NON-TECHNICAL BARRIERS OF SMALL-SCALE SOLAR …

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Volume:6 Issues: 36 [May, 2021] pp. 11 - 29] Journal of Islamic, Social, Economics and Development (JISED)

eISSN: 0128-1755

Journal website: www.jised.com

NON-TECHNICAL BARRIERS OF SMALL-SCALE SOLAR

RENEWABLE ENERGY (SSSRE) ADOPTION AMONG TNB

DOMESTIC CUSTOMERS IN MALAYSIA – A LITERATURE

REVIEW

Bakri Zamri1

Mohd Afandi Abu Bakar2

Nur Azfahani Ahmad3

1Arshad Ayub Graduate Business School, Universiti Teknologi Mara (UiTM), Malaysia,

(E-mail: [email protected]) 2Faculty of Business Management, Universiti Teknologi MARA (UiTM), Malaysia,

(E-mail: [email protected]) 3 Department of Built Environment Studies & Technology, Universiti Teknologi Mara (UiTM), Malaysia,

(E-mail: [email protected])

Article history To cite this document:

Received date : 15-4-2021 Zamri, B., Abu Bakar, M. A., & Ahmad, N. A. (2021).

Halangan Bukan Teknikal Terhadap Pemasangan Solar

Berskala Kecil Tenaga Boleh Baharu di Kalangan

Pelanggan Domestik TNB di Malaysia - Kajian

Literatur. Journal of Islamic, Social, Economics and

Development (JISED), 6(36), 11 – 29.

Revised date : 16-4-2021

Accepted date : 29-4-2021

Published date : 31-5-2021

__________________________________________________________________________________________

Abstract: Carbon dioxide (CO2) is the major problems of anthropogenic greenhouse gas

emissions in Malaysia. When fossil fuels are burned, they release large amounts of carbon

dioxide, a greenhouse gas, into the air. Greenhouse gases trap heat in our atmosphere, causing

global warming (ClientEarth Communications, 11th November 2020). Sustainable Energy

Development Authority (SEDA) 2014 reported a total of 82,814.45Megawatt hour of renewable

energy is generated where 403,655,02tonnes of CO2 avoidance are achieved. Transformation

from fossil fuel energy dependence to the generation of renewable energy (RE) alternatives also

known as low-fossil fuels that are more environmentally friendly such as the biogas, solar and

biomass now become the most top three popular RE type in this country. The cleanest and most

popular energy today is solar. Malaysia receives abundant sunshine which is consistent

sunlight and very suitable for renewable solar energy in Malaysia. Thus, this country is very

suitable for solar photovoltaic installation especially for states with higher solar radiation rate

such as in Perak, Kedah, Kuala Lumpur, Negeri Sembilan, Melaka, Pahang, Johor and

Kelantan. There are about 3.2 million residential properties in this country which have

potential for a ‘Net Energy Metering’ program - solar on the roof of the premises. The

government has already set a vision to reach 20% of the renewable energy in the energy mix

by 2025. Although there is a significant increase in large scale solar projects, but there are still

low participants in terms of small-scale solar installation especially from residential owner

sectors. The research method is to collect all the literature review base on desktop study. This

paper explored a recent study from other researchers related to the obstacles in terms of non-

technical barriers that hinder the adoption of solar renewable energy among the existing

residential in Malaysia. Outcome of this desktop study indicates that there is a lack of

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information about the process of installation of Solar Photovoltaic (PV) and they also concern

about the initial cost of the Solar PV installation.

Keywords: Fossil Fuel Energy Generation, Small Scale Solar Renewable Energy, Non-

Technical Barriers

___________________________________________________________________________

Introduction

Global warming and environmental pollution are the main issues and agendas discussing by all

over the world today. The pollution is always being related with the energy emission,

manufacturing and transports sectors.

Base on IEA (International Energy Agency) 2007 report, there was about 46% of CO2 emission

come from electricity and heat production, meanwhile the transport sector contributed 27% of

the total CO2 emission and followed by 14% from manufacturing and construction.

Every time a fossil fuel is burned, it produces a lot of carbon dioxide, a greenhouse gas, to the

surface of the air. Greenhouse gases capture heat in the earth's atmosphere, creating global

warming (ClientEarth Communications, 11 November 2020). Meanwhile, pollution problems

can cause human health risks because increased CO2 concentrations can cause health problems.

It will cause long-term adverse effects such as climate change and air pollution to our

environment and global warming. The risk of disease will also be present such as hypercapnia

if the condition is uncontrollable (Farhad Taghizadeh-Hesary, 2020).

About 25% of the world's greenhouse gases (GHG) are produced from the fossil fuel sector

(World Energy Council, 2016). The world targets that global emissions should be reduced by

7.6% annually from now until 2030. Based on scientific analysis, it is to prevent adverse effects

and it should remain within the 1.5-degree Celsius ceiling at rising temperatures (United Nation

Environment Program (UNEP) - Annual Emission Gap Report, 2019).

