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Energy Policy 36 (2008) 21302142

Economical, environmental and technical analysis of building integrated photovoltaic systems in Malaysia
Lim Yun Senga,, G. Lalchandb, Gladys Mak Sow Linb,1

Department of Physical Science, Electrical and Electronic Engineering, Tunku Abdul Rahman University, 53300 Setapak, Kuala Lumpur, Malaysia b Malaysia Energy Centre, Building Integrated Photovoltaic Project, Malaysia Received 13 December 2007; accepted 18 February 2008 Available online 9 April 2008

Abstract Malaysia has identied photovoltaic systems as one of the most promising renewable sources. A great deal of efforts has been undertaken to promote the wide applications of PV systems. With the recent launch of a PV market induction programme known as SURIA 1000 in conjunction with other relevant activities undertaken under the national project of Malaysia Building Integrated Photovoltaic (MBIPV), the market of PV systems begins to be stimulated in the country. As a result, a wide range of technical, environmental and economic issues with regard to the connection of PV systems to local distribution networks becomes apparent. Numerous studies were therefore carried out in collaboration with Malaysian Energy Centre to address a number of those important issues. The ndings of the studies are presented in the paper and can be served as supplementary information to parties who are directly and indirectly involved in the PV sector in Malaysia. r 2008 Elsevier Ltd. All rights reserved.
Keywords: Financial viability of PV systems; Reduction in greenhouse gas emissions; Technical issues caused by PV systems

1. Introduction Greenhouse gas emissions from combustion of fossil fuels for electricity generation have grown extensively over the past two decades. Such a rapid growth of emissions has caused the world to suffer, increasingly, the adverse effects of climate changes. In the past few years, Malaysia has experienced a number of such effects. For example, the oods in Johore on Peninsular Malaysia from December 2006 to January 2007 were the worst in 100 years. These oods caused 90,000 people to leave their homes and killed 17 people. This natural event resulted in the country to suffer nancial losses of about RM 6 billion ( US$1.38 billion; BBC News, 2007). The demand for electricity will continue to grow worldwide over the next two decades. In Malaysia, the
Corresponding author. Tel.: +6034109802 or +60123459598; fax: +60 03 41079803. E-mail addresses: (L.Y. Seng), (G. Lalchand), (G.M. Sow Lin). 1 Tel.: +60389434300 or +60133910540.

energy demand is predicted to increase from 11,050 MW in 2001 to 20,087 MW in 2010 (Ninth Malaysia Plan, 2006). Therefore, the emission of greenhouse gases is predicted to increase from 43 million tones in 2005 to 110 million tones in 2020 (Mahlia, 2002). In addition, the global price of crude oil increased enormously from USD 23.17/barrel in January 2000 to USD 86.02/barrel in November 2007 (Energy Information Administration, 2007). The average increased rate of the oil price is about 34%/year. As a result, Malaysia will increasingly face a wide range of social and economic issues caused by climate changes as well as the increased prices of fossil fuels. The government has therefore put in a great deal of efforts to explore and increase the utilization of renewable energy sources in order to reduce the use of fossil fuels and so the emission of greenhouse gases (Abdul and Lee, 2005). In 2000, the government reviewed its energy policy and implemented the Five Fuel Diversication Policy, making renewable energy as the fth source of energy in the country. It was estimated that if the use of renewable source can be increased to 5% of the total electricity generation, then the country could save RM 5 billion

0301-4215/$ - see front matter r 2008 Elsevier Ltd. All rights reserved. doi:10.1016/j.enpol.2008.02.016

