Malaysians who live in big cities are familiar with barely breathable air caused by
pollution. The annual average concentration of particulate matter (PM)
2.5 reached 15.24 micrograms per cubic meter in 2021, three times the World
Health Organization (WHO) recommended limit. The CO2 emissions in
Malaysia were among the highest in the Asia-Pacific region, mainly caused by oil,
gas, and coal consumption.
Malaysia has traditionally depended on conventional power generation,
including natural gas, coal, and hydropower. As a signatory nation to the
Conference of Parties to the United Nations Framework Convention on
Climate Change, Malaysia has pledged to reduce its greenhouse gas
emission intensity of GDP by up to 45 percent by 2030. Malaysia
government has committed to achieve net zero greenhouse gas emissions
as early as 2050 by implementing clean, sustainable, and renewable
energy (RE). Malaysia has committed to increase renewable energy
composition to 70 percent of the total generation capacity by 2050. As part
of the process, Malaysia is expected to expand renewable capacity from 6
to 14GW.
Malaysia consumption renewable energy
In 2022, the consumption of renewable energy in Malaysia was
around 0.09 exajoules, a slight increase compared to 0.08
exajoules in the previous year. The consumption of renewable
energy in the country has not had a significant increase in the past
decade
Renewable Energy in Malaysia
Malaysia as a developing country demands more energy than developed countries for its rapid economic growth. Posing an energy crisis to long-term viability and producing vast amount of carbon emissions to the environment. The primary energy source used in Malaysia’s power sector for generating electricity are fossil fuels. Fossil fuels cannot be sustained in the near future due to environmental consequences and resource depletion. Malaysia's population and economy are rapidly expanding, necessitating the exploration of alternative energy sources to meet the country's population and commercial energy demands. Renewable and alternative energy consumption in Malaysia only covers 10% of the total capacity of energy usage.
There are two (2) major types of renewable natural resources currently consumed in Malaysia;
a.Hydropower
b.Solar energy.
These average from 5-6% of the country’s energy consumption source in the past 5 years.
c.Other lists of renewable natural sources in Malaysia come from geothermal, biomass and waste
though this makes up less than 1% of the pie.
By 2025, the Malaysian government is targeting a 31% of the total installed capacity of sustainable energy, as compared to the current 23%.
Malaysia Approach towards Renewable Energy
Incentive for Company
Incentive, Tax allowance for Individual
1.Rakyat Incentive Scheme (‘SolaRIS’)
Malaysia’s Ministry of Energy Transition and Water Transformation introducing the Solar for Rakyat Incentive Scheme (‘SolaRIS’)1. This scheme is a special incentive for domestic consumers that is aimed at encouraging the installation of solar photovoltaic systems under the Net Energy Metering (‘NEM’) programme.
Under SolaRIS, a rebate of RM1,000/kWac (up to a maximum of RM4,000) will be offered to new participants in the NEM Rakyat programme that submit their applications for quotas to the Sustainable Energy Development Authority on and after 1 April 2024.
The rebate will be paid after the installation and commencement of operations of the solar photovoltaic system. Such payment will be deposited in the nominated local bank account of the consumer, subject to the applicable terms and conditions for claiming a rebate under SolaRIS.
2.New tiered pricing mechanism with lower rates for the Green Electricity Tariff (GET)
The Ministry of Energy Transition and Water Transformation of Malaysia (PETRA) has launched a new tiered pricing mechanism with lower rates for the Green Electricity Tariff (GET) program set to a quota of 6,600 GWh.
According to a statement from PETRA, the new rates are set at 10 sen per kWh for domestic and non-domestic low-voltage users, and 20 sen per kWh for non-domestic medium and high-voltage users. In 2023, the GET rate was higher at 21.8 sen per kWh.
GET is an initiative by Malaysian government to provide green electricity to customers of state-controlled Tenaga Nasional Bhd who intend to reduce carbon footprint.
The program has supplied 6,762 GWh of green electricity to 2,461 users across various categories since introduced in 2021, and helped to meet environmental, social and governance commitments, especially in terms of greenhouse gas emissions avoidance, according to PETRA.
Under the initiative, subscribers will receive a Malaysia Renewable Energy Certificate to prove that the electricity consumed was from renewables, in compliance with industry practices aimed at reducing carbon footprint.
Those do not subscribe to GET will be charged under the ICPT, which adjusts electricity tariffs based on changes in fuel prices for power generation. During the first half of 2024, those consuming over 1,500 kWh a month will pay an ICPT surcharge of 10 sen per kWh.
Small and medium enterprises, categorized as non-domestic consumers in the low-voltage category, benefit from an ICPT surcharge of 3.7 sen per kWh. Meanwhile, commercial and industrial users in the medium- and high-voltage categories face a charge of 17 sen per kWh.
3.Tax exemptions on Electric Vehicles
Malaysian government has offered tax breaks for EVs to encourage more people to use this environmentally beneficial method of transportation as more people transition to electric vehicles for their transportation needs.
Malaysia Government also provide tax exemptions of up to RM2,500 for those spending on EV charger rental, purchase, and installation; and for companies, this applies to the tax deductions on EV rental. Both of these incentives will be extended until 2027.
In 2024 assessment year, The government is also offering up to RM2,400 in tax rebates to encourage individuals to adopt electric-powered motorcycle however it is only available for individuals earning no more than RM120,000 annually
