tax incentives for green technology in Malaysia

Tax Incentives for Green Technology in Malaysia

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Malaysia Government will provide tax incentives for the purchase of green technology equipment, besides giving tax exemption on the use of green technology services.

With these tax incentives, it will allow small and medium enterprises to grow the Renewable Energy market. The main purpose of the Malaysia Government is to attract potential investors and industry players to invest in Renewable Energy.

In addition, the Malaysia government wants to motivate companies to acquire green technology assets and of course, to enhance the number of green technology service providers.

The three groups under the Green Technology Tax incentive: 

  1. Green Investment Tax Allowance (GITA) Assets
  2. Green Investment Tax Allowance (GITA) Project
  3. Green Income Tax Exemption (GITE) Services

Green Investment Tax Allowance (GITA) Assets

GITA Assets are for companies that acquire qualifying green technology assets and there are listed under MyHIJAU Directory. Companies should comply with ALL of the following criteria:

  • The companies should minimise the degradation of the environment or reduce greenhouse emissions.
  • They should promote health and the improvement of environment 
  • They need to conserve the use of energy, water and other forms of natural resources, or promote the use of renewable energy, or are able to recycle waste material resources. 

The Rate of Incentive

  • Green Investment Tax Allowance (GITA) of 100% of qualifying capital expenditure incurred on approved green technology assets from the date of purchase until 31 December 2020.
  • The allowance can be offset against 70% of statutory income in the year of assessment.
  • Unutilised allowances can be carried forward until they are fully absorbed.

Green Investment Tax Allowance (GITA) Project

GITA Projects are for companies that undertake a qualifying green technology. Companies should comply with ALL of the following criteria:   

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

Application should be received by MIDA until 31 December 2020.

Rate of Incentive

  • Green Investment Tax Allowance (GITA) of 100% of qualifying capital expenditure incurred on green technology project from the date of application received by MIDA until the year of assessment 2020.
  • The allowance can be offset against 70% of statutory income in the year of assessment.
  • Unutilised allowances can be carried forward until they are fully absorbed.

Green Income Tax Exemption (GITE) Services

GITE Services is for companies which provide green technology services which have been verified by GreenTech Malaysia, and listed under the MyHIJAU Directory. Companies 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.

All applications must be submitted to MIDA before 31 December 2020. 

Rate of Incentive

  • 100% of statutory income from the date of application received by MIDA until the year of assessment 2020 (the maximum period is 5 years from the date of commencement).

Qualifying Activities

For SEDA, there are two main qualifying activities to be approved for the tax incentives:

  1. Renewable Energy: Commercial and industrial business entities which undertake generation of energy in the form of electricity, steam, heat and chilled water using renewable energy resources such as:
  1. Solar Power (including NEM)
  2. Biomass
  3. Biogas
  4. Mini hydro
  5. Geothermal

*Note: Projects which have been approved with Feed-in-Tariff (FiT) for solar by SEDA are not eligible for the Investment Tax Allowance.

2. Energy Efficiency: Companies invest in energy efficient equipment or technologies and invest in energy saving equipment.

In a Nutshell 

Right now, the entire solar power industry in Malaysia is producing 67% of the 270MW of renewable energy.

There are several solar farms in Malaysia that sells electricity to the grid. Solar farms are designed to produce enough electricity power for thousands of homes and businesses.

If you have never seen one, they are just like the solar panels you install on your roof to generate electricity for your needs.

It’s important to start using renewable energy sources now because they provide clean energy for our lives and reduce climate warming and pollution; and by reducing the use of oil and gas, we can reduce the risk of cancer and heart attacks. 

Interesting Facts about Solar Energy

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There are many things that may surprise you about solar energy. To start with, the solar industry is now in almost every country and it is finally ready to stand on its own.

More and more people are choosing solar energy at a faster rate than ever before in Malaysia.

This explosive growth of solar power comes as a result of the falling cost of solar panels and the many benefits of this renewable energy source.

Are you ready to go solar? Here are 7 interesting facts that you need to know.

7 Facts about the Solar Industry

1. Energy Source

The sun, is without a doubt the biggest and most abundant energy source for earth. In Malaysia, the entire solar power industry is producing 67% of the 270 MW of renewable energy, right now.

