Future Direction of Solar PV Industry

8/8/2019 Future Direction of Solar PV Industry

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4 August 2, 2009

MEMORANDUM

TO: Y.B. DATUK PETER CHIN FAH KUI,

MINISTER OF ENERGY, GREEN TECHNOLOGY AND WATER.

FROM: PERSATUAN INDUSTRI FOTOVOLTAIK MALAYSIA

( MALAYSIA PHOTOVOLTAIC INDUSTRY ASSOCIATION OR

MPIA)

Subject: FUTURE DIRECTION OF SOLAR PV INDUSTRY INMALAYSIA.

Y.B DATUK,

1.0 First of all, as the President of MPIA and on behalf of its members, I would liketo extend and express our heartfelt congratulations for your pioneering effort in

pursuing and coming up with a National Green Technology Policy ( NGTP),

successfully launched on 24th July 2009 by the our Honorable Prime MinisterY.A.B Dato Seri Mohd Najib bin Tun Hj Abdul Razak.

2.0 That momentous event and the firm commitment made mark a new era and a newmilestone set for the country and its citizens to embrace that will usher Malaysia

into a balanced and sustainable development by 2020 and beyond. We in the

MPIA believe the launching of NGTP is a very timely and the noble effort by

Y.B. Datuk, taken at the time when the world is now grappling with severalcritical issues affecting humanity, notably, the serious environmental problems

caused by global warming.

3.0 To respond and supplement this noble and culminating effort by the government

in spearheading the full realization of the NGTP in the coming and challenging

years ahead, we the MPIA and its about forty members, representing a cross

section of industries multinational PV and cables manufacturers, PV serviceproviders, corporate companies, private and public educational institutions -

most of whom have been involved directly and indirectly in solar PV activities in

Malaysia in the last decades, would like to extend our helping hands to thegovernment to ensure its effective and successful implementation of the NGTP.


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4.0 With all humility, here are our industrys wish list and key ideas for the kindconsideration of Y.B. Datuk:-

4.1 Post MBIPV and SURIA 1000 The Implementation of Feed In

Tariff Program (FIT).

In line with the stated objectives of National Green Technology Policy

(NGTP), to accelerate sustainable growth of Malaysias PV industry andthe needs to supplement the growing electricity demand in Malaysia, we

call upon for the speedy implementation of Feed-In-Tariff program (FIT).

Worldwide, the FIT has proven to be very successful mechanism in

bolstering PV industry, creating huge job opportunities and provides neweconomic growth for the implementing countries.

A new report released by National Renewable Energy Laboratory

(NREL), USA in May 2009, concluded that a well designed FIT could

be effectively used to meet Green Policy goals, job creation, economic

development and meeting national renewable energy targets. Elsewhere inEurope, FIT has been so successful that it has now become a benchmark

for other countries to follow.

It is gratifying for us to know that the KTTHW has finalized the

appointment of a legal consultant company to prepare a comprehensive

draft legal document for a new all-encompassing Renewable Energy Law,FIT included, which would be table in the Parliament by years end. This

is a very encouraging development for the solar PV industry.

We hope that the FIT could be implemented as early in 2011, under the

next 10th Malaysia Plan, as announced by the Y.A.B Dato Sri Mohd.

Najib bin Tun Hj Abdul Razak in his speech during the launching of the

National Green Technology Policy.

4.2 A Proposal for an Establishment of RM 1.0 Billion Solar Initiative

Fund (SIF).

We foresee a possible long lead time period in enacting RE Law in

Parliament, and with the impending end of MBIPVs SURIA 1000program in 2010 and with no new indicators in sight as to where the PV

industry is heading, the PV industry players are now very concerned

about possible contraction in numbers of new solar PV projects especially


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grid connected solar PV projects, that might force many young andentrepreneurial companies to close its business. This scenario offers a

rather uncertain future for the Malaysias PV industry.

To address this impending problem, the MPIA proposes the setting up of

Solar Initiative Fund with initial allocation ofRM 1.0 billion. This

allocation could be included as an extension of National Economic

Stimulus Package, initially presented by our Honorable Prime Ministerand approved by the Parliament early this year.

This fund, to be parked in financial institutions, is available either as long

term loan (not less than 15 years) loan or a subsidy to individuals andcommercial companies who wish or plan to own and install small scale PV

system ( from 3 to 20 KW peak capacity) covering both grid connected,building integrated PV system on their existing or new buildings roof tops

for their own use and also for off grid applications as well, such as small

remote resort operators who have been struggling and hard hit by

fluctuating oil prices and high maintenance cost s in as many years.

The detailed financial scheme, whether in the form of subsidy, long term

loan or combination of both should be worked out by MOF and KTTHWwith participation and inputs from MPIA.

