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Solar Systems In Malaysia: How To Reduce Business Operating Costs


Solar Systems In Malaysia: How To Reduce Business Operating Costs

With the COVID-19 pandemic and global issues such as unemployment and inflation, businesses are facing challenging times. Utility prices are soaring high and operational costs are growing daily. However, if your business is looking to be more environmentally friendly, installing a solar system in Malaysia is a great and affordable option.

As the public is becoming more environmentally aware, they have adopted eco-friendly practices to minimise harm to the environment. Businesses are stepping up to be greener too as reducing their environmental impact is now a business imperative. By exercising corporate social responsibility, many businesses are now taking the necessary steps to reduce their carbon footprint and pursue sustainability practices.

Although sustainability is a vital driving force, companies are also adopting sustainability practices for lower utility bills. Installing a solar system can typically cut electricity costs by up to 30%, especially on commercial and industrial properties in Malaysia.

Not to mention, the environmental impact of traditional electricity sources is much greater. These effects include the emissions of fossil fuels and other harmful pollutants that contribute to climate change.

Enter customised solar power systems, a practical and cost-effective solution for small, medium, and large organisations. Allow us to explore how converting to solar energy can lighten the load of your company’s operational costs.

Having a solar energy system means you will be using lesser power from your local utility provider — if any at all. With the system fitted to generate the amount of electricity your business requires, it will tremendously lower monthly utility bills.

Commercial and industrial properties, in particular, have an advantageous capacity for such a technological implementation. Since these idle sites are vast or have incredibly spacious roofs, they can accommodate solar systems of more substantial size. That way, companies can ease up cash flow for other opportunities.

If your business is in it for the long haul, look at the bigger picture. Solar systems typically have a lifespan of 25 to 35 years, so you can liken your investment to ’prepaying’ for 25 to 35 years’ worth of electricity bills.

After the payback period, you are essentially getting a free power supply.

Reasons to Purchase a Solar System for Your Business in Malaysia

Government Tax Incentives for Solar Systems in Malaysia

Perhaps the primary reason that encourages businesses to invest in solar power is the government.

Malaysia's Inland Revenue Board (IRB) classified solar systems as "plant and machinery," making them eligible for depreciation over a six-year term. Consequently, companies can receive a 20% Initial Allowance and 14% Annual Allowance based on the original costs incurred.

Besides that, the Malaysian Investment Development Authority (MIDA) provides additional Green Investment Tax Allowance. This means 100% of the funds incurred on renewable energy projects from the date of application can be offset against 70% of statutory income in the assessment year.

Add up these tax incentives, and you’re looking at a 48% decrease in the total cost of solar systems in Malaysia. Accordingly, companies can deduct the payback period of solar systems to 3-4 years.

Reduced Monthly Electricity Bills

Having a solar energy system means you will be using lesser power from your local utility provider — if any at all. With the system fitted to generate the amount of electricity your business requires, it will tremendously lower monthly utility bills.

Commercial and industrial properties, in particular, have an advantageous capacity for such a technological implementation. Since these idle sites are vast or have incredibly spacious roofs, they can accommodate solar systems of more substantial size. That way, companies can ease up cash flow for other opportunities.

If your business is in it for the long haul, look at the bigger picture. Solar systems typically have a lifespan of 25 to 35 years, so you can liken your investment to ’prepaying’ for 25 to 35 years’ worth of electricity bills.

After the payback period, you are essentially getting a free power supply.

Avoiding Maximum Demand Charges

As you know, solar PV panels generate the most power when the sun is out. Manufacturing businesses and others can optimise their electricity consumption during peak daylight hours, usually between 12 pm and 3 pm.

Considering that organisations generally use the most energy in the daytime, they can draw the necessary amount directly from solar systems. Your business will make the most out of the investment and potentially reduce any maximum demand charges from TNB.

New Avenues for Branding

The modern age hails millennials as the most highly educated generation. This civic-minded population has strong opinions and specific demands when engaging with a business or buying a product.

As a result, companies are increasingly accepting more sustainable and ethical practices. The progression towards eco-friendliness proves beneficial for businesses, as millennials are the most significant market to dominate.

Ultimately, adopting clean energy could give your business the competitive advantage it needs whilst upholding Corporate Social Responsibility (CSR). After all, solar power is known as the primary instrument to diminish the adverse effects of energy production.

What to Know About Installing a Solar System in Malaysia

You may still have some questions regarding a hefty investment like this, and with more companies embracing renewable energy, it’s in your best interest not to fall behind. Here are some answers to quench your curiosity!

How much does a solar system cost for businesses?

There are no definitive costs for a solar system as the prices vary depending on several factors. However, the average cost of a solar panel is approximately RM25 to RM 30 per square feet of roof, which can be pricier than other countries such as China or Vietnam because Malaysia has higher labour costs.

On the other hand, solar energy providers nowadays provide flexible options, such as Power Purchase Agreements (PPAs) or solar leases. These solutions could eliminate upfront costs for corporates and the government and allow any organisation to make the change.

Is it worth it to install a solar system?

While it is not cheap, maintaining a solar system requires low effort and cost. You can even profit from selling excess power back to the grid if you have ownership over the solar system — either through a purchase or taking over after the PPA tenure.

Is Malaysia suitable for adopting solar energy?

Yes, Malaysia is located in a privileged location for solar energy development. With a tropical climate all year round, the country sees ample sunlight for about 12 hours a day.

What are the factors that determine the cost of installation?

System capacity, quality of equipment and system performance are the main factors to consider in your company's energy requirement. Another influence on the price of solar installation is the solar permit.

Solar Systems in Malaysia with Ditrolic

Ditrolic Energy seeks to achieve its client's goals, whether it be optimising generation speed or deducting the payback period. Moreover, Ditrolic offers zero CAPEX solutions for businesses to reach energy independence.

Find out more information on solar energy systems and join the environmental movement that will avail generations to come.