The sun sends 173,000 terawatts continuously; and it could potentially satisfy the global energy needs for one year, with only the sunlight reaching the earth every hour.

2. Green Energy Source

Solar energy is a clean, renewable power source that do not lead to air or water pollution, and does not release any gases.

In addition, solar farms in Malaysia follow the environmental laws that regulate the correct disposal of any type of potentially harmful materials for the environment.

3. Good Investment

Solar panels in Malaysia are getting cheaper. The cost per kilowatt has fallen below coal and gas.

Malaysia Fit System, which aims to promote the development of renewable energy so homeowners have a chance to generate electricity and get paid for it by TNB, makes the ROI (return of investment) very attractive.

4. Long Effective Lifespan

The good thing is that once you invest in a solar power plant, it can last 40 to 50 years.

Yes, you can replace the solar panels with new, more efficient modules, and once the infrastructure is built, you will have solar energy power for a long time.

5. Solar Energy is Quick to Deploy

You can quickly build small solar plants, in a matter of weeks to restore electricity after a disaster. No other fossil power plant can be installed so quickly.

6. It can be Installed Everywhere

Solar panels systems are most effective due to constant exposure to the sun, but this doesn’t mean that it cannot generate electricity or heat when it is cloudy, raining or cold. You can enjoy solar energy in any region.

Solar panels need sunlight to generate electricity, not sun heat.

7. Largest Solar Park

The largest solar park in the world is located in the Sahara Desert. Once the project is completed by 2020, with a capacity of 580 megawatts, it will provide electricity power to 1 million people.

Malaysia largest solar farm is located on 98 hectares of land in Mukim Tanjung 12, Sepang. It uses 230,000 solar panels, increasing TNB renewable energy capacity to the national grid to 73.2 megawatts.

Even though the solar industry in Malaysia is starting to get a lot of attention, with the Government setting a target of having 20% of the country’s electricity generated from renewable sources by 2030, we are still a small fish compared to China.

China installed more than 50 GW last year. This could power 8.2 million homes.

Benefits of Solar Energy

The main benefit of solar energy is that it is truly a renewable energy source that is available every day, and in every region of the world, unlike some other sources of energy.

Moreover, we can never run out of solar energy.

Other benefits include:

  • Reduces electricity bills
  • Low maintenance cost
  • Good long-term investment
  • Government benefits
  • Can be connected to the electricity grid

Solar energy has a favorable impact on the environment, and it’s free and abundant.

So if we invest in a solar energy system, we can reduce our dependence on fossil fuels in favor of the most consistent source of energy we have, the sun.

Yeo Bee Yin

Malaysia Government Open Tender for RM 2bil of Large Scale Solar (LSS) Project

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On February 15, 2019, Yeo Bee Yin, the Energy, Technology, Science, Climate Change and Environment Minister, has called for bids for an estimated RM2 billion worth of projects under LSS3 scheme to increase the production of electricity from renewable energy.

The competitive bidding process, Yeo said, would open from February to August 2019. By the end of the year, the outcome of the exercise is expected.

Who will win this bidding exercise?

First, this is an open tender free for all. Malaysia government is looking for whichever party that can offer the lowest price for the first 500 megawatts (MW) and pass all the required financial and technical qualifications.

Yeo explained that the contractors for engineering, construction and commissioning must be 100 per cent local and added that the ownership can be up to 49% foreign.

She made it a point at the conference that the government is looking for the best price.

solar farm

To lower electricity tariffs and get better financing rates from financial institutions, the quota offered to each developer will be increased to 100 MW from 30MW for the LSS3 scheme.

Yeo also added that quotas offered to developers will no longer be based on capacity range, to allow them to bid for higher capacities.

The main purpose is that by 2030, or sooner, electricity tariffs can be lowered and become competitive against other forms of energy power such as gas and coal.

Why is this important?

Renewable energy provide tariffs that are more stable because they do not rely on market prices of fuel, and are calculated based on the levelized cost of energy.

With LSS2, the solar tariffs can go as low as 33.98 per kilowatt hour, and now with this open tender, it could go lower.

The two cycles of LSS projects had a total installed capacity of 958 MW.

The Malaysia government plans to increase the country’s electricity from 2 per cent from renewable sources to 20 per cent in 2025. This means about 3,991 MW of new energy capacity will be needed in addition to the grid.

