Malaysia to Tax High Energy Consumers to fund Green Energy

Malaysia is one of the biggest hubs of solar manufacturing in the world through aggressive government support programs and tax holidays.It is home to the biggest manufacturing site for the world’s most valued solar company First Solar and has been the preferred choice for solar investment from leading global solar companies .The Reasons behind Malaysia’s Success is government support in the forms of tax breaks,loans,simple regulation and low labor costs.While many of these subsidies have been given by other countries like Singapore,Malaysia has done it with a finesse and dedication that has made it a winner.Many world class companies have started solar manufacturing operations in Malaysia like Flextronics,Q-Cells,Sunpower and First Solar.The country has been planning to implement an ambitious Feed in Tariff program to subsidize Renewable Energy generation.The country has been inspired by Germany whose FIT policy has led it to become the largest solar generating country in the world despite its low solar radiation.

Funding of Green Energy can be expensive as most cleantech sources have higher costs than fossil fuel energy.This can place a high burden on poor developing countries and is the main reason why China has not implemented a national FIT policy.Note South East Asian countries like Phillipines,Thailand are all promoting renewable energy  through different schemes as fossil fuels become increasingly scarce and expensive.Malaysia is proposing to impose a tax on high energy consumer in order to fund the FIT coffers.he government will be introducing a one per cent additional collection on monthly electricity bills, with a usage of more than 300kWh, to be channelled to the RE fund.

Renewable Energy To Get A Boost

To promote the diversification of energy sources, particularly the optimisation of renewable energy (RE), the government will be introducing a one per cent additional collection on monthly electricity bills, with a usage of more than 300kWh, to be channelled to the RE fund.
Considering that the cost of generating RE — a clean energy — is very much higher than the cost of generating electricity from fossil fuels, the government had decided to introduce the additional one per cent collection to contribute to mitigate the cost of RE generation, said the Minister of Energy, Green Technology and Water Datuk Seri Peter Chin Fah Kui at a joint press conference held with Minister in the Prime Minister’s Department, Tan Sri Nor Mohamed Yakcop, here Monday.
The collection which will become effective September 1, will be used for the Feed-in Tariff (FiT) cost which is a mechanism where energy from RE sources produced by independent and individual producers can be sold to electricity companies at a retail price for a fixed period of time.