The tradition of generating conventional systems that use a lot of gas, coal as a fuel generator

certainly produces Carbon Dioxide CO2. We have become too dependent on this conventional

power system. (S U Zakaria et al., 2019). There is a study have revealed that generation now

causes as much as 40% Carbon Dioxide CO2 from around the world (Lamiaa Abdallah et al.,

2013). It is unfortunate that this type of generation is the cause of pollution problems.

Undoubtedly, this type of conventional generation is still needed to meet the demand for

sufficient electricity, and it needs more fossil fuels.

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Figure 1: Sources of CO2 emission by sectors in Malaysia

Source: International Energy Agency (IEA 2007)

In Malaysia, carbon dioxide problems are from the most significant anthropogenic greenhouse

gas emissions, and the largest CO2 is produced by the process of electricity generation (Kazeem

Alasinrin Babatundea et.al, 2018). Referring to the IEA report in 2016, Malaysia has been

identified as the second highest contribution in terms of carbon intensity of electricity sector in

southeast Asian for the year of 2014. Malaysia has set a target of reducing the CO2 emissions

rate by 45% by 2030 which is in line with the high-income economic goals that create a huge

and unique challenge for the Malaysian economy (Kazeem Alasinrin Babatundea et.al, 2018).

Figure 2: Fossil CO2 & GHG Emissions of Malaysia

Source: Joint Research Centre (JRC), The European Commission's Science and Knowledge Service

(JRC Science for Policy Report, 2017)

46%

27%

14%

9%

3% 1%

Electricity and heat production Transport Manufacturing and construction

energy industry (own use) Other non residential sectors Residential

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Referring to the IEA report in 2016, Malaysia has been identified as the second highest

contribution in terms of carbon intensity of electricity sector in southeast Asian for the year of

2014. Malaysia has set a target of reducing the CO2 emissions rate by 45% by 2030 which is

in line with the high-income economic goals that create a huge and unique challenge for the

Malaysian economy (Kazeem Alasinrin Babatundea et.al, 2018).

Figure 3: Carbon Intensity Of Electricity Sector, Southeast Asian Countries

Source: International Energy Agency (IEA 2016a)

Reduce Fossil Fuel Dependency

Transformation from dependence from fossil fuel energy to the generation of renewable Energy

(RE) energy alternatives such as low-fossil fuels that are more environmentally friendly

including Biogas, Solar and Biomass. It should be the main thing in the effort to save our world

from being further polluted. Many are talking from countries around the world today chanting

energy sustainability which is an alternative generation method.

There is an evidence that RE can replace conventional energy methods and become a cleaner

and more environmentally friendly generation. For example, under the FiT (Feed in Tariff)

program, a total of 82.814.45 MWh of renewable energy is generated where 403,655,02 tonnes

of CO2 avoidance is achieved. This positive effect on the social and environmental systems can

be saved in an effort to reduce CO2 levels. (SEDA Malaysia, 2014). Reduced emissions from

2016 to 2018, total emissions increased around 8,056,420 tCO2e. (TNB Annual Report, 2019).

There is still much to be improved and the renewable task makes generating a very significant

alternative to the 4.0 industrial revolution in the future and realizing energy sustainability

around the world. Renewable energy generation is the right of the current society as more

sustainable energy technology in the near future. (Harald Heinrichs et al., 2016). Renewable

energy is the best way to reduce carbon emissions. (Houda El Mustapha, 2018).

Based on the report of the Renewable Energy Direction by the International Renewable Energy

Agency (IRENA) reminds of the need to transform the world into a major consumer of

renewable energy sources to ensure that the energy demands demanded are met. (International

Renewable Energy Agency Report (IRENA), 2018).

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Worlds Renewable Energy Target

New York is targeting 29% of RE generation by 2015, while the EU (European United) mission

is to achieve 20% of its energy resources from RE generation by 2020. In California, they set a

target of 33% of energy coming from RE by 2020 while in the Oregon Target , The United

States wants to achieve 25% of electricity from RE generation by 2025. (Nurcan Kilinc-Ata,

2016). In Ghana, approximately 5000 MW of electricity generation capacity is installed by 2020

which is about 500 MW (or 10%) of RE electricity target by 2020 (Ing. Edem C. Bensah et.al,

2015). Thailand is planning an Alternative Energy Development Plan (AEDP) which was first

formed in 2012 and its target is 25% renewable energy within 10 years of efforts from 2012 to

2021. (Renewable Energy Outlook Thailand, International Renewal Energy Agency, 2017).

