“It’s very unlikely, almost impossible, to be without solar energy for the next 10 years. The cost of renewable energy has been on the downtrend for many years especially solar and the energy tariff on the other hand has been on the uptrend. The investment payback has dropped from as long as 5-6 years to below 2 years. This phenomenon is expected to continue for years to come…”
In recent years solar energy has emerged as a game-changer for industries seeking to reduce their carbon footprint and enhance their Environmental, Social, and Governance (ESG) status. This encouraging trend is expected to persist as solar technology continues to advance.
In the wake of the solar energy boom, businesses spanning various sectors are now able to access clean and sustainable energy sources, resulting in a multitude of benefits. It comes as no surprise that the three key industries reaping the rewards of solar power align with the pillars of human sustenance and economic prosperity—our most energy-hungry industries.
But before delving into that, it is essential to take the time to comprehend Sunview’s mechanics of incorporating solar energy into businesses in Malaysia. Essentially, there are three distinct ways through which businesses can embrace solar power in the country.
SunValue ZeroCapex - Enjoy the various ESG perks of owning a solar power system with no upfront investment required.
SunVertax Full Ownership - Control your own energy system with a turnkey solution that gives you the freedom to operate and maintain your own solar photovoltaic system.
SunVenture Solar Farm - Bid to generate your own electricity via a large-scale solar farm and sell to the grid.
Find out more at Sunview.
Now, let's look at the top three industries poised to thrive with the advent of solar-powered energy.
First is the Manufacturing industry, being the second largest sector that contributed 22.3% to Malaysia’s gross domestic product (GDP). This industry sector, mainly from iron, steel, cement, glove, food manufacturing, and paper industries, consumes an astounding 92% of total energy consumption, making it a prime candidate for solar energy adoption. By integrating solar panels into their facilities, manufacturers can tap into solar to thrive further in their businesses while contributing to our nation’s growth.
Implementing solar-powered manufacturing processes offers significant advantages, including cost savings, improved operational efficiency, and positioning the industry as an environmentally responsible player. By leveraging solar energy, manufacturing companies can mitigate the impact of electricity tariff fluctuations, especially with the average of 3 - 4% YoY growth for tariff C, D and E, ensuring stability and reducing vulnerability in a competitive market landscape.
Solar power generation can efficiently cater to the energy needs of manufacturing companies, commercial buildings, resulting in decreased electricity costs, substantial long-term financial savings; and ultimately strengthening profitability and financial stability. With the declining cost of self-generation through solar panels, it has become more cost-effective than purchasing electricity from the traditional power grid. This allows business owners to reinvest in automation and new technologies, maintaining a competitive edge in the market over the long term.
Case in point, adopting SunVertax solar system solution has helped our client, Harumi, to achieve great savings and environmental benefits as below:
*The figures are based on estimation from installed system size and solar generation.
Second industry to benefit from solar power is commercial real estate. Commercial properties can significantly enhance their profitability and value by installing solar panels on available surfaces like rooftops and parking structures. This not only makes them eligible for tax incentives, but also increases their appeal to property buyers or potential investors, resulting in higher resale value. While property values naturally appreciate over time, the presence of solar power can possibly further amplify this growth.
The expansion of urbanisation and commercialisation has led to a substantial increase in electricity consumption, particularly with the rise of offices, factories, shopping malls, and entertainment outlets operating extensively. This surge, coupled with the sharp increase in energy costs since 2021, has now reached a critical stage for numerous businesses. For example, an 18.4% rise in utility bills can have a substantial impact on businesses operating with 10% margin, potentially leading to a profit decrease of 20 to 40% or even a shift from profitability to losses.
Consequently, the burden of escalating electricity expenses affects both property owners and tenants, as commercial buildings heavily rely on high-consumption electrical machinery for day-to-day operations. Take shopping malls, for example, which receive bulk supply from utility companies before distributing the electricity to individual tenants. If the initial supply to shopping malls comes at a high cost, this ultimately impacts the billing for all tenants as well.
By adopting solar systems, companies not only drive cost savings and operational efficiency but also enhance their Environmental, Social, and Governance (ESG) rating, positioning them as a responsible and attractive choice for global stakeholders. In today's globalised economy, ESG factors have become increasingly important for companies seeking international collaborations. 59% of investor community indicate that the absence of action on ESG matters increases the likelihood of voting against executive pay agreements while one-third of respondents claim to have already taken such action, as highlighted by a PwC survey. Henceforth, companies that demonstrate a strong commitment to sustainability and elevate the ESG status of commercial properties will attract higher occupancy, positioning them as sought-after choices in the market.
To give a clearer picture of the benefits, let’s talk about the integration of SunValue solar solutions in the Ipoh Parade Mall.
*The figures are based on estimation from installed system size and solar generation.
The third industry that benefits the most from solar energy is agriculture and farming, contributing 7.1% of Malaysia’s GDP. The increase in food prices can be attributed to the rising costs of inputs like fertilisers, chemicals, land, labour, and machinery. While the government protects the prices of petrol and diesel, the price of fertilisers has seen a staggering 70% increase in the past two years, and wages have also risen.
However, businesses can enhance their sustainability by opting for solar systems, which effectively lower operational costs. This cost reduction enables them to allocate more resources towards investing in machinery and technology, thereby improving their overall business operations.
Neighbouring countries have been actively advocating for the benefits of solar systems in agriculture to support sustainable agricultural practices and drive positive change in the industry. In turn, the clean energy produced can be used to power electrical devices for farming like water pumps, irrigation systems, and other agro-tech equipment and appliances.
This gives rise to the popularity of agrivoltaic farming — basically means when solar panels and food crops or farm animal herds are combined on the same land to maximise the land use. By combining farming and power generation, this dual-purpose land utilisation strategy may diminish the argument against utilising farmland for electricity generation.
But even today, agricultural cooperatives are already benefiting from solar power. For instance, agricultural companies, Kong Lee Eng and Xian Leng, have opted for SunValue and SunVertax solar solutions respectively.
*The figures are based on estimation from installed system size and solar generation.
Solar energy presents a myriad of benefits for industries seeking to reduce their carbon footprint and enhance their ESG status. The manufacturing, agriculture and commercial real estate sectors are among those that can leverage solar power to achieve economic savings, operational efficiency, and a greener reputation. By embracing solar energy, these industries demonstrate their commitment to sustainability, align with global climate goals, and position themselves as leaders in responsible business practices.
Don't miss out on this opportunity to join the renewable revolution. Contact us now to learn more.
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