By doing this, it will open more opportunities to incumbents and new entrants. This without a doubt will be more noticeable on the smaller players.

Solarvest Commercial / Industrial solar panel

Malaysia government also plans to increase electricity generation by other mechanisms such as feed in tariff sources, biogas, biomass, and geothermal mini hydro while promoting LSS projects.

The LSS3 project is an effort of the Malaysia Government towards the growth of renewable energy in the country. LSS projects produce 958 MW of electricity between the end of 2018 until 2020.

In Malaysia, solar energy accounts for about 67% of renewable energy capacity while biogas and biomass are the second largest with 28%.

It is expected that LLS3 will have the same success of the previous two rounds, the most recent of which saw awards for 563MW in December 2017.

The submission of proposal will close on August 19, 2019, before 5.00pm.

Solarvest solar panel installation

Can I Install Solar Panels Myself?

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Does do-it-yourself solar panel installation make sense to you? It’s not surprising that many homeowners are considering a DIY solar panel installation. Many people consider the do-it-yourself way because they want to save money.

The question remains: is it worth it?

Bear in mind that installing solar panels is completely different from installing other home improvements projects. In fact, getting solar panels up on the roof is not the biggest part of the process. Instead, it’s taking time to do research and plan every part of your system. First, you will need to understand how solar panels work and you will need to plan all the process.

When everything is ready, Solar panels offer major financial benefits because they reduce your monthly electricity costs, and can even increase the value of your property. Plus there are a lot of incentives from the Malaysia government and utility companies that can help reduce your net cost by 30 percent or more. In this blog post, we’re glad to present to you all the information you need before deciding to install it yourself.

Solarvest Choo Sui Hong 5KW LORONG BAYU MUTIARA 4

5 Step to install a Solar Panel System

  1. Determine your energy needs.
  2. Buy solar equipment: solar panels, inverters, racking, etc.
  3. Install the racking or mounts for the solar panels.
  4. Connect the solar panels to the racking equipment.
  5. Install a solar inverter.

As you can see, there are a lot of details that a professional installer can help you with. Keep in mind that your solar energy system should continue to generate electricity for the next 25 to 35 years.

If you buy a home solar kit from a store, it may be less expensive per watt, and you might not be getting the same quality equipment that solar installers are able to offer you. Additionally, solar installers buy from equipment distributors who don’t sell to the general public, so they are able to offer lower prices as they buy in bulk.

Most home solar kits are designed for off grid use. However, going off grid might not in your best interest as you should be able to access utility generated electricity at all times of the day, every day.

Installing a solar panel system is complicated, and it requires training and experience.

If you buy a home solar kit, you may be able to pay less, but don’t forget that the solar industry in Malaysia offers additional value for relatively very little additional cost.

The fact is, when you hire someone who knows what they are doing, you actually save both time and money in the long run. Professional solar installers in Malaysia have a lot of experience, something you cannot find online or in the DIY guide. They are qualified to install solar power systems so you can be sure you are working with someone who really understands the process.

Another benefit of working with a professional solar installer in Malaysia is that they will help you complete and file the permits and applications that you need to get your solar power energy system up and running. Remember your utility company won’t let you connect your solar system to the grid without a signature from a certified electrician.

Besides, your solar installer will help you with all your questions, and even assist you in finding an incentive in your area that you may have missed, so that you can save more money.

Finally, remember that almost all solar power systems offer a warranty that may only be honored if a qualified installer installs the equipment. With that being said, does it mean there is no way to save money on solar panel installation?

You can, actually. The best tips are get multiple quotations, research and consider all solar companies in your area, consider all available options, and compare costs before making a decision. In other words, the more well informed you are, the better you get to save on your solar panel installation.

Noor Complex Solar Power Plant, Morocco

Largest Solar Power Plants in the World

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Solar Power is the fastest growing energy source in the world. Today, almost every country is producing solar energy. The majority of the global solar power is coming from China, India and the US, with the Middle East coming strong.

In the past five years, solar panels systems have nearly quadrupled, going up to nearly 400GW by the end of last year. Solar energy contributed 20% of global power growth in 2018.

In Malaysia, by the year 2025, 20 percent of its energy will be from renewable sources. The renewable sources include biomass (99MW), biogas (59MW) and hydro (42MW) with solar energy being the biggest contributor — 75 percent (375MW) of the total.

