WHAT YOU SHOULD KNOW IN SARE CONTRACT
by Ir. Azean Abu Samad.
1. Applicability of Electricity Supply Contract
When you opened an account with TNB, you signed a contract called Electricity Supply Contract (ESC). The terms and conditions in the ESC shall be applicable concurrently with SARE contract.
2. Contract term
SARE contract will take effect from Execution Date and continue to take effect for a term that has been agreed between customer and asset owner. A typical term is between 15-25 years after which the solar PV system belongs to customer.
3. Billing and payment
TNB will issue a billing invoice to customer monthly and the customer has 30 days of the date of the invoice to make payment. In addition, just like your normal electricity bill, should you make late payment, a 1% late payment fee will be charged on the outstanding amount. In the event of non-payment, TNB will issue disconnection notice and may disconnect your electricity.
The Solar Energy Meter must be paid by Asset Owner and transferred to TNB. TNB shall then inspect, maintain, calibrate and/or test the Solar Energy Meter. The customer shall not tamper or modify the Solar Energy Meter.
5. Supply disconnection
To protect both customer and Asset Owner, TNB has the right to disconnect supply of solar photovoltaic energy and electricity supply from the grid under emergency condition or for the purpose of maintenance, repair, inspection and/or testing. Disconnection shall also occur if the customer fails to make payment, termination of contract and/or breach of any provisions in the Electricity Supply Act.
6. Solar Energy Rate
Solar Energy Rate (Sen/kWh) is the rate at which the customer has agreed to pay to Asset Owner for every unit of energy the solar PV system generates. Also look out for if there is any Minimum Monthly Charge. Typically, it is set to RM 0.
7. Environmental attributes
The value of any credits or financial benefits for reduction of green house gas emissions, also known as Renewable Energy Certificates (REC), belongs to the agreed party – either customer or Asset Owner, depending on the arrangement between the two. Find out more about REC here.
8. Solar PV system buyout
Customer has a choice to buyout the solar PV system anytime during the term of the contract. Your Asset Owner will include a buyout table in the SARE contract that varies according to which year of the contract term you wish to purchase the system.
9. Representation and warranties
Under this clause, it specifies that the customer shall have full control and possession of the premise and maintain sufficient insurance. In the event that the customer wishes to sell the premise, the customer can novate the contract to the new buyer.
This is just the summary of salient terms in SARE contract to help you understand. For full terms of the contract, you can request a copy of the contract from your potential Asset Owner.