Solar Thermal Policy in Malaysia: Potential, Barriers and Action Plans for the Industry

In Malaysia, statistics show that 57.65% of electricity in 2011 was generated from gas, 33.3% from coal, 8.8% from hydro and 0.3% from distillate [1]. The over-dependency on a certain fuel types is not a viable long-term option. This has led Malaysia to diversify its current generation mix with various fuel types for a more secure and sustainable electricity supply. A more balance energy mix target has been established by Ministry of Energy, Green Technology and Water in 2030 with 41.3% is from gas, 28.9% from coal, 4.6 % from hydro and contribution of new technologies such as nuclear and Renewable Energy (RE) with 17.8% and 7.3% respectively [2].

In realizing the RE target, policies, incentives and R&D strategies have been developed since the introduction of Five-Fuel Policy in 2001 that has made RE as the fifth fuel in the power generation’s fuel mix after oil, coal, gas and hydro. This was followed by the establishment of the National Green Technology Policy (2009), Malaysia’s National Climate Change Policy (2009), Tenth Malaysia Plan 2011-2015 (10MP), the National Renewable Energy Policy and Action Plan (2010), Renewable Energy Act (2011), National Energy Efficiency Action Plan (2014) and the latest is the Eleventh Malaysia Plan (2016-2020).

Malaysia’s National Energy Balance 2013 [3] reported that total final energy demand in 2013 was 51,584 kilotonne of oil equivalent (ktoe). From this demand, 43.3% was used by transport, 26.2% by industry, 14.4% by commercial/residential, 14.1% from non-energy use and 2% from agricultural sector. Focusing on industrial sector alone, the heating requirement accounts for a large portion i.e. 67% of the total energy use, and the balance was for electricity. Solar energy has a big potential to be used for producing thermal in Malaysian industry. Given the fact that 30% of the total industrial process heat demand requires temperature below 100oC, which can be met by commercially available solar thermal collectors, in principle the potential of solar thermal in industry is enormous [4]. A simple calculation is shown here to generalize its potential impact: Let assume that 5% of the industrial heat for temperature below 100oC is generated using solar thermal, a 1,577 GWh amount of energy from fuel could be avoided which translate into 1,168,878 tonnes CO2 emission reduction.

The enabling policy framework and support programs in Malaysia for RE have focused on grid electricity power generation over thermal applications. This is despite the fact that large portion of the energy is expended for meeting heating requirement, especially in industrial sector. Moreover, many programs and incentives related to solar energy in Malaysia have been emphasized mainly on solar photo voltaic (PV) for electricity generation and much less on heat application. Furthermore, apart from domestic solar water heaters, the government does not yet have policies, incentives or standards that specifically aim at larger-scale solar thermal system applications in commercial buildings or in industrial applications.

As an effort of narrowing the gaps faced by solar thermal in Malaysia, Global Environment Facility (GEF)-United Nation Industrial Development Organization (UNIDO) has embarked a national project on “GHG Emissions Reductions in Targeted Industrial Sub-Sectors through Energy Efficiency (EE) and Application of Solar Thermal Systems” in July 2014. This five years project seeks to address the before-mentioned barriers through four project components [5]:

1)      Development of regulatory framework, support program and financial incentives mechanism to facilitate solar thermal energy utilization.

2)      Awareness raising and capacity building program relating to process heating and cooling optimization and solar thermal energy utilization.

3)      Demonstration and scaling up of sector specific energy efficiency (EE) and solar thermal energy utilization in targeted industrial subsectors.

4)      Monitoring and Evaluation.

As a part of activities in the ASEAN-U.S. Science and Technology Fellowship, I was involved in a national stakeholder workshop, organized by Standard and Industrial Research Institute of Malaysia (SIRIM) in June 2015 in Negeri Sembilan, Malaysia. SIRIM is the implementing agency of GEF-UNIDO Solar Thermal-Industrial National Project. Stakeholders from industries and government ministries and agencies, such as from Ministry of Energy, Green Technology and Water (KETTHA), Ministry of International Trade and Industry (MITI), Sustainable Energy Development Authority (SEDA), Solar Energy Research Institute (SERI), Small Medium Enterprise (SME) Corporation, Malaysian Investment Development Authority (MIDA), Malaysia Industry-Government Group for High Technology (MIGHT), Energy Commission (EC) and representatives from UNIDO participated in the workshop.

