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FACTORS INFLUENCING RESIDENTS INSTALL INTENTION TOWARDS

SOLAR POWER SYSTEM IN PENANG

THONG PUI PUI

Thesis submitted in fulfillment of the requirements for the degree of Master of

Business Administration

UNIVERSITI SAINS MALAYSIA

2015

i

ACKNOWLEDGEMENT

There are many individuals whom I would like to thank for their underlying

support and guidance that made it possible for me to complete this MBA thesis. First of

all, my sincere gratitude goes to my beloved family, to my parents for giving me life in

the first place and for unremitting love and encouragement to pursue my studies, as well

as to my brother and sisters for their unconditional support and encouragements.

I am greatly indebted to my supervisors, Dr. Goh Yen Nee, for her stimulating

suggestions, encouragement and providing much-needed assistance in all time of research

and writing the thesis. Truly, her optimism got me through tough times and she never

fails to keep me on track. Dr. Goh, there was never a stress mode in your presence. From

the bottom of my heart, it is really my honor to have her as my supervisors, Thank you.

In addition, this thesis would not have been complete if it was not for a group of

individuals whom I truly am grateful for having in my life. My deepest thank you goes

out to my lecturers of AGW621 Research Methodology, Prof. Hasnah Haji Haron and

AGW617 Advanced Business Statistics, Prof. Madya Dr. K. Jayaraman for their

guidance, comments, and reassuring words. Last but definitely not the least; my

appreciation goes out to my dear friend, my study group members as well as classmates

whom had been there from the very beginning; Tan Wee Lee, Patrick Tan Foon Cheng,

Tang Song Yee, Loong Shih Peng, Ong Xiao Fei, Lim Chut Seong, thank you.

