The Sustainable Energy Development Authority (SEDA) is in discussion with financial institutions and the government to set up a funding mechanism for houseowners wanting rooftop solar power generation in the country.
When asked to comment on a timeframe, SEDA chief executive officer Badriyah Abdul Malek said that some obstacles need to be addressed first before deciding on the timeframe.
For instance, she explained, one of the stumbling blocks to be ironed out is the risk involved in financing the setting up of rooftop solar panels for houseowners.
“We have spoken to the banks who are now quite active in commercial plans funding. But they are reserved because if someone doesn’t pay, how do they (the banks) repossess the roof?” she said at a SEDA press briefing in Putrajaya last Friday.
From left: Badriyah, Dr Fong and SEDA chief operating officer Ali Askar Sher Mohamad at the press conference (pic: Shahrin Yahya)
To overcome this challenge, it is learned that some banks are proposing that the first few years on the returns from feed-in-tariff (FiT) be accrued to the bank instead. This will ensure that once the houseowners have completed their financing obligations they will start receiving the returns for the power generated, she explained.
SEDA is currently exploring this approach with the likes of Bank Simpanan Nasional Bhd, Malayan Banking Bhd, CIMB Group Holdings Bhd and Bank Kerjasama Rakyat Malaysia Bhd (Bank Rakyat), she told The Malaysian Reserve on the sidelines of the press conference.
“But we need to consult Bank Negara Malaysia (BNM) first,” she cautioned, in reference to the mechanism of financing.
SEDA is now in talks with BNM to kickstart discussions and is also in talks with banks in coming up with a mechanism, she said.
Earlier, at the press conference, SEDA chairman Tan Sri Dr Fong Chan Onn said that the agency will be opening the quota for solar power generation for 2,000 households in August.
Badriyah said this is part of a wider Economic Transformation Programme (ETP) initiative under the electric and electronic Entry Point Project (EPP) announced by Prime Minister Datuk Seri Mohd Najib Razak in May, in which he called for 100,000 houseowners to set up rooftop solar panels in encouraging the use of renewable energy in the country.
She said the Ministry of Energy, Green Energy and Water has asked SEDA to lead the initiative as it is an implementing agency for renewable energy initiatives, but it will work in close consultation with the government and the Performance Management and Delivery Unit (Pemandu), the agency responsible for spearheading the ETP.
“We have to see how to make the project people friendly and this includes access to financing as well,” she said.
At the press conference, Dr Fong said that homeowners who install a solar panel system on their property will also be able to recoup investment by selling energy generated to Tenaga Nasional Bhd.
“A household can earn an average of RM500 a month over a 21-year period from the sale of solar energy.”
He added that cost of installation could range from RM10,000 to RM12,000 per kilowatt.
He said homeowners can earn an average of RM500 a month based on energy produced on a 4kW solar panel system.
Badriyah added that so far, RM13,000 has been paid to a portion of houseowners generating solar energy on rooftops out of 320 that have applied since the quota was opened for application. The FiT commenced on Dec 1, 2011.