The solar industry in Malaysia is expanding and is becoming an attractive investment for renewable developers. An example of this is the construction of the largest solar power farm in Sepang, Selangor, which uses 230,000 solar panels, installed in 98 hectares of land.

But where are the biggest solar power plants?

With more solar projects planned across the world, the “largest solar plant” changes continuously. Here are the largest solar plants in the world today.

Noor Complex Solar Power Plant, Morocco

Noor Complex Solar Power Plant, Morocco

Noor Complex Solar Power Plant is located in the Sahara Desert and it is the world’s largest concentrated solar power plant. The Solar Plant capacity is of 580 megawatts, and by 2020, it is expected to provide electricity for over 1 million people, once completed.


Kamuthi Solar Power Station, India

Kamuthi Solar Power Station, India

Kamuthi Solar Power Plant is located in India. Covering 2,500 acres and consisting of 2.5 million solar panels, the plant is able to power 750,000 people. The solar plant has a total generation capacity of 648MW. Every day, the robotic system that is charged by its own solar panels cleans the plant.


Solar Star Solar Farm, California

Solar Star Solar Farm

Solar Star is located in Rosamond, California, US. and the site area is 13 square kilometres. This solar plant has 1.7 million solar panels that can supply electricity to 255,000 homes. Solar Star is responsible for nearly 17% of California’s electricity supply.


Longyangxia Dam Solar Park, China

Longyangxia Dam Solar Park, China

Longyangxia Dam Solar Park is located in the city of Cixi in eastern Zhejiang in China. It has installed 300 hectares of solar panels above a fish farm. The solar plant has enough power to supply electricity for 100,000 houses and it generates 220 gigawatt hours of electricity a year.


Kurnool Ultra Mega Solar Park, India

Kurnool Ultra Mega Solar Park, India

Covering 5,932.32 acres in the Kurnool district, Andhra Pradesh, Kurnool Ultra Mega Solar Park has the capacity to generate 1,000MW. More than four million solar panels were installed in the solar power plant, each with a capacity of 315W of 320W.

The site can generate more than 8 million kWh of electricity on sunny days, meeting the entire demand of the Kurnool district.


Enel Villanueva PV Plant, Mexico

Enel Villanueva PV Plant, Mexico

Enel Villanueva solar plant is located in Coahuila, Mexico. It has over 2.3 million solar panels and is able to produce more than 1,7000GWh per year.


Datong Solar Power Top Runner Base, China

Datong Solar Power Top Runner Base, China

Datong Solar Power Plant is located in China and it can be the largest solar plant in the world once completed. The solar plant has generated a total of 870 million watts of electricity power, which is equivalent to more than 120 million watts per month.

Tengger Desert Solar Park, China

Tengger Desert Solar Park, China

Tengger Desert Solar Park is by far the world’s largest solar array. It is located in Zhongwei, Ningxia and 1547MW of solar power was installed.

The Tengger Desert covers about 36,700 km and the solar park itself occupies 1,200 Km (3.2%) of land.

The solar energy in Malaysia plays an important role in the energy mix, mainly because the sun shines all year around. In fact, this energy is much more affordable than 10 years ago.

As the solar industry in Malaysia is well established, there is a reliable and low cost supply chain for solar project developers. Steady growth is expected; projected figure is fixed at 8.5% for annual average growth rate between 2019 and 2027.

Which is more efficient

Solar power vs. Wind power: Which is more efficient?

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More and more homeowners are turning to renewable energy sources in Malaysia to provide power to their homes. The two most common ones are: solar and wind power. But which one is better?

Solar power systems use sunlight to power your home, and still allow you to sell extra energy to your utility company. Wind power produce energy from wind powered turbines.

Both depend on forces of nature, but in general, solar panels provide more consistent energy, especially in Malaysia because of the low wind speed (no more than 2 m/s).

However, there are also other differences between both of them, which play an important role when it comes to deciding which renewable energy option is best for you.

Wind versus Solar

Let’s begin by saying that the main benefit of wind over solar power for your home is that wind turbines generate power 24 hours a day, and they don’t depend on sunlight. On the other hand, solar panels only generate power during sunlight hours.

However, in order to be effective, wind turbines need to be located high above where there are no obstacles that can block the wind.

