Benefits of NEM Towards Residential & Commercials

Benefits of Residential Solar

  1. Reduce electricity bills

  2. Hedge against rising electricity tariff

  3. Increase property value

  4. Utilise existing roof space

  5. Protect the environment

  6. Modern exterior view

  7. Smart Energy Management

Benefits of Commercials & Industrial Solar

  1. Investment Tax Allowance (ITA) from MIDA

  2. Reduce electricity bills

  3. Avoid maximum demand penalty

  4. Enjoy double tax deduction

  5. Contribute to Green Building Index (GBI)

  6. Lower financing cost under the Green Technology Financing Scheme (GTFS)

Maximum Demand Charges

The electric utilities must maintain sufficient generating capacity and transmission capacity to supply a customer’s peak demand at any given time. Most of the time the utility’s generating and transmission capacity sits by idly waiting to spring into action whenever customers demand it. It is expensive to maintain that excess generation and transmission capacity. Utilities charge customers for the costs of having power ready on demand at any time through the demand charge.

Solar power systems can counteract high demand charges in the following way:

  1. Solar power systems only generate energy when the sun is out, but if a business’ main demand occurs during the daytime hours that a solar system is producing, the business may be able to draw most or all of its electricity needs from solar.

  2. If a business is able to draw most or all of its energy needs from solar, it may help reduce the rate of demand at which the business draws electricity from the grid.

  3. Solar produces at times of peak demand when demand charges are most often at their highest rates. If demand can be reduced during those hours consistently, month after month avoiding a spike in demand, overall demand charges may be reduced.

  4. Solar may allow business to switch to different rate schedules with higher energy usage costs, but lower demand charges. This may be advantageous since solar can be offsetting the higher energy usage costs and any spikes in demand will be less costly if the demand charge rate can be lowered.

Tax Incentives

Malaysia offers a wide range of tax incentives ranging from tax exemptions allowances based on capital expenditure to enhanced tax deductions.

Where income is exempted, tax exempt dividends may be paid out of the exempted income. For incentives by way of allowances, any non-utilized allowances can generally be carried forward until fully utilized.

These incentives are generally available for tax resident companies.