of this project is to reduce the long-term cost of BIPV technology within the Malaysian market, which will subsequently lead to sustainable and widespread building-integrated photovoltaic (BIPV) technology applications that will avoid greenhouse gases (GHG) emissions from the country’s electricity sector. The project will establish an enabling environment for a long-term market development and set a target for a follow-up BIPV programme in the 10th Malaysia Plan.

The project will achieve its objectives by: developing and implementing strong financing mechanisms and solid institutional and policy frameworks; building capacity and an extensive education campaign to generate awareness and improve local competency; introducing standards and guidelines; developing the BIPV market; and upgrading the local industry towards local manufacturing. The implemented project will induce an increase of BIPV application of about 330% with a cost reduction of 20% by the year 2010.

Financing

The project proponent was able to leverage a significant amount of private sector investment for the project, in both equipment and construction grants from international solar firms and domestic construction companies. In addition, the Malaysian government made substantial investments in both cash grants and inkind contributions for the maintenance and monitoring of the programme.

The project also involves an innovative solar PV auction system known as the Suria 1000. Every year starting from 2007, a limited number of grid-connected solar PV systems are offered to the public on a bidding (auction) concept, through local mass media and administered by the project team. However, there is a reserve bidding price (minimum price) for the public to bid, where the reserve bidding price will then be increased in each subsequent call for bidding. This facilitates the creation of sustainable BIPV market upon the completion of the programme.

Successful bidders then install the PV system supplied by the participated PV service providers as Building Integrated PV (BIPV) at their premises. Premises can be existing or new houses/buildings. The costs of the PV systems are borne by the successful bidders at the bidding price and supplemented by the project.

Lessons Learned

The project is under implementation through 2010.  Lessons learned will be compiled at the completion of the project.

The project is under implementation through 2010.  Best practices will be compiled at the completion of the project.

The project includes the development of appropriate, proactive and integrated plans and policies that create a conducive environment for widespread adoption of BIPV to exploit solar energy potential in Malaysia:

Government incentives: RE promotion in Malaysia is based on the Small Renewable Energy Power (SREP) programme. Projects developed under the SREP programme are eligible for Pioneer Status (PS) or Investment Tax Allowance (ITA). The government has expanded the scope of RE to include PV generated power and has extended the range of fiscal incentives to promote the adoption of BIPV. Businesses that invest in BIPV for their own use can benefit from Capital Allowance (CA) as well as ITA. This is equivalent to a double tax deduction. The corporate tax rate is 26% for 2008 and 25% for 2009 and beyond. In addition, the main PV system products are also eligible for exemption from paying import duty and sales tax as elaborated below. This provision helps to reduce the cost of PV systems for prospective nonbusiness investors.

Grid connection: TNB (national utility company) has agreed to permit connection of PV installations under the MBIPV project to its low voltage (LV) distribution network with the proviso that the PV capacity installed (kWp) does not exceed the consumer’s maximum demand in kW. Approval for the grid connection automatically includes approval for net-metering of the electricity consumed by the user and the electricity generated by the PV installation and fed into the TNB grid through the grid connection.

Feed-in-tariff: For energy in the form of PV-generated electricity, TNB has agreed to buy back the PV generated electricity under a net-metering concept, whereby the rate TNB pays for the PV generated electricity is the same as it charges consumers. This feed-in-tariff is an enhanced rate paid by the utility for generated electricity it purchases from renewable energy generators. Under the net-metering concept, the reconciliation for the PV generated electricity is “contra” against the highest block rate of the tariff in question. Such a plan incentivizes consumers to install PV systems in order to benefit from producing renewable energy.

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