Malaysia’s Feed in Tariff System Overview

Through the years, there’s boundless support for using low-carbon energy sources. However, when the recent renewable energy technologies have entered the electricity market, they’ve been disregarded and are often non-competitive with the existing fossil-fuel based products. Due to this, Feed in Tariff policy was designed to bring renewable energy technologies, particularly solar PVwind power, and tidal power to market.

What is Feed in Tariff?

A Feed in Tariff (FiT) is a policy or program created to advance or increase investments in renewable energy sources. It typically offers long term agreements to renewable energy producers based on their particular pricing and generation costs for each technology such as wind power, solar PV, and tidal power. FiT’s offer of long term agreement and guaranteed pricing promotes diversity in renewable energy technologies, while securing producers’ return of investments at the same time.

To encourage more individuals to generate their own electricity, Feed in Tariff Scheme or Clean-Energy-Cash-Back Scheme was created. Under this scheme, renewable energy generators will be paid an amount for the renewable energy their system (e.g. solar PV) has produced. Such generators can be some private investors, business owners, homeowners, or even farmers.

How it Works

The idea of FiT is to let you earn not only to pay for installation costs, but to make profits as well for making the investment. Its aim is to reward you whenever you generate electricity. If you’re eligible to produce renewable energy, you will be allowed to sell electricity to the national security grid. The government or your electricity supplier will then pay you a certain amount per kWh of electricity you generate. Typically, the rates are high enough to let you regain the money you spent for the technology with guaranteed profits at the same time.

How Much You Could Get

The amount that you can earn depends on the type of technology and the size of the system you’re using to generate renewable energy. But in any case, FiT guarantees payment for all electricity your system has generated (Generation Tariff), plus an additional payment for exported unconsumed electricity to the national security grid (Export Tariff).

To estimate how much you could get or how much income you can earn, you may use Solar PV Feed in Tariff Calculator if you’re planning to install Solar Panels, or Cashback Calculator for Wind Power or Tidal Power.