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10 THINGS YOU NEED TO KNOW BEFORE GOING SOLAR​

Updated: Aug 22

by Ir. Azean Abu Samad.


1. Make sure you understand your electricity rates

For residential customers, there are 5 tiers of usage. Higher energy usage results in higher rates. In this tariff structure, the more you use, the more expensive your energy rates will be.

When your electricity bill exceeds RM 395.60, you will fall under tier 5, i.e. the most expensive bracket. Now that you and your family are at home most of the time due to Covid-19, your electricity consumption can easily shoot up to the highest tier. So how does this relate to your solar plan? When you go solar, you will reduce your electricity purchase from your utility at the most expensive tier. Hence, your solar investment will yield faster return on investment and higher cost savings.

2. Get an accurate idea of the amount of energy you use each month

If you are looking for ways to reduce your electricity bill, we always advise our clients that going solar goes hand in hand with energy efficiency. Reduce your energy consumption by energy saving changes and upgrades such as setting your air conditioners at 24 degree Celsius , clean the filters, buy 5 Star energy rated appliances and replace incandescent to energy efficient bulbs. Plan your solar PV system size based on the efficient usage of electricity.


3. Discuss with your solar consultant on the solar size

Don’t fall into the trap of installing solar panels more than you require not unless you want to. Seek explanation from your solar consultant on estimated solar energy generated and how it will impact your overall monthly electricity cost.

4. Get the latest update on green incentives from government

If you are a business owner, you are eligible for Green Investment Tax Allowance (GITA) for renewable energy, energy efficiency, green building, green data center and integrated waste management activity projects until 2023.. Do note that, you are eligible if the investment is via cash or loan. Solar PPA and Solar Lease is not yet eligible. You can check out more about financial investment, on the TNBX website, under a blog article called "Solar financing".


“Investment Tax Allowance (ITA) of 100% for qualifying capex incurred on green technology project. The allowance can be offset against 70% of statutory income in the year of investment. Unutilized allowances can be carried forward until they are fully absorbed”


5. Find out the various solar scheme arrangement with your utility

There are 5 schemes currently available, namely Feed-In-Tariff (FIT), Net Energy Metering (NEM), Large Scale Solar (LSS), New Enhanced Dispatch Arrangement (NEDA) and Self Consumption (SELCO). Except for SELCO, all the schemes allow you to sell solar energy to your utility. You can check out more information about this, on the TNBX website, in a blog article about "Solar schemes in Malaysia".

6. How much savings you can get by going solar? 

Savings is determined by various factors such as electricity tariff, solar PV size and cost, financing option chosen and actual solar energy production and performance. You can find out estimated savings at TNB website.


You may refer to this link https://www.tnb.com.my/solar/index.html on how to estimate solar PV cost and saving


7. Ask about your solar warranties

There are 3 types of warranties offered. First is solar panel product warranty by manufacturer. Typical product warranty for solar panel is between 20 to 25 years. For inverter, typical manufacturer warranty is between 5 to 10 years. Second warranty by manufacturer is performance guarantee. This is to guarantee that the energy output will be as specified in warranty document. The third warranty is on the workmanship by solar installer. Typical warranty on workmanship is between 1 to 2 year. Do note that neither of these warranties cover theft, fire or other damages.


You may also want to consider taking up solar insurance policy. Currently, the only insurance company that offers solar insurance in Malaysia is Allianz. Contact us and we will hook you up.

8. How long do solar and inverter last?

For solar panel, the oldest we have seen is over 40 years in the USA. For inverter, we typically estimate between 5 to 10 years.


9. Will solar panels harm your rooftop?

The panels will not harm your rooftop if properly installed. You may also find that your house is cooler as the panels protect the area from light and heat. Choosing verified solar installer will go a long way to ensuring job well done.

10. Find out options available in the market to help you finance your solar investment

Cash will give you the fastest payback and return on investment. Same goes to 0 % easy payment plan using credit card.

Other options available are solar loan with banks with typical interest rate between 5 to 7%.  Solar lease is also gaining traction in Malaysia where you make installments with your solar provider. For businesses, if you do not plan to have solar panel in your balance sheet and fork out capital expenditure to go solar, Solar Energy Purchase (SEP) is the right option for you. You can find more information about this, in a blog article on the TNBX website, titled "Solar financing".

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