A wind turbine for residential use should be at least 80 feet tall and the average wind speeds needed is at least 12 miles per hour. This could present a problem.

Thus this type of power is great for rural area with lots of open space where there is minimum obstruction that can block the wind’s path. Wind power systems do very well in plain areas.

In contrast, solar panels can be installed on almost any roof, and on the ground. Another benefit of solar panel systems is that your solar PV system is stationary and requires limited maintenance. Solar is generally a more practical renewable option for residential energy production.

Although the sun is everywhere in Malaysia, there are some places that are more exposed than others. Thus keep in mind that geography can affect the efficiency of solar panel conversions.

In addition, pay attention to the direction in which the solar panels are installed because this can also increase or decrease efficiency. The worst enemy of solar systems is cloud cover.

Main Advantages of Solar Power

For most settings, solar power is usually the best choice. The main advantages of solar power systems are:

  • No moving parts
  • More reliable
  • Solar power systems comes with a 25-year warranty
  • Less monitoring
  • Maintenance is less expensive
  • No noise: it is totally silent in operation
  • Installation is quicker
  • Lightning and high wind damage is less frequent
  • Solar panels require less space and you can install them on almost any roof.
  • Wind turbines require more planning and building approval and their height is in most cases an issue in residential areas.
  • Wind is an intermittent resource
  • Wind power can really have a terrible toll on birds.

Main Advantages of Wind Power

The main advantage of wind power over solar is that the wind can blow at night. Another advantage in the past was that wind power was cheaper but now the cost of solar energy in Malaysia has fallen, and prices have become more competitive than wind energy.

Although both methods offer clean renewable energy, they are not on equal ground.

No matter what renewable energy option you are considering, always compare multiple offers before making final decision. Contact your renewable energy experts HERE to evaluate your situation and provide you with advice.

Remember the energy option you choose should depend on your geographical location and requirements. One thing is certain: it’s critical to select the right system based on your needs.

In conclusion, as Solar power system is becoming more advanced every day, it’s now a better choice over wind power.

Many users save thousands on electricity bills every year, not to mention the appreciation of property value as the majority of buyers are willing to pay more for a house installed with a solar power system.

solar panel roof

Can Solar Energy Save You Money Over the Long-term?

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Solar energy is a renewable source of energy. Not only it is environment-friendly, it can help to cut down on the use of fossil fuels. There are many uses of solar energy such as:

  • Home heating
  • Hot Water systems
  • Swimming pool heating and
  • Indoor and outdoor lighting

Solar energy in Malaysia is very efficient because the sun shines almost all year long.

In Malaysia, not only it is possible to generate your own electricity, in some areas, you can even sell energy back to the electric grid.

Save Money with Solar Panel Systems

Most of the time, solar panels will help you save money on electricity.

This is especially true if you are planning to live in the same house to recoup the installation costs through saving on your energy bill.

But how do you save money?

  • You won’t be using as much electricity from the grid.
  • As you may already know, the cost of electricity is rising, so when you generate your own power, you save money.
  • Due to the fact that you might not be home to use the power during the day, you can store and use it later.
  • As mentioned before, if you generate excess energy, you can sell your energy back to the electric grid. So make sure you ask your retailer how to do it, and make sure you choose a plan that suit your needs and maximise your saving.
  • More market value to your property. When you install a solar panel system in your property, you are adding market value. For example, if you are selling your property, with a solar panel system, buyers will be willing to pay for a higher price, knowing that they can save on energy in many years to come. If you are renting out your property, tenants will be willing to pay for a higher rent because with solar panels, they will save on their electricity bills every month.

Before installing a solar panel system, it is important to consider these factors:

Energy Consumption

To know which type of solar panel system you need, take a look at your electricity bill to find out how much electricity your household consumes on a regular basis.

Running Patterns

It is very important to know exactly when you are using your solar panel system.

For example, if you consume most of your solar energy when your panel is supplying all your power needs, then you are not using power from the grid, and you will not be paying for your electricity during these hours.

On the other hand, if you are using less than what you produce, inform the grid and you can get a credit on your bill according to the applicable feed in tariff.

Feed-in tariff

Feed-in tariffs in Malaysia depend on your retailer, so make sure you ask them before you install any solar power system.

The rates are fairly good, particularly for PV, and they’ve also outlined various bonus amounts that apply if the generator meets certain criteria.