Dr. Nofri is presenting action plans for policy and capacity building of solar thermal during Stakeholder Workshop National Project SIRIM-UNIDO, June 2015

This workshop was organized to brainstorm the work plans for the four project components mentioned above. Prior to the workshop, I was involved in formulating the template discussion for the policy and capacity building components. During the workshop I was given the opportunity to coordinate the discussion together with my fellowship’s supervisor, Mr. Mohd Fauzi Ismail from SIRIM, as well as presenting the outcomes of the discussion. In the next sections of this article, I will expand the implication of the workshop’s results on my contributions as an ASEAN-U.S. fellow towards realizing the action plans for the first two components i.e. policy framework and capacity building.

Participants from various industries and government ministries and agencies in the Stakeholder Workshop National Project SIRIM-UNIDO, June 2015

For the component on regulatory framework and support program for solar thermal in Malaysia, my contribution as a fellow ASEAN-U.S. will be through the following activities: reviewing the existing national policies (e.g. National Green Technology Policy, Renewable Energy Policy, National Energy Efficiency Action Plan (NEEAP), Malaysia’s Renewable Portfolio Standard (RPS) and RE obligation scheme); assessing policy and support programs by ASEAN and other countries; reviewing the existing national financial incentives (like Green Technology Fund Scheme (GTFS), Green Investment Tax Exemption (GITE), Green Investment Tax Allowance (GITA), 1Innocert and Pioneer Status); identifying solar thermal industry gap; engaging stakeholders though workshop and focus group discussion; and come out with a policy and support programs recommendation for solar thermal in Malaysia.

For the awareness raising and capacity building component, my involvement will be through: outreach programs, including national project launching and road shows on solar thermal; public awareness campaign through publications such as in InnovASEAN, Journal of Industrial Technology–SIRIM; conducting trainings on the concepts of Measurement and Verification (M&V) in determining energy savings; and developing a guideline on how to perform M&V for energy efficiency program.


[1]  Dato’ Sri Che Khalib Mohamad Noh, Tenaga Nasional Berhad, “Challenges and Prospects in Enhancing Malaysia’s Energy Security”, National Energy Security Conference, Closing the Energy Supply-Demand Gap, Kuala Lumpur, 2012.

[2]  Somasundram Ramasamy, Ministry of Energy, Green Technology and Water, “Initiatives to Enhance Malaysia’s Electricity Supply Security”, National Energy Security Conference, Closing the Energy Supply-Demand Gap, Kuala Lumpur, 2012.

[3] Malaysia Energy Commission, “National Energy Balance 2013”, Suruhanjaya Tenaga Malaysia, 2014

[4]  Sohif Mat, Hafidz Ruslan, Solar Energy Research Institute (SERI), Universiti Kebangsaan Malaysia (UKM), “Solar Thermal Implementation Project for the Industry”, Launch of the National Project GHG Emissions Reduction in Targeted Industrial Sub-Sectors through EE and Application of Solar Thermal Systems in Malaysia, August 2015

[5]  Mohd Fauzi Ismail, “The Roles of SIRIM in Promoting Industrial Solar Thermal Technology Implementation in Malaysia”, Launch of the National Project GHG Emissions Reduction in Targeted Industrial Sub-Sectors through EE and Application of Solar Thermal Systems in Malaysia, August 2015


About the author:

Dr. Nofri Yenita Dahlan is currently an ASEAN-U.S. Science and Technology Fellow 2015 working under the energy security thematic area. She received Electrical Degree, B. Eng (Hons) from Universiti Tenaga National (UNITEN), Malaysia in 2001, M.Sc. degree from the University of Manchester Institute of Science and Technology (UMIST), UK in 2003, and Ph.D. degree in the field of energy economics from the University of Manchester, UK, in 2011. She is a Certified Measurement and Verification Professional (CMVP) for energy savings awarded by Association of Energy Engineers (AEE), U.S. in 2013. Dr. Nofri is a senior lecturer and researcher in Faculty of Electrical Engineering, Universiti Teknologi MARA (UiTM) Shah Alam. Under this fellowship program, she is currently worked with the Renewable Energy Research Center (RERC), SIRIM which is an implementing agency under the Ministry of Science, Technology and Innovation (MOSTI).