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(US$1.32 billion) over a period of 5 years (Abdul and Lee, 2005). Since then, a wide range of programmes have been undertaken to promote and increase the installation of renewable power plants. One of the programmes is the implementation of Small Renewable Energy Power (SREP) Programme in May 2001 (Ministry of Energy, Water and Communications, 2007). Under this programme, the owners of any SREP plants can apply for a license to sell their renewable electricity to the main utility company, Tenaga National Berhad (TNB), for a period of 21 years. Up to date, 59 applicants have been approved under the SREP with total energy generation capacity of 352 MW. Many of the approved renewable power plants use biomass, wood waste and rice husk as a source of energy. Malaysia is a tropical country where solar energy is available throughout the year with solar radiation in the range of 1419 to 1622 kWh/m2/year (Solar Radiation, 2008). Under such a climatic condition, photovoltaic systems become another favourable renewable energy source. However, at present, the prices of PV modules and related components are extremely high. The current market value of PV system is about RM 28.00/Wp (US$ 8.40). The reason for such a high price is that, at present, Malaysia does not have any local PV manufacturer. All the PV modules and inverters are imported from foreign countries, such as Germany and Japan, hence causing the cost of PV systems to be very high. As a result, photovoltaic systems are not an attractive option to the public. Therefore, PV business becomes unsustainable and is often regarded by PV suppliers and service providers as their side income stream. In order to reduce the cost of PV system, Malaysia Energy Centre has carried out a project named Malaysia Building Integrated Photovoltaic (MBIPV). This project is funded by the government, United Nations Development Programme (UNDP/GEF) and various private sectors. The main idea of the MBIPV project is to incorporate PV grid-connected systems aesthetically into the building architecture and envelope. Activities undertaken in this project are aimed at creating the necessary conditions that will, in turn, lead to sustainable and widespread application of BIPV starting from 2006 onwards. The MBIPV project is expected to induce the growth of BIPV installations by 330% from the current status of 470 to about 2000 kW, with a unit cost reduction of about 20% by the year 2010. Since the commencement of the MBIPV project, a wide range of activities have been undertaken. For example, a PV market induction programme, known as SURIA 1000, was started from September 2006, although it was ofcially launched on 22nd June 2007. Under this programme, electricity customers can bid for price rebates on PV systems under the MBIPV project (Southeast Asia Renewable Energy Newsletter, 2007). The rst round of bidding yielded 14 successful bids from 39 applicants. The successful applicants received the discount of, on average, 53% of their PV systems. This programme will operate every year

until 2010. In addition, a US-based PV manufacturing company, namely First Solar, is currently setting up a manufacturing branch in Kulim Hi Tech Park located in Kedah. It is expected to complete the construction of the rst phase of its factory by the end of 2007. Its rst production is expected to begin by the end of 2008. First Solar will continue to expand its manufacturing plant in the future. With such increased activities associated with the PV sector, it becomes essential to address issues with regard to the connection of PV systems to local distribution networks. Therefore, collaboration was established between Tunku Abdul Rahman University and Malaysia Energy Centre to carry out studies on several critical issues. Among all these issues, the economic viability, environmental benets and technical impacts of installing PV systems are discussed in this paper. The paper can serve as supplementary information to any parties who are directly and indirectly involved in the PV sectors. Economic viability of installing PV systems is evaluated under several considered regulatory and commercial frameworks as discussed in Section 2. Reduction in the emissions of greenhouse gases as a result of PV penetration is determined as presented in Section 3. Simulation studies are carried out to investigate the effects of PV systems on distribution network voltage level, energy losses and maximum demand charge as discussed in Section 4. Conclusions are given in Section 5. 2. Economic viability of installing PV systems 2.1. Net present value (NPV) The NPV is a standard method for nancial appraisal of long-term projects. The higher the NPV, the greater the nancial benets will be (Bernal-Agustin and Dufo-Lopez, 2006). It is used to evaluate the economical viability of installing a 1 kWp PV system. The following shows the derivation of the equation for calculating NPV. The initial cost of the grid-connected PV system is expressed as follows: S C gen C inv C inst C sub where S is the cost of the PV system, Cgen the cost of the solar cells, Cinv the cost of the inverter, Cinst the cost of installation and Csub the amount of nancial subsidy under SURIA 1000. The net cash ow Qj for year j is the prot made in a particular year j as a result of the investment and can be calculated by using the following equation. It is the difference between the savings achieved in electricity bill and expenses incurred as a result of the investment: Qj ppv E gen C O&M C Ins (2)

where Qj is the prot made in year j, ppv the PV electricity tariff, Egen the annual amount of PV generation, CO&M the