Size of your Solar Power System

The larger the solar power system, the more energy you will generate, and the more money you can save over time.

Since a larger solar power system will also cost more, make sure you know your household’s power needs to decide on the size of your system.

Location

Another aspect you should consider is where you live. Remember in Malaysia, the sun shines all year long, but the climate vary depending on which region you are.

So the same system is likely to yield more solar power depending on the region you live.

Other factors to consider are electricity prices and upfront cost of installation.

Generally, the higher electricity prices are, the more money you will save with solar panels.

And of course it is very important to know the upfront cost of installation, so that you can decide if it is worth it or not.

 

So all in all, is it worth it to install a solar panel system? The answer is a resounding YES.

Not only it will save you a lot of money, it will increase your property value.

Just make sure you consider your consumption habits and patterns, where you live, and don’t forget to ask your retailer for feed in tariffs.

solar farm

Solar Farms in Malaysia

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A solar farm is designed to produce enough electricity for thousands of homes and business. They are just like the solar panels you install on your roof to generate power for your individual needs.

Solar farms in Malaysia usually sell electricity to the grid. However, in order to sell power to the grid first you need approval from SEDA.

Malaysia in recent years has become one of the largest solar PV manufacturers in the world.

It has one of the most resource-efficient solar farms in the world. One of the biggest is in Ayer Keroh with 29,092 solar panels, generating enough energy to power 1,800 houses every day.

The entire solar power industry in Malaysia is currently producing 67% of the 270MW of renewable energy.

The majority of solar farms in Malaysia are owned by independent power producers that benefit from:

  • Excellent Feed in Tariff Scheme: FiT was launched in 2011 to enable companies and house owners to produce clean energy from four sources and sell it to the grid:
    • Solar Photovoltaic
    • Biogas: organic waste, and landfill
    • Biomass: agricultural waste and garbage
    • Small Hydropower
  • Tax breaks
  • Fair regulation
  • Banking loans
  • Competitive labor costs
  • Excellent infrastructure, and
  • Amazing geographical location.

To develop a solar farm you need approximately 2.5 acres of solar panels in an area with high sun exposure to produce a megawatt of electricity. If your solar farm is located in an area with moderate sun exposure you need five acres of panels to produce a megawatt.

A megawatt in one million watts, this is enough to give electricity to 650 residential homes for one day.

How does a Solar Farm work?

To convert the sun’s energy into electricity, you need a PV system with the following components:

  • Solar panels that are installed in your land to convert sun´s power into DC power.
  • Electrical panels is where AC power travel to the electrical cabinet.
  • Utility Meter to measure your electricity supply.
  • Utility Grid, this will ensure that you stay connected to the utility grid.
  • Energy monitoring to monitor your electricity usage.

The cost of a solar farm depends on several factors, including size, installation complexity, the location and orientation of the solar farm, how much sunlight the farms get, the efficiency of the solar panels, and the efficiency of the inverters.

You may always contact us for more details.

 

Benefits of Solar Farms

No Pollution

Using solar energy is the best way to reduce carbon emissions, helping global warming as Solar farms distribute clean energy.

In addition, they use very little water compared to traditional power plants.

Great Return of Investment

You will save in your utility bill, maintenance costs and you will receive an income. Plus the solar feed in tariffs are applicable, making solar farming easier than before.

Habitat for Wildlife and Plants

Solar farms are great at providing a better habitat for wildlife and plants. This is because the land around solar panels is generally grassland.

No noise

Solar farms have no moving parts, so they do not produce any sound, and they can be developed close to any local environment.

 

Disadvantages of Solar Farms

High cost

The initial cost is high. Purchasing the solar system is very expensive, even though the prices of solar panels are lower than few years ago.

Weather

Solar farms efficiency depends on the weather. Yes, solar energy can still be produced during cloudy and rainy days, but the efficiency of the solar system drops.

The Need of Big Space

The more electricity you want, the more solar panels you need, and this means more space.

Solar energy is a renewable source of energy and could likely be the future of global energy source. In fact, many scientists predicted that solar energy will be used more and more, and will contribute to a quarter of the world’s energy in the future.

How Much Electricity Does a Solar Panel Produce

How Much Electricity Does a Solar Panel Produce?

