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Malaysia’s position in the rising solar panel industry

Blog post   •   Apr 13, 2015 08:30 +08

The environmental advantages of solar energy are clear. In spite of this, and the phenomenal growth of the photovoltaic panel industry, the practicality of solar panels is still being debated, citing the expense of installation.

Despite the high costs of installation, solar panels are still an optimal choice where renewable energy is concerned. In a recent article, futurist Ray Kurzweil notes that "solar power has been doubling every two years for the past 30 years" and is only "six doublings […] away from meeting 100 per cent of today's energy needs."

A Citigroup study points out that renewable energy sources "are increasingly competitive with natural gas peaking and Combined Cycle Gas Turbine (CCGT) plants on an LCOE (levelised cost of energy perspective) basis.” The study goes on to compare wind and solar to other forms of energy and concludes that solar energy has advantages over hydro, nuclear and coal energy sources, especially in terms of cost. Hydropower requires a water source and dam construction can have adverse effects on surrounding wildlife, whilst solar panels can be used anywhere. Nuclear plants in the USA face shutdowns due to challenging economics, and the price of coal energy is subject to fuel volatility in the market.

Solar panel production in Malaysia

Solar panel manufacturing is labour intensive, which leads to high costs. This challenge can however, be addressed by producing solar panels in countries where labour costs are lower. Although China remains the largest producer of solar panels currently, other countries in ASEAN (like Vietnam and Cambodia) with low labour costs also stand a chance to grow in the solar panel manufacturing industry.

Malaysia, as a country, is considered a highly beneficial ground for foreign investment. Besides being strategically located in Southeast Asia near appropriate shipping routes, the country also enjoys a stable government and comprises a lower corporate tax rate of 25 per cent as compared to other countries (30 per cent in Australia, 34 per cent in Brazil and India, 33 per cent in Japan and 30 per cent in the Philippines). Combine these with strong tax incentives for investment in the manufacturing sector and you can peg Malaysia as an international hub for green-building technologies.

It was reported that "one of the solar industry’s best-kept secrets" is in Malaysia. First Solar’s 100MW TetraSun facility in Kulim Hi-Tech Park in Kedah currently produces 300W solar modules, and the facility is also said to manufacture five-sixths of the company's solar panels.

Also within Kulim Hi-Tech Park, Panasonic’s own solar panel fully integrated manufacturing facility is also working to produce top class Panasonic HIT solar modules with a production capacity of 300MW.

In response to the expanding global market demand for renewable energies, Panasonic has been expanding its production and has worked to spread the adoption of solar energy globally. Since the start of solar panel production in Kulim Hi-Tech Park in 1997, Panasonic has produced a total of 1 billion solar cells that are used in its HIT solar modules, equivalent to approximately 3GW.

Statistics from the International Energy Agency(IEA) indicate that renewable energy has been on the rise since 2000, with renewable-energy consumption set to rise in years to come.

With a huge market at its doorstep, Malaysia is poised to become one of the world’s foremost suppliers of not just solar panels, but possibly other forms of sustainable energy components well into the future.