2132 L.Y. Seng et al. / Energy Policy 36 (2008) 21302142 Table 1 Parameters used to calculate NPV Total cost of the installation Annual yield of PV (Egen) PV electricity tariff (ppv) Lifespan of PV (N) Annual maintenance and insurance cost (CO&M+CIns) Subsidy (Csub) Ination (g) Nominal interest rate (i) RM 28/Wp 1100 kWh/kWp RM 0.28/kWh 30 years RM 140/kWp Varying from 40% to 70% 3% 3%

cost of operation and maintenance and CIns the cost of insurance. Under the current regulatory framework, PV generation is traded on a net metring basis, where the PV owners only pay for the net amount between on-site consumption and PV generation. TNB will not make any payment to the PV owners if the PV generation is higher than the on-site consumption. Any excess of PV generation in a particular month will be carried forward to the transaction of the following month. It is known that expenses vary from year to year because of ination. For PV systems, the cost of maintenance and insurance should increase due to ination. Taking into account the cost variation gives Qj ppv E gen C O&M C Ins 1 g


where g is the ination rate. The NPV can then be calculated by using the following formula: NPV S S Q1 Q2 QN 1 i 1 i2 1 iN N X Qj
j 1

1 ij


where i is the nominal interest rate and N the lifespan of PV (years). Nominal interest rate is the monetary price or the interest rate that allows different economic quantities to be referred to each other, transferred periodically over time, to the initial year of investment. 2.2. Case study 1: calculation of NPV under the existing regulatory and commercial frameworks in Malaysia The calculation of NPV is carried out for 1 kWp in Malaysia with the following data collected from Malaysian Energy Centre and Energy Commission Malaysia booklet (Energy Commission Malaysia, 2004). Under SURIA 1000 programme, successful applicants can receive subsidy ranging from 75% to 40% of their PV systems. Therefore, in this case study, NPV is calculated for the 1 kWp PV system with the subsidy varying from 40% to 70%. The PV electricity tariff is RM 0.28/kWh. This calculation does not cater for the cost of replacement for the inverter in the midlife of the PV system. Table 1 shows the parameters necessary for the calculation of NPV. At the subsidy rate of 40%, the NPV is 15,000. The value reduces to 6500 at a subsidy rate of 70%. The owners of PV systems may not be able to receive any nancial return from their investment in PV systems. This is because the cost of the PV systems is excessively high and also the selling price of PV electricity is very low. At present, Malaysia does not have any local PV manufacturer. All the PV modules and inverters are imported from foreign countries, such as Germany and Japan. Therefore, the cost of PV systems is very high.

Under the current commercial arrangement, the tariff of PV electricity is made to be the same as that of fossilfuelled electricity. The price of PV electricity is very low because the price of fossil fuels is heavily subsidized by the government. The high cost of PV systems and low tariff of PV electricity result in the negative value of NPV. To investigate how PV electricity tariff will affect the NPV, Fig. 1 is derived to show the correlation between NPV and PV electricity tariff under various subsidies. This graph indicates that if a PV system is given a nancial subsidy of 50%, which will cost RM 14,000 to the government, then the owner would be able to make a nancial return if the PV electricity tariff is above RM 0.82 per kWh. The owner would be able to make nancial return if the PV tariffs are greater than RM 0.70/kWh and RM 0.58/kWh under the subsidy of 60% and 70% respectively. The subsidy of 60% and 70% will cost RM 16,800 and RM 19,600, respectively, to the government. 2.3. Case study 2: calculation of PV electricity tariff as a function of protability In this case study, PV electricity tariff is calculated with respect to the protability of PV system. This calculation was carried out with the assumption that the cost of the PV system is given a subsidy of 40% which costs the government RM 11,200. The results show that the PV owners will be able to achieve 40% prot if the PV electricity tariff is RM 1.495/kWh as shown in Table 2. The utility companies may be able to increase the PV tariff to RM 1.495/kWh for the PV owners if a sufcient fund is available. This fund can be secured if the utility companies could impose a certain amount of levy on the electricity bills of domestic customers. A study was carried out to identify the amount of levy that should be imposed on the electricity bills. It is known that the number of domestic customers in Malaysia is 6.0 million. Total energy consumption of those customers per year is 15,000 GWh. Electricity tariff is RM 0.28/kWh and total electricity bill of the domestic customers is RM 4.2 billions (Energy Commission Malaysia, 2004). It is assumed that the total installed capacity of PV is 1 MWp and the total yield of PV is 1.1 GWh/year.