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The amount of electricity a solar panel produces depends on three things:

  • Size of the panel
  • The efficiency of the solar cells inside
  • Amount of Sunlight the panel gets

What is a Solar Panel?

A solar panel is a photovoltaic panel designed to absorb the sun ray to produce electricity or heating. The typical solar panel is about five and a half feet tall and 3 feet wide.

Each solar panel has approximately sixty little squares. These squares are individual solar cells, which are linked together by wires.

Inside each individual solar cell is where the electricity is made; electricity is then carried by the wires to a junction box where the panel is hooked into a larger array. The amount of power a solar panel makes is based on the wattage of the solar panel.

The residential solar panels available in 2018 contain 60 solar cells joined together to produce around 260-300 watts, or they could have 72 cells joined together to produce between 360-400 watts.

The higher the wattage of a solar panel the more electricity it produces because it has access to more solar irradiation.

The amount of electricity solar panels produce also depends on average sunlight over the course of a year. To know this you need to find your place on the globe to see if your area is more cloudy, and therefore less available energy from the sun to convert into electricity.

Malaysia, for example, is a great place to produce solar energy. That is why the solar industry in Malaysia is expanding with several solar power companies and solar farms.

In Malaysia by February 29, 2018 the solar power capacity was at 140MW out of a total of 311.6MW, and the number of applications for solar as a source of power was 348 out of 377 applications under the Fit according to SEDA. This could give you an idea of how big the industry is in Malaysia.

How many solar panels are needed to power an average house?

The average house uses about 900 kWh per month. This is a lot and you can really save a big amount of money by using solar power.

So how do you calculate how many solar panels you need? Let’s take 900 kWh and divide by the amount of kWH one solar panel produces, that is around 30 kWh monthly. You will need 30 panels to produce 250 watts per panel to produce 7,500 kW.

Of course, before you install your solar panels, it’s recommended to consult a solar company. The expert will tell you how your solar power system should be depending on how much devices you use and your lifestyle, for example:

  • Light Bulb uses 60 watts
  • Laptops use 45 watts
  • Desktops between 150-300 watts
  • Window air conditioning range between 500 and 1500 watts
  • Central air conditioning can use 3500 watts.

All those devices add up with variations. Most of your electricity usage probably happens at night, but if you work at home this could change. Your solar installer will talk to you about all of the options.

How to Store Energy

Solar panels only generate power as the sun shines. This mean you will need a way to store the energy. One solution is to use a battery, but the majority of people prefer to stay connected to the grid. This option is easier and cheaper.

If your solar panels are producing more power than you are using, the excess power will go back into the grid. You can pull energy from the grid at night, or anytime you need extra power.

If you use a grid-connected system, you don’t have to worry if you need more power than your solar system provides. Make sure you talk to your solar installer about all the options, and which one is best for you and your home.

types of solar power systems

Types of Solar Power Systems

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Malaysia is the perfect place for the generation of solar power. Malaysia’s location, which is near the equator, receives between 4,000 to 5,000 Wh per square meter per day.

With its unique advantage, the solar industry in Malaysia has grown in the last years, with the creation of solar farms and other solar power companies. Solar farms in Malaysia are considered one of the most resource-efficient in the world.

Some of these solar farms produce enough energy for 1,800 houses every day.

Are you aware that there are different kinds of solar power systems? In fact, the most common types of solar energy systems for homes are grid-connected, grid-connected with energy storage, off-grid, and DC systems.

The most common type among the four is the Grid-connected system, although grid connected with energy storage is becoming very popular despite the high cost of building it.

Let’s discuss more about the different types of solar power systems.

 

1. Grid-Connected System

This type of solar panel system is the most common one. It is connected to your local electric grid and your home. If your array generates more energy than what you use, it sends the excess back to the electric grid.

This way you are selling your extra solar power back to the utility company where it can be used by your neighbours or others.

This type of system requires a few panels, wiring boxes and disconnects and an inverter. Also, you have to make an interconnection agreement with the local utility company.

Advantages

  • Initial Cost: Purchasing a solar power system for your home can be very expensive. But grid-tied systems are much cheaper since they use less equipment than the other types of rooftop solar power.
  • Low Maintenance: The operating cost of grid-tied systems is very low. Solar panels have 20 to 25 years of warranty.
  • Reliability: Grid-tied system is simple and can have no downtime (without electricity).
  • Flexibility: You have the chance to design your system with an alternative energy source and a utility source. This way you can change the system to meet your needs in the future.

