Sunny Future For Solar - Daniel Ruoss, Envision

Daniel Ruoss, Managing Director of Envision and a consultant and advisor on solar energy solutions, gives some insights into the solar energy industry in Malaysia.

Salient points are:

1. Global demand for solar energy is estimated to be worth RM150 billion and Malaysia is poised to become a major player. In 2009, Malaysia's market share is 7% (fifth largest producer). It has the potential to go up to 11% in 2010 when the solar energy companies ramp up production. China is the production leader with a 40% market share.

2. In terms of cost, solar energy can be at parity with power from conventional sources like fossil fuels if subsidies for the latter are removed not just in Malaysia but also others parts of the world. He believes Malaysia could get there in five years if there is earnest effort to remove subsidies.

3. Europe is the biggest consumer of solar energy due to incentives given to solar energy producers and also the introduction of a feed-in tariff system.

4. Under the feed-in tariff system, individual owners of solar panels can claim a rebate from the utilities companies on the solar energy they (individuals) generate. The rebate is in turn paid out from a fund, set up by the government. Households therefore can get a guaranteed return on their solar panels which could cost about RM40,000. This investment cost could be part of the purchase cost of homes. The payback for the individual could be about 15-20 years.

5. In Malaysia, a Renewable Energy Action Plan is expected to be tabled in October but Daniel says a source of debate is funding it. In Europe, households pay a levy into this fund. In Malaysia, this would probably not be popular measure despite good intentions to become greener.

6. Some of the biggers producers of solar energy panels or components like Sunpower, Q-cells and First Solar have set up production plants in Malaysia due to incentives and access to qualified workforce. Here, Daniel emphasises for Malaysia to move up the rankings as a market leader, it need to beef up its education to supply the necessary talent, and also be able to learn from these producers and get into R&D.

7. It's also important for Malaysia to have a robust domestic market and also to create more opportunities for entrepreneurs. Otherwise, Malaysia would just be a producer for multinational companies and there'll be no significant added value to the economy nor will there be transfer of high level expertise.

7. Daniel also says there could be more joint ventures between local and foreign companies to encourage further investments in this industry.