ii

TABLE OF CONTENTS

Page

ACKNOWLEDGEMENT i

TABLE OF CONTENTS ii

LIST OF TABLES vi

LIST OF FIGURES viii

LIST OF ABBREVIATIONS ix

ABSTRAK (MALAY) xi

ABSTRACT xii

CHAPTER 1: INTRODUCTION 1

1.1 Introduction 1

1.2 Background 1

1.2.1 Overview of Solar Power system 1

1.2.2 Overview of Solar Power in Malaysia 3

1.2.2.1 Geographical profile in Malaysia 3

1.2.2.2 Current energy situation in Malaysia 4

1.2.2.3 Malaysia Population Distribution 5

1.2.2.4 Renewable energy policies in Malaysia 6

1.2.2.5 Solar energy resources distribution in Malaysia 8

1.3 Problem Statement 8

1.4 Research Objectives 11

1.5 Research Question 12

iii

1.6 Definition of Key Term 12

1.7 Significance of the Study 14

1.8 Organization of Remaining Chapters 16

CHAPTER 2: LITERATURE REVIEW 17

2.1 Introduction 17

2.2 Overview of Solar Power System 17

2.3 Perceived Benefit 19

2.4 Perceived Trust 21

2.5 Attitude towards Solar Power System 23

2.6 Environmental Value 25

2.7 Perceived Cost 26

2.8 Awareness 28

2.9 Install Intention towards Solar Power System 29

2.10 Summary of Independent Variables 31

2.11 Theory Of Reason Action (TRA) 32

2.12 Theoretical Framework 33

2.13 Hypotheses Development 34

2.13.1 Perceived Benefit (Hypothesis 1) 34

2.13.2 Perceived Trust (Hypothesis 2) 35

2.13.3 Attitude towards Solar Power System Install Intention (Hypothesis 3) 35

2.13.4 Environmental Value (Hypothesis 4) 36

2.13.5 Perceived Cost (Hypothesis 5) 37

iv

2.13.6 Awareness (Hypothesis 6) 37

2.14 Summary 38

CHAPTER 3: RESEARCH METHODOLOGY 39

3.1 Introduction 39

3.2 Research Design 39

3.2.1 Pilot Study 40

3.3 Variables 41

3.3.1 Perceived Benefit 41

3.3.2 Perceived Trust 42

3.3.3 Attitude towards Solar Power System 42

3.3.4 Environmental Value 43

3.3.5 Perceived Cost 43

3.3.6 Awareness 44

3.3.7 Install Intention towards Solar Power System 44

3.4 Measures 45

3.5 Sample and Population 46

3.6 Procedures 48

3.7 Data Analysis Technique 50

3.8 Summary 55

v

CHAPTER 4: RESULTS 56

4.1 Introduction 56

4.2 Profile of Respondents 56

4.3 Goodness of Measures 59

4.3.1 Construct Validity 61

4.3.2 Convergent Validity 63

4.3.3 Discriminant Validity 65

4.3.4 Reliability Test Analysis 66

4.3.5 Goodness-of-fit Measures 68

4.3.6 Q2 Measures Using PLS Blindfolding Procedure 69

4.4 Descriptive Statistics Analyses 72

4.4.1 Mean and Standard Deviation for All Scale Items 72

4.5 Hypothesis Testing 75

4.6 Summary of Results 80

CHAPTER 5: DISCUSSIONS AND CONCLUSION 82

5.1 Introduction 82

5.2 Recapitulation of the Study 82

5.3 Discussion of the Major Findings 84

5.3.1 Perceived Benefit and Attitude towards Solar Power System (H1) 84

5.3.2 Perceived Trust and Attitude towards Solar Power System (H2) 85

5.3.3 Attitude towards Solar Power System Install Intention (H3) 86

vi

5.3.4 Environmental Value towards Solar Power System Install Intention (H4) 87

5.3.5 Perceived Cost towards Solar Power System Install Intention (H5) 88

5.3.6 Awareness towards Solar Power System Install Intention (H6) 89

5.4 Implications of the Study 90

5.5 Limitations of the Study 95

5.6 Suggestion of Future Research 96

5.7 Conclusion 98

REFERENCES 99

APPENDIXES 110

vi

LIST OF TABLES

Page

Table 1.1 Malaysia Population Distribution 5

Table 2.1 Summary of Previous Studies on Independent Variables

Influencing Solar Power System Install Intention

31

Table 2.2 Summary of Research Hypotheses 38

Table 3.1 Perceived Benefits Measurement 41

Table 3.2 Perceived Trust Measurement 42

Table 3.3 Attitude towards Solar Power System Measurement 42

Table 3.4 Environmental Value Measurement 43

Table 3.5 Perceived cost Measurement 44

Table 3.6 Awareness Measurement 44

Table 3.7 Install Intention towards Solar Power System Measurement 45

Table 3.8 Various Measurement Scale along with the number of items and

variables types

46

Table 3.9 Sample Size Recommendation in PLS-SEM for a Statistical

Power of 80%

48

Table 3.10 Summary of Data Analysis Techniques and Objective 55

Table 4.1 Profile of Respondents 57

Table 4.2 PLS Result of Main Loadings and Cross Loadings 62

Table 4.3 PLS Result of Convergent Validity Measures 64

Table 4.4 PLS Result of Discriminant Validity Measures 65

Table 4.5 PLS Result of Reliability Test 67

Table 4.6 PLS Result of Goodness-of-fit (GoF) Index 68

Table 4.7 Descriptive Statistics for the variables 73

vii

Table 4.8 Summary PLS Result of the Model Construct 75

Table 4.9 PLS Results of Path Coefficients and Hypothesis Testing 80

Table 4.10 Summary of the Findings 81

viii

LIST OF FIGURES

Page

Figure 2.1 Theoretical Framework 33

Figure 4.1 Reflective Research Model for Install Intention toward Solar

Power System

60

Figure 4.2 Blindfolding of Attitude toward Solar Power System

(ATT as DV)

70

Figure 4.3 Blindfolding of Install Intention toward Solar Power System

(ITT as DV)

71

Figure 4.4 Results of the Path Analysis 77

Figure 4.5 Results of Bootstrapping 78

ix

LIST OF ABBREVIATIONS

ATT Attitude

AVE Average Variance Extracted

AW Awareness

BI Behavioural Intention

BIPV Building Integrated Photovoltaic

BSA Business Software Alliance

CAP Consumer Association of Penang

CFA Confirmatory Factor Analysis

CR Composite Reliability

DV Dependent Variable

EC Energy Commission

EPU Energy Unit of Economic Planning Unit

EV Environment value

GHG Greenhouse gas

GoF Goodness-of-fit

H Hypothesis

IPPs Independent Power Producers

ITT Install intention

IV Independent Variable

LNG liquefied natural gas

MEGTW Ministry of Energy, Green Technology and Water

MNC Multinational Company

MoE Ministry of Education

MV Mediating Variable

n Number of Respondent

OSL Ordinary Least Square

PB Perceived benefits

PC Perceived Cost

PLS Partial Least Square

PLS Partial Least Square

PLS-SEM Partial Least Square-Structural Equation Modeling

PT Perceived trust

PTM Pusat Tenaga Malaysia

PV Photovoltaic

Q Q Square

R R Square

RE Renewable energy

SE Standard Error

x

SEM Structural Equation Modeling

SESB Sabah Electricity Sdn. Bhd

SESCO Sarawak Energy Supply Corporation

SPS Solar Power System

SPSS Statistical Package for the Social Sciences

ST Solar Thermal

TNB Tenaga Nasional Berhad

TRA Theory of Reasoned Action

Type I error Incorrect Rejection of a True Null Hypothesis

UK United Kingdom

UKM Universiti Kebangsaan Malaysia

UM Universiti of Malaya

UPM University Pertanian Malaysia

US United State

USM Universiti Sains Malaysia

UTM Universiti Technology Malaysia

Cronbachs Alpha

Beta

xi

ABSTRAK (MALAY)