National Policies, Trends and Development

Figure 4 shows the history of trends related to the Malaysian Energy Policy. The earliest

Renewable Energy was promoted in 2001 by the government through the Small Renewable

Energy Program (SREP). It is a support program under the five-fuel policy outlined in the 8th

Malaysia Plan which aims to encourage the use of renewable fuels as the fifth fuel. The 10th

Malaysia Plan (2010), the Government made a RE Policy and National Action Plan (NREPAP)

and the beginning of this technological opportunity to grow in the country. However, there are

currently identified industry gaps, where RE's contribution capacity is still low at Malaysia.

(Nor Ziha Zainol Abidin et al., 2014).

In 2011, SEDA (Sustainable Energy Development Authority) was established to play a role in

managing and regulating renewable energy programs under the Feed In Tariff Act was enforced

under the Renewable Energy Act 2011 [Act 725]. Feed-in tariff (FiT) for Solar energy

generation program using PV (Photovoltaic) technology method since 2011. However, it was

replaced by a new program called Net Energy Metering (NEM) which was introduced in 2016.

This new NEM mechanism is specifically for Energy Program Solar from residential and

commercial circles. Prior to NEM, FiT had offered cash payment methods to solar electricity

generators sold to the grid system for each electricity unit sold including other incentives under

renewable energy or green technology programs.

The latest on RE is on 23 November 2020 at the Solar Energy Industry in Malaysia, a new road

map has been built and is known as Renewable Energy Transition (RETR) 2035. It is a strategic

road map improved by SEDA together with several stakeholders in this industry. It plans efforts

and strategies and actions to accelerate the achievement of the country's major renewable

energy targets. This road map is expected to be part of Malaysia's 12th Malaysia Plan for the

year 2021 to 2025. (Energy Commission, 2019).

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Table 1: Energy Policies in Malaysia (1979-2011)

Year Policy Thrust/Objective

1975 National Petroleum

Policy

Ensure optimal use of petroleum resources via regulation of

ownership and management of the industry including related

economic, social and environment safeguards

1979 National Energy Policy Achieve supply and utilization of energy resources with

environmental considerations

1980 National Depletion

Policy

Guard against over-exploitation and hence dependency on

crude oil and natural gas

1981 Four- Fuel

Diversification Policy

Strategize generation mix as based on oil, gas, coal and hydro

1998 National Mineral Policy Utilize locally sourced coal

2001 Five-Fuel

Diversification Policy

Recognize renewables as fifth fuel in generation mix

2001 Small Renewable

Energy Power (SREP)

Program

Encourage small private power generation projects using

renewables

2009 National Green

Technology Policy

Use green technologies and promote cogeneration and

renewables in power generation

2010 New Energy Policy Enhance energy security to include economic, environment

and social considerations

2011 Renewable Energy Act Enforce feed-in-tariff (FiT) scheme for RE

2011 National Biomass

Strategy 2020

Recognize use of biomass waste for biofuels

Source: Energy Commission

Malaysia’s Renewable Energy Target

A more environmentally friendly Renewable Energy (RE) generation system, but RE capacity

is currently low in Malaysia. The government has already set a vision to reach 20% of the

renewable energy in the energy mix by 2025. Of course, it is a big challenge because currently

Malaysia only has 2% of its energy coming from RE generating sources. "(Kaman, Z. K. et al.

2019).

A capacity of 3,758MW is needed to achieve the RE 20% target by 2025. (Energy Commission,

2019). The Minister of Energy Malaysia recently announced a new target of 31% for Malaysia's

Renewable Energy Mixed Energy capacity by 2025 and 40% by 2035 (IRENA, 18 January

2021).

There is an industrial gap exist in order to reach RE target of 25% from mixed generation in

Malaysia. Currently, the operational RE capacity is about 1,483MW has been achieved.

Meanwhile, about 2,597MW has been committed but still not operationalized. However,

another new requirement capacity of 3,758MW more is needed to realize the 20% target.

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Figure 4: Malaysia RE Requirement to Meet Target

Source: Report on Peninsular Malaysia Generation Development Plan 2019 (2020 – 2030) Energy Commission,

Feb 2020.

Why Solar? The Justification

Currently, renewable energy that is suitable for Malaysia are Biogass, Biomass, Hydro and

Solar. The cleanest and most popular energy today is solar. Sunlight in Malaysia is said to be

very suitable for renewable solar energy. Based on a study that has been revealed by the Energy

Commission, the higher solar radiation rate is in 8 states, namely Perak, Kedah, KL-Negeri

Sembilan-Melaka, Pahang, Johor and Kelantan. The state was identified as having high

potential for the installation of solar photovoltaic systems.

A study by Wan Syakirah Wan Abdullah et al, (2019), "Given the hot and sunny weather

throughout the year, Malaysia has a high chance of producing a good solar system." (p. 4).

Malaysia receives a lot of sunlight and it is consistent continuously for 3 years which is around

3 kWh per square meter. (N. A. Ahmad et al., 2011).