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15000 Subsidy=50% Subsidy=60% Subsidy=70%




0 0.234 -5000 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1


-15000 Selling Price (RM/kWh)

Fig. 1. NPV as a function of PV tariff under various subsidies. Table 2 PV electricity price with respect to the protability Profit 100 (%) Capital Selling price of PV electricity (RM/kWh) Years of return Protability 0 0.974 Never 5 1.015 28 10 1.061 25 20 1.17 21 30 1.309 18 40 1.495 15

The total burden for the domestic customers and the corresponding levy are calculated as shown in Table 3. It is shown that the amount of levy is only marginal. Even if the total installed capacity of PV is increased to 2 MWp, which is the targeted amount for 2010, the amount of levy is still marginal. Therefore, it may be feasible for the utility companies to tap on this resource to give a better PV electricity tariff to the PV owners. However, the customers may refuse to accept the levy if the installed capacity of PV becomes substantially high. For example, if the total installed capacity of PV is increased to 360 MWp, which is about 2% of 16,000 MW, which is total power demand of Malaysia, the amount of levy is increased by a factor of 360. Each domestic customer has to pay an average amount of RM 758 instead of RM 700 for his/her electricity consumption. Customers will refuse to accept such a high levy. 3. Environmental analysis 3.1. Types of fossil fuels to be replaced by PV system The utility sector of Malaysia is composed of two main sub-sectors, namely hydroelectric and thermal power plants (Saidur et al., 2006). Electricity is supplied by three main utility companies, namely TNB in Peninsular Malaysia, Sabah Electricity Supply Berhad (SESB) and Sarawak Energy Berhad. In year 2003, the total electricity

generated in the country was 83,300 GWh. Table 4 shows the types of sources accounted for the total amount of generation. Fig. 2 shows the daily load prole in Malaysia and the composition of power plants involved throughout the day (Ahmad, 2002). It is shown that open-cycle gas turbines are always the nal resource to be used in mapping the power demand. This indicates that open-cycle gas turbines that operate during peak seasons can possibly be substituted by the PV systems available on the networks. Therefore, the type of fossil fuels to be reduced as a result of the penetration of PV systems could be natural gas. The following is the equation to determine the amount of primary energy to be replaced by PV if the efciency of the open-cycle gas turbine power plant is known: E prim E PV Z (5)

where Eprim is the amount of primary energy to be replaced by 1 kWh of PV generation (kWh), EPV the 1 kWh of PV generation and Z the average efciency of the conventional thermal power plant. It is known that gas-red power plants have an efciency of approximately 30% (Kannan et al., 2004, 2005). By using Eq. (5), it is estimated that 1 kWh of electricity from PV can replace natural gas of 3.3 kWh, which is equivalent to 11.88 MJ.

2134 Table 3 Levy to be imposed on electricity bills Selling price of PV electricity (RM/kWh) Increase in PV electricity price as compared to electricity tariff (RM/kWh) Increase in burden for domestic customers (RM-millions) Levy on electricity bills for domestic customers (%) 0.974 0.694 0.76 0.018 1.015 0.735 0.81 0.019 1.061 0.781 0.86 0.020 1.17 0.89 0.98 0.023 1.309 1.029 1.13 0.027 1.495 1.215 1.34 0.032 L.Y. Seng et al. / Energy Policy 36 (2008) 21302142

Table 4 Percentage of electricity generation by different types of sources in 2003 Types of fuels Gas Coal Hydro Oil Biomass and others Percentage 72.8 16.3 6.2 4.0 0.7 Amount of electricity (GWh) 60,642 13,577 5164 3332 583

