PV grid parity analysis for residential sector in Malaysia

Lau , Cheiw Yun (2014) PV grid parity analysis for residential sector in Malaysia. Project Report. UTeM. (Submitted)

Text PV GRID PARITY ANALYSIS FOR RESIDENTIAL SECTOR IN MALAYSIA 24pages.pdf Download (391kB)

Abstract

Solar Photovoltaic (PV) system has been identified as one of the promising renewable resources that could generate „green‟ electricity for the consumers in Malaysia. The Malaysia Renewable Energy Act 2011 and the Feed-in Tariff (FiT) that have been introduced in 2011 have aimed to facilitate the increasing use of renewable energy in Malaysian energy mix. This is to reduce the dependency on fossil fuels and more importantly, to tackle the climate change challenge. In this regard, achieving grid parity is the main priority for the policy makers. When the cost of PV system generation is equal to or lower than the cost of conventional fossil fuel generation; grid parity is achieved. This project presents the detailed PV grid parity analysis for a 4 kW residential grid-connected PV system based on the calculation of the Levelized Cost of Electricity (LCOE). The research is carried out based on three key parameters that drive grid parity, namely: the PV system price, electricity tariff, and discount rate. The degradation FiT rate of solar PV system also taken into consideration. By using an annual energy yield of 1450 kWh/kWp, 21 years of system lifetime, 7.5% discount rate, 3.0% inflation rate, and 0.90% operation and maintenance (O&M) cost, the LCOE is calculated for a 4 kWp system to be RM 0.9170/kWh in 2014. With this, it may take up to 16 years for Malaysia to achieve PV grid parity. In contrast, with an assumption of 1.0%/year degradation rate of LCOE, results suggest that Malaysia will achieve grid parity in 2026. Various scenarios gave different number of years to reach grid parity in Malaysia. For both 8% and 10% degradation rate of FiT, the incomes after the grid parity is reached will be reduced for about RM 2,010.00 and RM 2,486.73 for year 2026 and 2029 respectively.

Actions (login required)

View Item