The country receives a lot of sunlight every day at a temperature of 400-600 MJ / m2 between

23◦C to 34◦C, where it is found to be very suitable for solar PV installation (Huda. M, 2018).

In Malaysia, there are about 3.2 million residential properties, 450,000 commercial lots, 90,000

multi-storey factories, 21,000 stand-alone factories and 1,000 shopping complexes. On this

property there is a large area of roof area, which corresponds to the solar policy of Solar Energy

Metering on the roof of the premises. (The Edge Malaysia Weekly, 11 January 2020).

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Table 2: Annual Solar Radiations in Different Cities in Malaysia

Source: http://www.thegreenmechanics.com/2013/08/ann ual-solar-radiations-in-different.html

Figure 5: Solar Irradiant Maps

Source: Energy Commission, Energy Malaysia Vol 17, Available online: <http://www.st.gov.my, page 38 (2018)

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The country receives a lot of sunlight every day at a temperature of 400-600 MJ / m2 between

23◦C to 34◦C, where it is found to be very suitable for solar PV installation (Huda. M, 2018).

In Malaysia, there are about 3.2 million residential properties, 450,000 commercial lots, 90,000

multi-storey factories, 21,000 stand-alone factories and 1,000 shopping complexes. On this

property there is a large area of roof area, which corresponds to the solar policy of Solar Energy

Metering on the roof of the premises. (The Edge Malaysia Weekly, 11 January 2020).

The Non-Technical Barriers

Small-scale solar PV installations, defined by EIA as having capacity of less than 1 megawatt

(MW), are usually located at the customer's site of electricity consumption (Energy Information

Administration, 2015). The meaning of Non-Technical and Technical Barrier can be clearly

explained based on the details told by Ioana Ionel, Francisc Popescu, Dorel Cicirone Badescu

(2009), "Technical barriers may be handled by scientists. Non-technological barriers act in

many different directions, such as economic, ecological aspects, social aspects, regulatory

aspects, political aspects etc”. (pp. 96-97).

Several barriers have been identified such as institutional term barriers, financial problems

information barriers and technological barriers that need to be addressed to ensure that the

objectives of this renewable energy program are achieved. (Wan Syakirah Wan Abdullah et al.,

2019). For the purpose of realizing this renewable energy development, barriers such as

financial challenges, technological challenges, institutional term barriers and information

barriers are among the main concerns. (Wan Syakirah Wan Abdullah et al., 2019).

Regarding Nik Abdul Aziz and Abdul Wahid (2015), "Non-technical barriers are the challenges

with respect to perceived wise government strategies, high initial cost and maintenance costs,

lack of product knowledge and experience, solar panel aesthetics, social influence,

demographic character such as achievement academics and income rates as well as the lack of

nature and love of the environment may be part of the challenge for the installation of solar

residential panels in Malaysia"(p.329). Although this Solar Energy technology helps people

living in urban and rural areas, challenges such as initial cost constraints for the installation of

solar systems become a major obstacle to the widespread use of solar PV technology. (Huda.

M, 2018). There is also an analysis stated that more than 70% of social acceptance respondents

hope that the government leads and plays a key role in leading this alternative technology

promotion program. (K.H. Solangi et al., 2015). Several studies have found the significance of

relying on supportive policies for renewable energy. Tax exemption is one of the tax incentives

that the United States has introduced to households or corporate taxpayers to reduce the barriers.

(T Safwat Kabel et al, 2019). The lack of people awareness level in environmental issue also

has been identified as a barrier. In Chile, environmental stewardship is one of the motivations

of the solar energy. (J. Walters et al, 2018).

Conclusion

Lately, there has been a lot of positive response to the Large-Scale Solar scheme by industry

players through bids offered by regulators unfortunately the response to a NEM especially for

the residential sector is still at a level that needs to be improved. From the past literature review,

the main non-technical barriers identified are the initial cost constraints (Huda. M, 2018), the

information barrier (Wan Syakirah Wan Abdullah et al., 2019), the tax incentives (T Safwat

Kabel et al, 2019), the social acceptance (K.H. Solangi et al, 2015) and the environmental issue

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(J. Walters et al, 2018). The obstacles to a residential to install solar Photovoltaic (PV) on the

roofs of their homes need to be investigated and solved.

From this desktop study indicates that there is a lack of information about the process of

installation of Solar Photovoltaic (PV) and they also concern about the initial cost of the Solar

PV installation.

Acknowledgements

The author like to express a great acknowledgment to the Universiti Teknologi MARA Perak,

to the organizer and to my supervisor and co-supervisor for giving this opportunity to me for

publishing this initial paper as a part of contribution in terms of ideas for Malaysia aspiration

of the energy sustainability in the near future.

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NON-TECHNICAL BARRIERS OF SMALL-SCALE SOLAR …