by Ir. Azean Abu Samad.
1. Zero capital expenditure
Yes, you heard it right. You need to pay MYR Zero to get solar to be installed in your premise. Why buy the whole solar PV system when you can only buy the solar electricity generated. Your capital expenditure budget can be utilized towards growing your core business. On a side note, let’s be honest that it is not easy to get capex budget approval from your finance department. Save your headache, go for SEP so you do not have to apply for capex to go solar.
2. Off-balance sheet obligation
Since you are not spending a single dime on the solar PV system, it will not appear in your balance sheet as it is not your asset. Instead, the solar energy that you buy will appear as utility expenditure in your Profit & Loss Statement, just like your electricity or water bill.
3. Instant savings for your electricity cost
This is where it gets more interesting. Typically, the solar rate offered by Asset Owner is lower than your electricity tariff offered by your utility. This creates instant savings as you are buying energy cheaper from your solar system compared to buying energy from the grid. The savings will also come from not paying for the Kumpulan Wang Tenaga Boleh Baharu (KWTBB) and Imbalance Cost Pass Through (ICPT) charges for the solar energy consumed. Depending on the number of solar panels you install, savings can be thousand of Ringgits per year.
4. Protection against future rise of electricity cost
You can lock in your solar electricity rate at a fixed rate throughout contract period. While you do not have control over future rise of electricity tariff, and the tariff usually rises every 3 years, you do have the option to lock in your solar rate.
5. Zero worry to maintain and repair the solar PV system
Recall that it is the responsibility of the Asset Owner to maintain and repair the solar PV system at their cost. You do not have to worry at all about the operation and maintenance of the solar PV system.
6. Zero production and performance risk
This is related to point 5. As you are only responsible to buy solar electricity that is being generated, if there is no production of solar energy due to faulty system, outage on the electrical network or severe weather, you simply do not have to pay. Asset Owners carry the responsibility to ensure that their solar investment is producing solar energy output and the highest performance.
“If there is no production of solar energy due to many reasons such as faulty system, outage on the grid or severe weather condition, you simply do not have to pay”
7. Early buyout option
You have the option to buyout the solar PV system from Asset Owner at a price that is already stipulated in the contract. You can find out more information about the contract under SARE, one of the articles in TNBX's blog.