3.2. Amount of emissions to be avoided by PV Fig. 4 shows that the life cycle of PV systems consists of three phases: (1) manufacturing and construction phase, (2) operational phase and (3) decommissioning phase. In the manufacturing and construction phase, electricity is required and imported from the national grids which are powered by various power plants, where 93% of the energy sources are fossil fuels. As a result, greenhouse gases would be emitted during the manufacturing and construction of PV systems. Studies have been carried out to estimate the energy requirement for this phase and so the associated emissions of greenhouse gases in Europe and Singapore (Reinhard, 2006; Kannan et al., 2006; Alsema and Nieuwlaar, 2000; Bernal-Agustin and Dufo-Lopez, 2006). However, such studies using Malaysias context have yet to be undertaken. As a result, it is necessary to perform these studies based on the relevant data. As for the operational phase, PV systems generate clean electricity to reduce the use of natural gas and hence emissions of greenhouse gases caused by combustion of natural gas. Calculation will be carried out to estimate the amount of emissions of greenhouse gases to be reduced by PV system in Malaysia. For the decommissioning phase, electricity is required for recycling all the materials, such as recycling of aluminium supporting structures and module frames. The electricity could be from the national grid. However, due to the lack of strategy for recycling PV systems in Malaysia, it is proposed to ignore the calculation of greenhouse gas emissions associated with this phase in this document. 3.2.1. Amount of emissions during the manufacturing and construction of PV The total amount of greenhouse gases emissions for year 2003 is calculated as tabulated in Table 5. The primary energy required to manufacture PV components is given in Table 6 (Bernal-Agustin and Dufo-Lopez, 2006). This data is used to derive the primary energy and electricity requirements for manufacturing the ground and roof top PV systems as shown in Table 7. Finally, the total amount of emissions of greenhouse gases for the ground and rooftop PV systems is determined as shown in Table 8. 3.2.2. Net amount of emissions to be avoided throughout the lifespan of PV As mentioned previously, natural gas is the most likely fossil fuel to be replaced by PV systems. Knowing the emission factors for a gas-red power plant, the amount of

Fig. 2. Daily load prole for the utility in Malaysia.

It is known that the annual yield of 1 kWp PV system varies at different areas (Jensen, 2006). The amount of primary energy to be replaced by 1 kWp PV system at various areas will be different as shown in Fig. 3. The average amount of primary energy to be replaced by 1 kWp PV system per year is about 15,191.55 MJ. This data is valuable to the government and the utility company because they can use this gure to determine the saving of natural gas. Assume that the average cost of natural gas is about RM 13.15/mmBtu or RM 0.62/kg (GasMalaysia, 2008). The energy content of natural gas is about 55 MJ/kg. If the lifespan of 1 kWp PV is 30 years, then the government or the utility company can save about RM 5.13 thousand of natural gas over the lifespan of the PV system. If the government achieves the total installed PV capacity of 2 MWp in 2010, then the country can save about RM 10.26 million of natural gas over 30 years.

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1800 1600 Annual energy output of PV (kWh/kWp) 1400 1200 1000

20000 18000 16000 14000 12000 10000 Amount of replaced primary energy (MJ)

800 8000 600 400 200 0 Kota Penang Kinabalu Kota Bahru Kuching KWh/kWp Johor Bahru Kuantan Melaka MJ Kuala Lumpur 6000 4000 2000 0

Fig. 3. Annual energy output of 1 kWp PV and the amount of primary energy to be avoided by 1 kWp PV system at various areas in Malaysia.

Fig. 4. Energy ow for the three phases of PV system.

Table 5 Greenhouse gases generated by conventional thermal plants in year 2003 in Malaysia Greenhouse gases Emission factors of fossil fuels (kg/kWh) Total emissions of conventional thermal plants in year 2003 (tonne) Emissions per total amount of electricity generated (83,300 GWh) in year 2003 (g/kWh)

Coal CO2 SO2 NOx 1.18 0.014 0.005

Petrol 0.85 0.0164 0.0025

Gas 0.53 0.0005 0.0005 50,994,594 273,698.81 133,513.24 612.18 3.2857 1.6028

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CO2, SO2 and NOx to be reduced by PV systems over 30 years is determined as shown in Table 9. Finally, the net reductions in emissions of CO2, SO2 and NOx over the

