Kuala Lumpur, February 14, 2025 – The Federation of Malaysian Manufacturers (FMM) has expressed support for the Government’s initiative to remove the 85% demand capacity cap for non-domestic users and permit ground-mounted and water-based solar panel installations under the self-consumption (SelCo) programme. However, FMM has raised concerns over recent changes outlined in the SelCo Guidelines, issued by the Energy Commission on January 1, 2025, which have led to delays in investments, estimated at RM2 billion, from large energy users.
Two major issues have caused concern within the industry. First, the introduction of a monthly standby charge of RM14 per kilowatt peak (kWp) for non-domestic users with systems exceeding 72kWp. Second, the requirement for users to install battery energy storage systems (BESS). Both measures are expected to significantly increase the cost of implementing the SelCo programme, which had initially been favored by industrial users as a means to reduce emissions and meet their Environmental, Social, and Governance (ESG) targets following the removal of the capacity limit.
Industrial stakeholders argue that the high standby charge is unjustifiable, as solar systems typically generate power for only 3.5 hours per day, with the remainder of the energy demand being met through the grid. Additionally, the mandatory installation of BESS, which would require 1kWh of storage for every 1kWp of solar PV capacity, is projected to increase investment by at least 40%. While BESS offers several benefits, FMM advocates for it to be optional, with users who do not install BESS paying the standby charge at a fair rate, while those who do install BESS would be exempt.
FMM has presented these concerns during discussions with the Energy Commission and PETRA, urging the Government to address the industry’s feedback promptly. It is crucial that these adjustments be made to ensure the goals of expanding access to green electricity, supporting ESG initiatives, and achieving Malaysia’s energy transition target of 70% renewable energy capacity by 2050 are successfully met.
