RE PLAYERS WANT A FLOOR PRICE FOR SOLAR TARIFF IN BUDGET 2022

By Nurunnasihah Ahmad Rashid

KUALA LUMPUR, Oct 14  – Renewable energy (RE) industry players has asked the government to step to set a floor price for solar tariff that is economically viable for all parties.

This is to ensure that the projects are bankable to avoid any construction halts when solar developers fail to achieve a financial close, Solarvest Holdings Bhd group chief executive officer Davis Chong Chun Shiong said.

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“Furthermore, a floor price will also enhance the attractiveness of solar development projects and keep profit at a sustainable level which could spur greater investment interest for the long term,” he told Bernama.

Chong said under the Large-Scale Solar 3 (LSS3), solar tariff rates were very competitive, thus, causing delay in certain projects due to financing issues.

Solarvest also hopes the government will be able to reassess the RE quota allocation under the power generation plan.

“While we are thankful for the recently improved RE target from the previous 20 per cent by 2025 to the current 31 per cent by 2025 and 40 per cent by 2035, we still feel that the goals set are too modest, especially given the recent commitment for Malaysia to achieve carbon-neutral status by 2050.

“Moreover, because the current target also includes large hydrogen plants in the mix, we could attain the 31 per cent and 40 per cent targets easily.

“If we were to exclude the large hydro segment from the equation, there is only about 1.1 Gigawatt (GW) of capacity left for solar energy in particular out of the 31 per cent allocated,” Chong added.

Hence, he said the country could very easily fulfil this by rolling out another one or two LSS programmes.

“Thus, we hope the government will consider increasing the quota for the solar sector to somewhere around 8.0 GW by 2025 and 20 GW by 2035.

“Additionally, we have also witnessed an overwhelming response for the 300 Megawatts (MW) Net Offset Virtual Aggregation (NOVA) quota, which was fully allocated in July 2021 after only three to four months from its commencement,” he said.

Therefore, this demonstrates that demand is extremely robust, and the current allocation is not sufficient,  Chong said.

“We hope the quota will be increased to 3,000 MW to allow for more participation, especially among multinational companies based in Malaysia.

“Lastly, we wish to see incentives for solar energy adoption among the residential segment through the offering of tax rebates of up to RM10,000 to homeowners who install rooftop solar panels,” he said.

Meanwhile, Itramas Corporation Sdn Bhd hopes the government will provide an allocation and a development budget to help grow the RE and smart city industries locally, as these sectors are currently gaining traction globally.

Group managing director/chief executive officer Lee Choo Boo said creating a sizeable local market, as well as providing proper incentives, will enable players like Itramas Corporation to develop and go into research and development (R&D) to compete globally.

Besides, he said grants should be provided to local companies at least until middle of next year to subsidise labour cost.

“The policy should be to help local companies, especially small and medium enterprises (SMEs) and the private sector maintains their workforce, as well as invest in training to move towards high-value jobs.

“It will take a little while for the economy to pick up, hence, bank moratorium which has been reporting huge profits during the pandemic, should also be extended to the middle of next year.

“Consumption has gone down and is still going down, while there are currently no major infrastructure projects in the country and foreign direct investment has fallen,” he told Bernama.

He said the focus should be to create economic activities in areas that are consistent with global trends such as green technology and climate change, smart cities, fourth industrial revolution industries, and the health sector.

“Local players in these sectors should be supported (in Budget 2022) so that they can have economy of scale, maintain their workforce, skill up and then go for the export market,” he added.

Lee said the government needs to target the regional and international markets eventually to drive growth.

-- BERNAMA