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Escalating household electricity bills following increasing consumption, especially during the lockdown periods when most are forced to stay home, have led many to mull the option of solar photovoltaic (PV) systems to save more on bills, while saving the environment.
While this is a positive development for local solar system providers in the market, industry players reckon that the high upfront cost is still the main factor that deters people from taking the decisive step.
According to adjunct professor of Sultan Idris Education University (UPSI), Datuk Dr Muhammad Guntor Mansor Tobeng (pictured), the installation cost of a solar PV system at a landed house will cost about RM19,000 for a terraced house (four kilowatt single-phase wiring) to RM40,000 (10 kilowatt three-phase wiring, normally for semidee and bungalow).
“Undeniably, looking merely at the upfront cost itself, it has scared off many interested consumers. However, surging electricity bills also make people start to rethink ways to save on the bills,” he says.
Guntor is also the vice-president of Malaysia Photovoltaic Industry Association and the founder and managing director of renewable energy services company Gading Kencana Sdn Bhd.
Currently, Tenaga Nasional Bhd is the only electric supplier in Peninsula Malaysia, serving approximately 10.1 million customers (as at March 2021). The electric utility company will review its electricity tariff rate every three years, and the next review will be on Jan 1, 2022.
“Many [consumers] may not realise that residential properties are actually paying a higher tariff rate as compared to industrial or commercial properties,” says Guntor, adding that on average, the tariff rate for residential is about 57 to 67 sen per kilowatt hour (kWh) while factories are paying 36 sen per kWh, while commercial properties are paying around 33 sen per kWh.
For some, surging electricity bills incurred during the stay-home periods during the lockdowns have led them to take the plunge into installing solar PV systems for their homes.
Solar PV system provider Plus Xnergy Holdings Sdn Bhd founder and chief executive officer Ko Chuan Zhen (pictured) estimates that solar PV systems at home could help to save around 20% to 90% of the electricity bills.
“It all depends on the size of the solar PV panels. The users may not see significant cost savings in the first few years due to the higher upfront cost, but the effects on savings will kick in after five years, especially when electricity tariff rates continue to rise,” he explains.
“The savings part depends on building roof size, which can go from 20% to 90% savings. For instance, a single-storey house with a large roof area with two residents can result in up to 90% savings,” estimates Ko.
Instalment schemes
While upfront cost remains the main concern, Guntor observes that some of the industry players are introducing instalment payment schemes, which could offer more affordable solutions for interested users and also help generate recurring income for the service providers.
Plus Xnergy is one of them. Ko explains the instalment model works like the water filter or air purifier leasing plans, where the service providers will install the equipment and offer routine maintenance services to the users.
“Many might have the misconception that solar PV systems do not need further maintenance. Though the maintenance cost is low, routine maintenance is still required to ensure everything works well,” he says.
One of the important maintenance works is deep cleaning. Solar panels tend to accumulate dust and dirt, which could affect its performance. Hence a yearly thorough cleaning is required. At the same time, there will be some wear and tear parts, like switchboard and electric fuses – these require regular monitoring in case replacements are needed. All these works are covered under the instalment plan.
Guntor concurs with Ko that an instalment plan offers a hassle-free solution and lower upfront cost to interested users, but he also reminds consumers to carefully choose their service providers because a solar PV system is a long-term investment for property owners, spanning up to 25 years, and a reliable service provider is important to ensure the return on investment.
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