Malaysian Manufacturers Seek Government Review of New Solar Guidelines

The Federation of Malaysian Manufacturers (FMM) has urged the government to reassess the recently introduced solar energy guidelines, highlighting concerns over additional costs and potential investment slowdowns.

FMM President Soh Thian Lai warned that the new terms, implemented by the Energy Commission on January 1, could discourage large-scale energy consumers from adopting solar power. He estimated that the policy changes might lead to delays in projects worth approximately RM2 billion.

While acknowledging the government’s positive step in expanding the SelCo programme—removing the 85% demand capacity cap for non-domestic users and permitting ground-mounted and water-based solar panel installations—FMM raised concerns about the imposed standby charge. The current RM14 per kWp fee for non-domestic solar systems above 72kWp, Soh argued, does not fairly reflect solar energy’s intermittent nature, as solar panels typically generate power for only 3.5 hours per day.

Additionally, FMM has called for flexibility in the battery storage requirement, which mandates 1kWh of storage per 1kWp of installed solar capacity. Soh suggested that businesses opting out of battery installations should pay a more reasonable standby charge, while those who invest in storage systems should be exempted.

FMM has engaged in discussions with the Ministry of Energy Transition and Water Transformation, as well as the Energy Commission, to address these industry concerns.