Besides providing a new lifeline for our nascent solar PV industry, theavailability of the SIF would result in an additional 40 MW of roof

mounted, grid connected and off-grid solar PV systems that could be

installed, boosting our declared commitments towards sustainabledevelopment as clearly envisaged in NGTP.

4.3 Implementation of Multi-Megawatts of Grid-connected solar PV

systems for Peak Load Leveling.

MPIA believes that Malaysia could achieve multi-megawatts installations

which can be implemented in the same way as as Independent PowerProducer (IPP) does but with one main objective i.e using these multi

megawatts PV power stations as Peak Load leveling or Peak Demand

Shaving of national power grids.


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With this multi megawatt PV capacity connected to TNB grid, it can

easily meet national peak demand which normally occurs at around noon

during which PV power output is at its highest. This will save TNBsbillions of Ringgit annually as a result of not having to run highly

subsidized gas turbines during the peak period.

Installing multi megawatts PV power stations or system require large land

or space area. However, we can use huge and unutilized roof tops of

domestic houses, commercial buildings and factories or large tracts of

abandoned land, to generate the required amount of power. Pusat TenagaMalaysia (PTM) and its IEA international consultant, estimated that 6,500

MW power can be generated by using 40% of nations house roof tops

( 2.5 million houses) and 5% of commercial buildings alone.

To meet this multi megawatts target also requires the supply of large

number of solar PV modules and inverters. Again this can easily be met ifMalaysia takes full benefits from the presence of three world leading solar

cells and modules manufacturers, namely First Solar, Q Cells of Germany

and Sunpower of US, who had decided to setup their respective

manufacturing plants in Malaysia , with total investments of RM 12billions, production capacities of 2,000 MW and would create 11,000 new

jobs. When fully operational, Malaysia will be the world 6 th largest

producer of solar cells and modules.

For the inverters supply, in Germany alone, a Gigawatt capacity PV

inverter manufacturing plant is already operational and with otherinverters manufacturers worldwide combined together, they could anytime

meet ever increasing demand for large scale and centralized solar PV

inverters worldwide.

All these factors stated above seem to indicate that building multi

megawatts PV power station in Malaysia is not a pipe dream but could be

in the pipeline. Properly planned and executed, and with FIT and otherfiscal incentives, we can attract both domestic and international investors

in planting up multi megawatts PV power systems and power plants in

Malaysia in the immediate future.

We the MPIA would like to propose the government conducts in depth

feasibility studies to consider the implementation of multi-megawatts PVpower stations for country not only for peak load leveling but also for

meeting growing electricity needs for the country, taking into account the

enormous financial benefits the country and the government would gain


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from significant reduction of gas subsidies for electricity generation

currently enjoyed by TNB and the IPPs.

4.4 Issues on Nuclear Energy.

In the past weeks and months, reports on possible nuclear energy option

have been publicized in local printing and TV media. It is now quite clear

that nuclear power seems to be already included in TNBs future power

supply plan. It is reliably reported that in 2030, the TNBs energy mix issaid to be consisting of 30% Gas, 30% coal, 30% nuclear and 10% hydro.

It seems Solar PV is not in on the radar screen of TNB. This scenario of

energy mix is obviously not in line with the just announced Green

Technology Policy.

From our standpoint, nuclear power should only be considered as a lastresort after we have exhausted all options including solar PV.

4.5 FORMATION OF GREEN TECHNOLOGY COUNCIL.

One of the strategic thrusts to promote Green Technology applications is

the formation of Green Technology Council to be chaired by Y.A.B.

Prime Minister or Y.A.B Deputy Prime Minister whose main function isfor high level coordination among various ministries, private sector and

key stakeholders for effective implementation of the Green Technology

Policy.

We humbly request the MPIA be accorded a representation in the

proposed Green Technology Council.

5.0 As a closing remark, we would like to take this opportunity to express our deep

appreciation for the outstanding contributions Y.B Datuk and your Ministry had

achieved so far in promoting Green Technology applications including solar PVand we MPIA will continue to give full cooperation and undivided support to the

government in the adoption and implementation of the National Green

Technology Policy that will ensure balanced and sustainable development in thecoming decades for Malaysia.

I sincerely hope that Y.B. Datuk give due considerations to the ideas, suggestionsand proposals outlined above, and we are at your disposal should Y.B. Datuk

require elaborations.


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Let us utilize to the maximum this enormous but free energy from the sun toprovide a safe, clean and sustainable future for our country and as the saying goes,

we do not inherit the planet earth from our forefathers but we only borrow it from

our future generation.

Yours truly,

Shamsudin KhalidPresident

Malaysia Photovoltaic Industry Association

Lets change the world, use renewable energy.

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Future Direction of Solar PV Industry

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