Table 6 Primary energy requirements for the production of various system components Components Primary energy requirements 47 MJ/Wp 35 MJ/Wp 23 MJ/Wp 1700 MJ/m2 500 MJ/m2 1 MJ/W

lifespan of 1 kWp PV system are 17.573, 0.004 and 0.028 tonnes, respectively. If the country achieves the total installed PV capacity of 2 MWp, then we can avoid a total greenhouse emission of 35,210 tones over 30 years. This data is not only valuable to the government but also PV owners because they can use the data to register their PV projects as a Clean Development Mechanism (CDM) project (Clean Development Mechanism Malaysia, 2008). Then, they are entitled to sell certied emission reduction (CERs) to developed countries, hence creating additional income streams to the PV owners. 3.3. Energy pay-back time (EPBT) EPBT is the number of years required to recuperate the energy used to manufacture a PV system and dispose it at the end of its lifespan (Alsema et al., 1998). It is one of the parameters used to indicate the amount of benets that PV system can bring to the environment. EPBT is expressed in

Monocrystalline silicon PV module with aluminium frames Polycyrstalline silicon PV module with aluminium frames Amorphous silicon PV module with aluminium frames Array support for a ground PV system Array support for a roof top PV system Invertors and cabling

Table 7 Total primary energy and electricity requirements for the production and installation of ground and rooftop PV systems Types of PV modules For the ground PV system Primary energy requirements (MJ/W) Monocrystalline silicon Polycyrstalline silicon Amorphous silicon 61.07 49.07 48.28 Electricity requirement (kWh/kWp) 5941.33 4774.01 4697.05 For the rooftop PV system Primary energy requirement (MJ/W) 51.84 36.38 31.14 Electricity requirement (kWh/kWp) 5043.40 3539.35 3029.46

Table 8 Total amount of greenhouse gas emissions and the average emission for production of PV modules in Malaysia Greenhouse gases For the ground PV system (tonne/kWp) Mono-Si CO2 SO2 NOx 3.637 0.019 0.009 Poly-Si 2.922 0.016 0.008 Am-Si 2.875 0.015 0.008 For the rooftop PV system (tonne/kWp) Mono-Si 3.087 0.017 0.008 Poly-Si 2.167 0.011 0.006 Am-Si 1.854 0.009 0.005 2.757 0.015 0.007 Average emissions (tones/kWp)

Table 9 Amount of greenhouse gases to be avoided over 30 years at various locations Locations Annual yield (kWh/kWp) Yield over 30 years (kWh/kWp) Amount of greenhouse to be avoided over 30 years (tonne/kWp) CO2 Kota Kinabalu Penang Kota Bahru Kuching Johor Bahru Kuantan Melaka Kuala Lumpur Average emission 1600 1350 1250 1240 1220 1200 1190 1180 (tonne/kWp) 48,000 40,500 37,500 37,200 36,600 36,000 35,700 35,400 25.44 21.46 19.87 19.72 19.39 19.08 18.92 18.76 20.33 SO2 0.024 0.020 0.018 0.018 0.018 0.018 0.017 0.018 0.019 NOx 0.043 0.036 0.033 0.033 0.033 0.032 0.032 0.032 0.035

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years and can be calculated as follows: EPBT E invested E PV (6)

where Einvested is the amount of energy required to manufacture the PV system and dispose it at the of its lifespan and EPV the amount of energy generated by the PV system per year. The primary energy requirements are used in conjunction with the yearly yields to calculate EPBT for various locations throughout the country. Fig. 5 shows the values of EPBT of various technologies at different locations. It is shown that EPBT of thin lm rooftop systems is in the range of 1.892.6 years, which is the lowest as opposed to that of monocrystalline and polycrystalline rooftop systems. Therefore, it is recommended to use thin lms in Malaysia. 4. Technical analysis Integration of PV systems with distribution networks could bring forth a number of benets as well as technical issues. The benets could be the reduction in maximum demand charge and energy losses. However, it creates voltage rise issues. Numerous studies have been carried out to investigate the impacts of PV penetration on maximum demand charges, energy losses and voltage rise issues (IEA, 2002; Jenkins et al., 2000; Chalmers et al., 1985; Aly et al., 1999). However, such studies may need to be carried out in Malaysias context. Therefore, efforts have been undertaken to collect the topology of a local distribution network as well as the associated network parameters from the main utility company, TNB. The distribution network used for this study is on the commercial premise, called Aman Jaya, in Petaling Jaya in
4.5 4 3.5 3 EPBT (Years) 2.5 2 1.5 1 0.5 0 Kota Kinabalu

