Calibrating feed-in tariffs to spur renewable energy deployment in Malaysia

In 2011 Malaysia pushed forward with the New Energy Policy to spur renewable energy and energy efficiency development in the country. The policy has been considered largely effective and led the country to adopt a renewable energy capacity target of 11% by 2020. The New Energy policy included a few key features; market-based energy pricing approaches, establishing energy efficiency in both residential/commercial sectors, improved governance and scaled up deployment. Further improving off of this 2011 policy, Malaysia mandated the adoption of feed-in tariffs as a method of accelerated deployment. The implementation of this tariff was the responsibility of the Malaysian Sustainable Energy Development Authority. To ensure the effectiveness of the tariff, the Malaysian Sustainable Energy Development Authority partnered with the Clean Energy Solutions Center and the Clean Energy Regulators Initiative to help review and improve the feed-in tariff for solar photovoltaic, bioenergy, small hydropower, and geothermal energy resources and technologies. The partnership resulted in a number of recommendations to support clean energy development in Malaysia, which were subsequently implemented as well.

Actions profiled

The in-depth, country-specific analysis of the tariff policies was performed, which resulted in multiple concrete recommendations. The analysis focused on (i) improving feed-in tariff rates; (ii) designing of geothermal feed-in tariffs based on international good practices; and (iii) policies for large-scale deployment.

Outcomes

Concrete policy outcomes resulted from this collaboration. The policies adapted by Malaysia are; (i) increases to tariff bonus rates for biomass and biogas; (ii) establishment of revised digression approaches for solar PV to align with market fluctuations, (iii) establishment of geothermal tariffs for up to 30 mW in 2015; and (iv), launching a net metering program.