Feed-in Tariff for Solar Photovoltaic: Money From the Sun?

Abu Bakar Munir1, Siti Hajar Mohd Yasin2, Firdaus Muhammad-Sukki3,
Siti Hawa Abu Bakar4, and Roberto Ramirez-Iniguez5


Climate change is the greatest ‘market failure’ the world has seen. This has stimulated policy makers around the world to turn into renewable energy. As a result, renewable energy is indeed the order of the day and the sun is the most powerful source of energy that God has blessed mankind with. This is a natural resource, freely available and will be replenished as long as the sun shines. The sunlight, or solar energy, can be used for heating, lighting and cooling homes and other buildings, as well as for generating electricity, water heating, and a variety of industrial processes. The importance of solar energy is reflected in the following statements of the Prime Minister of India, Dr. Manmohan Singh:6

“Over a period of time, we must pioneer a graduated shift from economic activity based on fossil fuels to one based on non-fossil fuels and from reliance on non-renewable and depleting sources of energy to renewable sources of energy. In this strategy, the Sun occupies centre-stage, as it should, being literally the original source of all energy.”

Although renewable energy and solar power are not the panacea to the world’s problem of climate change, there is no doubt that they play a major role in the global energy supply and help to mitigate climate change. In this regard, Feed-in Tariffs (‘FiTs’) have become the most important driving force behind many renewable energy deployments, globally. Feed-in Tariffs work because they are more equitable than other policies. They enable everyone — including individuals, homeowners, organisations, communities and businesses, who have not traditionally engaged in the electricity generation — to profit from the renewable energy market. This paper examines the FiTs in relation to renewable energy, specifically solar photovoltaic (‘PV’) in Malaysia. It investigates whether the recently introduced FiTs, through the enactment of the Renewable Energy Act 2011, would persuade Malaysian households to take advantage of the scheme. The paper analyses whether house owners would eventually shift to PV to power their houses and invest their money on that and be rewarded at the same time.

1Professor of Law, Faculty of Law, University of Malaya, Malaysia
2Associate Professor of Law, Faculty of Law, Universiti Teknologi MARA, Malaysia
3PhD Researcher, School of Engineering and Built Environment, Glasgow CaledonianUniversity, United Kingdom, Lecturer, Faculty of Engineering, Multimedia University, Malaysia
4PhD Researcher, School of Engineering and Built Environment, Glasgow Caledonian University, United Kingdom
5Lecturer, School of Engineering and Built Environment, Glasgow Caledonian University, United Kingdom
6Dr Manmohan Singh, Prime Minister of India, launching India’s National Action Plan on Climate Change on June 30, 2008.

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