Selangor. The single-line diagram of this network is shown in Fig. 6. This network consists of 14 loads and 18 distribution lines. The parameters of the cable and transformers are given in Table 10. The daily load was measured as shown in Fig. 7. The maximum power demand is 120 kW from 11 am to 6 pm. The minimum power demand is 20 kW from 1 am to 8 am. This network was modelled in Matlab with the assumption that it is a balanced three-phase system. The simulation model was used to determine the energy losses and voltage rise on the network with various capacities of PV penetration as discussed in the following sections. 4.1. Power losses on distribution network Installation of PV systems on the distribution network changes the load prole of customers and hence energy losses on the networks. To identify exactly how the load prole can be affected by PV systems of various sizes, the actual output proles of a 5.25 kW PV system on a bungalow house were used as given in Fig. 8. The average value of the output proles was taken and then scaled up to reect a bigger capacity of PV before it was superimposed with the actual load prole of the network to derive several load proles as shown in Fig. 9. The gure illustrates how the load prole is affected by varying the size of the PV system. These load proles were used to calculate the energy losses on the distribution network. The procedure of calculating the energy losses is described in Lakervi and Holmes (1998). Table 11 shows the percentage of energy losses on the distribution network with respect to the capacity of PV systems. It is shown that monthly energy losses on the distribution network reduces from 80.7 to 40.8 kWh as the size of

Mono roof Poly roof Thin film roof

Penang Kota Bahru Kuching

Johor Bahru



Kuala Lumpur

Fig. 5. EPBT of rooftop PV systems at different cities in Malaysia.

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Fig. 6. Distribution network on Aman Jayas commercial area.

Table 10 Parameters of transformer and cables Type of equipment or cable Resistance (at 50 Hz at 90 1C) 0.00385 O 0.13 O/km 0.568 O/km Reactance (at 50 Hz) 0.00807 O 0.072 O/km 0.075 O/km

companies to minimize the cost of maintenance for their networks. 4.2. Voltage rise issues on the distribution network integrated with PV systems The same network model was used to investigate the impacts of PV systems on the voltage level on the distribution network. A number of case studies were carried out with various sizes of PV. In each case study, the voltage level at every busbar was taken and then plotted as shown in Fig. 10. The statutory tolerance for low voltage distribution network is +5% and 10% of the nominal value which is range of 216252 V (Ministry of Energy, Water and Communications, 2007). It is shown that the voltage excursion is within the statutory tolerances. These results indicate that the voltage rise issues

11 kV/415 V Transformer (750 kVA) 300MMP 4C XLPE Al 70MMP 4C XLPE Al

the PV system increases from 0 to 5 kWp. The reduction of energy losses is about 50.5%. If the energy losses on the network can be reduced, any premature defect of network equipment caused by thermal heating could be minimized. Hence, utility companies may avoid or defer the needs of upgrading their networks. This can help the utility

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160 140 120 Power demand (kW) 100 80 60 40 20 0

0:00 1:34 3:08 4:42 6:16 7:50 9:24 10:58 12:13 13:47 15:21 16:55 18:29 20:03 21:37 23:11

Day hours
Fig. 7. Total power demand of all the customers.