Kajian ini menunjukkan adaptasi Teori Tindakan Bersebab (TRA) untuk menkaji

bagaimana persepsi manfaat dan persepsi kepercayaan mempengaruhi sikap penduduk

rumah Malaysia terhadap sistem tenaga solar dan bagaimana sikap, nilai alam sekitar,

persepsi kos dan kesedaran mempengaruhi niat memasang sistem tenaga solar penduduk

rumah. Soal selidik yang ditadbir sendiri telah direka menggunakan skala mantap. Satu

kajian ke atas 248 responden telah dijalankan di Pulau Pinang, Malaysia melalui e-mel,

pengedaran secara peribadi di Syarikat Mutinasional dan university awam menggunakan

kaedah memintas. Statistical Package for the Social Sciences (SPSS) dan Partial Least

Square (PLS) telah digunakan untuk menganalisis data. Persepsi manfaat adalah

pengaruh faktor yang kuat untuk mempengaruhi sikap penduduk rumah terhadap sistem

tenaga solar, diikuti oleh persepsi kepercayaan. Sikap penduduk rumah terhadap sistem

tenaga solar, nilai alam sekitar dan kesedaran mempunyai pengaruh positif terhadap niat

memasang sistem tenaga solar. Tetapi, persepsi kos mempunyai pengaruh negative

terhadap niat memasang penduduk rumah. DI samping itu, kajian ini adalah terhad

kepada penduduk rumah yang berbangsa Cina, dan tidak boleh dianggap secara umum di

seluruh Malaysia dan hanya tenaga solar dipertimbangkan. Kawasan geografi, budaya

dan kategori tenaga boleh diperbaharui yang lain harus dikaji di masa depan. Kajian ini

memberi kefahaman yang mendalam mengenai sikap penduduk rumah Malaysia terhadap

sistem tenaga solar. Hasil kajian boleh digunakan untuk membentuk strategi yang

berkesan kepada tenaga solar pemaju, pakar teknikal, akademi, pembuat dasar dan badan

kerajaan untuk mempromosi tenaga solar boleh diperbaharui dan mewujudkan kesedaran

di kalangan penduduk rumah Malaysia terhadap sistem tenaga solar.

xii

ABSTRACT

This study demonstrate the adaptation of Theory of Reasoned Action (TRA) to

examine how perceived benefits and perceived trust influence Malaysian residents

attitudes toward solar power system and how attitude, environment value, perceived cost

and awareness influence residents install intention towards solar power system. A self-

administered questionnaire was designed using established scales. A survey on 248

respondents was conducted in Penang, Malaysia through email, personally distributed in

MNC and public university intercept methods. Statistical Package for the Social Sciences

(SPSS) and Partial Least Square (PLS) were used to analyse the data. Perceived benefits

is significant positive factors influence residents attitudes toward solar power system,

followed by perceived trust. Residents attitude towards solar power system, environment

value and awareness are positive influence on residents install intention towards solar

power system. However, perceived cost has a negative influence on residents install

intention towards solar power system. In addition, the findings are limited to Malaysian

Chinese residents which cannot generalised across the whole of Malaysia and only solar

energy are considered. Other geographic area, cultural and renewable energy categories

should be investigates in future research. The research provides an in-depth

understanding of Malaysian residents attitudes toward solar power system. The research

findings can be used to design effective strategies for the solar power developer and

marketer, technical expert, academia, policy maker and governmental bodies to promote

solar energy and create awareness among Malaysian residents towards solar power

system

1

CHAPTER 1

INTRODUCTION

1.1 Introduction

This chapter works as the foundation for the thesis and begin the research outline

which consists of problem statement and elaboration of significant study followed by

research objective and research questions. Lastly in the end of the chapter, organizational

study of the remaining chapters will be discussed as well. The major emphasis of present

reasearch is to identify significantt factors that influence the intention of Penang,

Malaysia residents to install solar power system. In general, solar power system is used

as a tool to generate renewable energy electricity. Solar power system will become one of

the main contributors to Malaysia economic development in future.

1.2 Background

1.2.1 Overview of Solar Power System

The time of electric power generation in a huge station which powered by steam

appears to reach an end (Mekhilef, Safari, Mustaffa, Saidur, Omar and Younis, 2012).

Main factor that is driving towards green energy through renewable sources of energy

that are free and excessive from conventional climatic hazardous methods is the rising

environmental damage fears (Mekhilef, Barimani, Safari and Salam, 2014). Moreover,

the demand for energy is growing due to the increase of world population. Therefore the

interest towards renewable energy is intensifying.

Solar power system (SPS), including both Solar Thermal (ST) and Photovoltaic

(PV) technologies are devices that convert light into electric current using the

2

photoelectric effect (Chen, 2014). Chua and Oh (2012) defined that solar...

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