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Mechanism of the FiT

Under the Renewable Energy Act 2011, heavier consumers of electricity (>300KWh/month) need to pay an extra 1% on their monthly electricity bill. These additional charges will go into a Renewable Energy Fund managed by Sustainable Energy Development Authority (SEDA).

 

Individual and company may submit application to SEDA under the FiT system to become a Feed-In Approval Holder (FiAH). Once the application is approved, the FiAH signs an agreement with Tenaga Nasional Berhad. The agreement enables FiAH to sell solar electricity to Tenaga Nasional Berhad at a fixed premium for a period of 21 years. The signing of the agreement is guaranteed. TNB is legally obliged to accept all electricity generated by FiAH.

 

This is a polluter pays concept. This approach produces a twin advantages of discouraging wasteful electricity consumption and at the same time, using the fund collected to generate green energy.

 

As the size of the RE fund is limited, there is a quota and application is on a first come first serve basis.

 

The fixed premium price (hereby referred to as FiT rate) depends on the year you start selling electricity to TNB. This fixed premium price is being revised downward yearly by SEDA as solar PV technology becomes cheaper year by year.

 

 

Revisit on abbreviations:

SEDA    : Sustainable Energy Development Authority. Established by Malaysia government to regulate and develop the renewable energy industry.

FiT     : Feed-In Tariff system to provide incentives for renewable energy development. It is administered by SEDA.

Feed-In Approval Holder, refers to individual/company that is approved by SEDA to sell solar electricity to electric utility company like Tenaga Nasional Berhad.

The price at which the FiAH sells solar electricity to electric utility company. It is being revised downward yearly by SEDA.

 

 

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