4000 3500 3000 Power Output of PV (W) 2500 2000 1500 1000 500 0 7:00 April Oct Sept June


9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 Day hours

Fig. 8. Daily output prole of 5.25 kWp PV system in Semenyih.

caused by the penetration of PV systems may not be an issue of major concern to the utility companies. 4.3. Reduction in maximum demand charge The tariff for the maximum demand charge is RM 25.70/ kW/month for commercial sectors with voltage level of 11 kV (Energy Commission Malaysia, 2004). Table 12 shows the maximum demand charges with respect to the capacity of the PV system. It is shown that as the capacity of PV increases from 0 to 5 kWp, the maximum demand

charges faced by the commercial customers decrease from RM 220.30 to RM 117.48. The reduction of the maximum demand charge is about 53%, which is a substantial benet to the customers. 5. Conclusion Under the current regulatory and commercial frameworks, the owners of PV systems are not able to make any nancial return on their investment of the PV systems even after the government has provided a subsidy of up to 70%

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160 Without PV system 140 120 100 Power demand (kW) 80 60 40 20 0 0:00 -20 -40
Fig. 9. Power demand of all the customers with different levels of PV penetration.

With 1 kW PV system With 3 kW PV system With 5 kW PV system





8:55 10:42 12:10 13:57 15:44 17:31 19:18 21:05 22:52 Day hours

Table 11 Monthly energy loss with respect to the capacity of a PV system Capacity of PV on each premise (kWp) Power loss on the network (W) Daily energy loss (kWh) Monthly energy losses kWh Reduction in power losses over loss without PV (%) 0.0 12.6 28.3 34.2 43.5 49.4 Power losses over power consumption (%) 0.169 0.159 0.141 0.142 0.135 0.133

0 1 2 3 4 5

364.98 325.52 288.62 288.62 271.09 271.09

2.69 2.35 1.93 1.77 1.52 1.36

80.7 70.5 57.9 53.1 45.6 40.8

241.8 Without PV With 1 kWp PV With 2 kWp PV With 3 kWp PV With 4 kWp PV With 5 kWp PV


Voltage magnitude (V)





238.8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Busbar number

Fig. 10. Voltage magnitude on the network with various levels of PV penetration.

L.Y. Seng et al. / Energy Policy 36 (2008) 21302142 Table 12 Maximum power demands and charges with respect to the capacity of PV Capacity of PV on each premise (kWp) Total power output of the PV systems on 14 premises, assuming that the efciency of each PV system is 80% 0 11.2 22.4 33.6 44.8 56 Maximum demand of all commercial customers (kW) Maximum demand charge (RM) Maximum demand charge per customer (RM) 2141

0 1 2 3 4 5

120 108.8 97.6 86.4 75.2 64

3084.00 2796.16 2508.32 2220.48 1932.64 1644.80

220.30 199.72 179.16 158.60 138.04 117.48

of the PV capital. Therefore, the current size of PV market is very small; only about 470 kW is owned by a small number of domestic customers. The potential size of PV market in the country is huge since the utility companies have domestic customers of about 6 million, while commercial and industrial customers of 1.2 million. Therefore, it may be necessary for the government and the utility companies to consider offering a higher tariff of PV electricity to the PV owners in order to promote PV installations. Numerous data presented in this paper are indications of the benets that PV systems can bring to the government, utility companies and PV owners. For example, the government or utility company can save RM 10.26 million of natural gas and avoid a total greenhouse emission of 35,140 tonnes over the lifespan of 2 MWp PV systems. The PV owners can create additional income streams by selling CERs to developed countries in addition to the reduction of their maximum demand charges every month. The utility companies can avoid or defer the needs of upgrading their networks with minimum concern for the voltage rise issues. The values of EPBT are relevant to PV manufacturers because the values indicate that thin lm is the recommended type of PV technologies for Malaysia. One of the possible challenges faced by the PV sectors is that the price of PV modules may still be high even after First Solar has been established. This is because Malaysia could face a serious shortage of silicon, which is one of the raw materials for PV cells. A large amount of silicon needs to be imported from foreign countries before an appropriate alternative material can be found locally. Another challenge is that the yearly yield (kWh) of existing PV systems is diminishing every year. One of the possible reasons could be the growth of air pollutants in the atmosphere of major cities that reduces the intensity of the solar radiation on the ground. As a result, customers incomes from selling PV electricity may reduce every year. The government therefore may need to put in more efforts in research and development on solar energy in order to overcome the barriers to the advancement of PV market in Malaysia.

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