To encourage more individuals or more companies to generate Renewable Energy and adopt Energy Efficiency, Malaysian Government has offered attractive incentives to energy producers and users. These incentives include the following:
- Profit on Generated Electricity
- Investment Tax Allowance (ITA)
- Pioneer Status
- Import Duty or Sales Tax Exemption on spare parts, materials, and etc.
FiT Incentives for Individuals Installing Renewable Energy technology such as Solar PV provides incentives for individuals, like you, which goes with feed in tariff rates. Incentives that you could get by selling your generated electricity to Tenaga Nasional Berhad on a premium that is at least 4 times more than the rate of electricity that you buy from Tenaga Nasional Berhad. FiT Incentives for Companies or Business Entities Companies or business entities could also get incentives by generating energy using RE technology, particularly Solar PV. However, unlike for individuals, which only have a single choice in terms of incentives, companies can apply for various incentives such as:
- Investment Tax Allowance or ITA – Under Investment Tax Allowance, the 100% of qualifying capital expenditure that has been brought upon the company within 5-year period can be used against 100% of statutory income for every year of assessment.
(Where, qualifying capital expenditure means the amount of capital expenditure incurred by the company during RE installations or for any purposes related to RE activities; this may include the amount incurred on plant and machinery, on buildings, etc.)
- Pioneer Status – Pioneer Status provides income tax exemption of up to 25% (from year 2009 and beyond) on 100% of statutory income for 10 years.
(Where, the tax exemption will start from the date the company had its first invoice by selling generated energy)
- Import Duty or Sales Tax Exemption – Companies could also get an Import Duty and Sales Tax exemption on imported equipment that has been used in generating energy from an RE technology that are not being produced locally. For local purchases, though, of an equipment, spare parts, machinery, etc, a full sales tax exemption is given to companies or business entities that chose to generate RE.
(Where all the exemptions are given within a year starting from the date MIDA – Malaysian Investment Development Authority has received the application)
Companies and other business entities are encouraged to apply for these various incentives which will be extended until December 31st 2015 according to Budget 2011 announcement. FiT Incentives for Manufacturers and Third-Party Distributors Exemptions on import duty and sales tax to manufacturers and third party distributors has been extended by the Budget 2011. This goes as follows:
- Exemption on import duty and sales tax on Solar PV system which are given to importers; may also include PV service providers that are approved by Energy Commission.
- Exemption on sales tax on solar heating system machinery, equipment, etc, purchases from a local manufacturer.
All applications for import duty and sales tax exemptions for both imported Solar PV system and solar heating system equipments should be submitted to the Energy Commission, providing a copy to SEDA Malaysia. These applications can be made on Malaysian Investment Development Authority (MIDA) Form PC Services (10.3.2009). For further details on various incentives and procedures involved, download Handbook for Incentives for RE & EE in Malaysia. Learn more about FiT Rates and FiT RE Quota for Solar PV installation for different categories and know how much you could earn. source: www.seda.gov.net