Solar Panel Loans and Incentives for Homeowners in Malaysia

If you are considering investing in a solar panel system to lower electricity bills, you are on the right track. However, as you may already know, they can be expensive.

The good news is that in Malaysia, the government and utility companies such as Tenaga Nasional Berhad offer programs and incentives for switching to solar power systems.

All of these programs and incentives were created for solar panel manufacturers, and users who use solar energy in Malaysia.

Solar Energy Incentives

1. Feed-in Tariff

Since 2011, Feed-in Tariff is available in Malaysia to increase investment in renewable energy sources.

So, what exactly is Feed-in Tariff?

Malaysia’s Feed-in Tariff system grants you the opportunity to sell your energy produced using solar system to the utility grid (TNB) at a premium rate.

And the great thing about it is that it guarantees investment returns as the government offers long-term agreement up to 21 years wherein you will be paid an amount for the energy you generated.

So the next question is, who can apply the feed-in tariff?

Anyone, including private investors, business owners, homeowners or farmers.

2. Tax Exemption

Green Income Tax Exemption – GITE (Services)

For Renewable Energy, Energy Efficiency, Green Building, Green Data Centre, Green Township, Certification/Verification Bodies and Electric Vehicles (EV), tax exemption is applicable for 100% of statutory income from the year of assessment where the date of application received by MIDA until the year 2023.

Companies undertaking solar leasing activities will enjoy a 70% income tax exemption of up to 10 years.

Eligibility

Green Income Tax Exemption given to qualifying companies which provides green technology services which have been verified by GreenTech Malaysia and been listed under the MyHIJAU Directory.

For a company which undertakes green technology services activities, the company must meet the criteria of green technology service providers as follows:

• At least one competent/qualified personnel in the respective green technology;
• Must have a green policy related to the environmental or sustainability; and
• 100% income must be derived from the respective green technology services.

Note :
• Competent personnel are defined as holding a certificate of competency as a service provider in the related field of green technology. The certificate must be recognised by the Government or a Professional Body in Malaysia.
• Green Policy is a statement about the commitment to sustainability and environment management by the company.

The application must be submitted to MIDA before 31 December 2020.

Full guidelines can refer to https://www.myhijau.my/wp-content/uploads/2019/05/Guidelines-for-Green-Technology-Tax-Incentive-Rev.1-March-2019.pdf

Green Investment Tax Allowance – GITA (Project)

The following — Renewable Energy, Energy Efficiency, Green Building, Green Data Centre and Integrated Waste Management Activity — will be eligible to GITA Investment Tax Allowance (GITA) of 100% of qualifying capital expenditure (QCE) incurred from the date of application received by MIDA until the year 2023.

Eligibility

Companies which undertakes a qualifying green technology project and complying ALL of the following criteria:-

• minimise the degradation of the environment or reduce greenhouse emission;
• promotes health and improvement of environment; and
• conserves the use of energy, water and/or other forms of natural resources or promote the use of renewable energy or able to recycle waste material resources.

Applicable for applications received by MIDA between 25 October 2013 to 31 December 2020.
Projects must obtain a Conditional Approval Letter from MIDA.

Full guidelines can refer to https://www.myhijau.my/wp-content/uploads/2019/05/Guidelines-for-Green-Technology-Tax-Incentive-Rev.1-March-2019.pdf

Solar Panels Loans

Solar panels can be expensive but they are worth it. Many homeowners use personal loans to buy solar panels for their homes. Besides personal loans, there are other options you should take into consideration to see if they are a better deal for you.

1. Lenders

As having a solar panel system in Malaysia can be considered a part of home improvement, some lenders are willing to offer a solar loan to raise the value of the property.

2. Home Equity Line Of Credit

Here you use your home to secure a line of credit. The best way to use it is by borrowing only what you need to install your solar panel system, repay it, and you can borrow again later if you need to.

3. Home Equity Loan

With this type of loan, you use the value of your home as collateral. In most cases, you can borrow 100% of your equity up to 80% of the appraised value of your home.

4. Saving

If you are planning to buy a new solar panel system, the best way to do it is by using your own savings. While saving for your future home, factor in the investment you need to install a solar system. With this, repayment is not necessary, and you will receive the incentives free and clear.

Takeaways

Keep in mind, that there are many options to choose from, if you are looking to buy and install a solar panel system in your home, including taking out a personal loan or paying cash. Expect to see immediate returns on your investment by saving money on your utility bills.

Before making any decision, make sure to check out all the options available to find the best rates and loan terms. It is important to compare the personal loans available from all lenders, including those offered by solar panel Malaysia suppliers.

*Looking for international solar loans that offer solar panel financing? Check this article from Lendedu.