Disadvantages

  • The setback of this type of solar power system is that when the sun goes down, you are not able to use any of the energy that the solar panels produce. This can also happen if your electric grid is down; your solar panels will be shut off automatically, too, leaving you without energy.

 

2. Grid Connected Solar with Energy Storage

This type of solar power system is also known as hybrid solar. In the last couple of years, this energy system is becoming very popular, even though it’s more expensive.

It is similar to the grid-connected residential system, but comes with an energy storage system usually in the form of battery backup.

The hybrid system consists of a PV array, a charge controller, a battery bank and inverter and in some occasions a tertiary power source like a wind turbine or a gas generator.

Advantages

  • Energy Storage System: If your solar power system produces excess energy, it can be stored in the battery. So even if there is no sunlight, you can still power your home with solar power. If there is a power outage, your home will still have power for hours.
  • Save Money: The battery can provide additional opportunities to save money because your energy storage system can make sure you are using its power instead of the power of the grid.

Disadvantages

  • Cost: The system costs more because you need to change the batteries regularly. Although the cost of batteries has gone down in recent years, they still need to be replaced at some point.
  • High-Level Expertise: This solar power system is more complex so you may require a solar installer with a higher level of expertise to design and install. So make sure you find out from your solar power company if they install this type of system.

 

3. Off-Grid Residential Solar Panel System

The off-grid residential solar panel system is a lot like the hybrid system. It also uses solar panels and an energy storage system.

The off-grid system is installed in very rural, remote areas, where it is expensive to run a power line to a home.

The system is more expensive because it is bigger since it’s not connected to the electric grid. This requires more solar panels and batteries.

Advantages

  • Independence: One of the best things about this type of solar system is that you don’t depend on the utility company. You are not subject to the terms and policies of the utility company.
  • No Blackouts: Another benefit is that when everyone else has no electricity, your home will still have full power. This is very important with people with health conditions that require electronic devices or refrigerated medicines.
  • No Electricity Bills: Because you are producing your own electricity you will never again have to pay a bill to the utility company.

Disadvantages

  • Higher Initial Cost: If you don’t have a connection from the utility company, you will need a backup battery when there is no sun. Adding this source of backup will increase your solar costs.
  • Limited Solar Energy Storage: If the weather is cloudy for a few days and you don’t receive any sun, you may run out of stored electricity.
  • Energy Efficiency is a Must: You need to be very careful about your energy, or you may not have enough power for your home.

Should you go off-grid with solar power? Well, that depends on your main motivation.

If you want to produce your own energy, want an end to blackouts or eliminate your electricity bills, having this type of solar power may be right for you. It’s also highly suitable for those who don’t have any electricity connected to their home.

But if you just want to save some money, it can be more feasible to consider a grid-tied photovoltaic system instead.

4. DC Solar Systems

DC Solar System will power an RV or cabin, but this type of solar system doesn’t typically power a whole house. It differs from grid-connected solar power system because DC solar systems don’t use an inverter to convert DC electricity produced by the solar panels to the AC electricity used in most homes.

Instead, it provides electricity to DC appliances and/or a battery bank. This is the most basic type of solar power system, and it is intended to be used only when the sun shines. The system is very affordable and easy to install.

However, once the sun goes down, the power stops. It is perfect for remote locations that require low voltage. You can use this type of solar power system for certain things like:

  • Water Pumping applications
  • Venting Fans
  • Certain Electronics.

Advantages

  • High System Efficiency: Because there is only one conversion, DC Solar System is more efficient.
  • Simple Installation: A DC system can use only one inverter, which means simpler installation.
  • Easy to coordinate: Because DC system only has one inverter, it is easy to coordinate advanced functionalities that are required in some locations.
  • More energy to the battery: As the energy flow is not limited by the inverter capacity, the system is able to route more energy to the battery.

Disadvantages

  • High cost: You will need to spend a considerable amount to buy a DC solar system.
  • Solid sunlight required: DC system will only work when the sunshine is solid. You can use DC system when there is no sun, but the battery will need to be fully charged by the sun.

These are the four different types of solar panel systems that are available for homes.

To know which type to use for your house, review your requirements with a professional solar installer who will be more than happy to explain to you and offer you the available options.