Soh Thian Lai, president of the Federation of Malaysian Manufacturers, said the terms introduced on Jan 1 by the Energy Commission could deter large energy users from investing in solar power systems.

It could result in a delay of projects amounting to an estimated RM2 billion, he said.

Soh said FMM welcomed the government’s efforts to expand the SelCo programme for solar self-consumption, by removing an 85% demand capacity cap for non-domestic users and allowing ground-mounted and water-based solar panel installations.

However, he called for a review of a standby charge of RM14 per kWp (kilowatt peak) for non-domestic users with systems above 72kWp.

The standby charge should be reviewed to reflect fairer rates as solar power systems can generate electricity only for an average of 3.5 hours per day, with users relying on grid electricity for the remaining hours.

He also said a requirement for battery storage systems should be made optional. The current rule is to require 1kWh of battery storage for every 1kWp of solar capacity.

“Those who choose not to install batteries could pay a fair standby charge, while those who do install the system could be exempted from the charge” said Soh.

Soh said FMM has raised these concerns during recent discussions with the energy transition and water transformation ministry as well as the Energy Commission.