Added Values of Grid-Connected Solar PV Systems

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Added Values of
Grid-Connected Solar Photovoltaic System
A Technical Report for
A Pilot Project to Study the Performance of
Grid-Connected Solar Photovoltaic System in Malaysia
TNB Research Sdn. Bhd.
RESEARCH (A wholly owned subsidiary of TENAGA NASIONAL BERHAD)
Contract No. TNB 973/97 & PTM 3/99
Filename (Word file) ahh-pv benefits
Prepared by
Ahmad Hadri Haris
Project Leader
Checked & Approved by
TNBR Project Director
Hj Azmi Omar
Senior General Manager
Generation, Environment & QA
Release status FINAL
Date 30th
November 2002 / 24th
March 2003
Distribution list 1. Chief Co-ordinator, Education & Research, TNB
2. Tenaga Nasional Berhad (Corporate Affairs)
3. TNB Distribution Sdn Bhd (TNBD)
4. Electricity Supply Industry Trust Account (MESITA)
5. Suruhanjaya Tenaga (ST)
6. Pusat Tenaga Malaysia (PTM)
7. TNBR Managing Director
8. TNBR Contract Administration Executive
9. TNBR Project File
Digitally signed
by Hadri HarisSignature Not
Verified

Technical Report: Solar PV
Hadri Haris ©2002 TNB Research Sdn Bhd Page no. i of vi
Table of Contents
Table of Contents____________________________________________________________i
List of Tables ______________________________________________________________iii
List of Figures _____________________________________________________________iii
Preface ___________________________________________________________________ iv
Executive Summary_________________________________________________________ v
1.0 Introduction ___________________________________________________________ 1
1.1 Project Brief_______________________________________________________________ 1
1.2 Introduction to Solar Photovoltaic ____________________________________________ 2
1.3 Solar PV Characteristics ____________________________________________________ 3
1.4 Types of Terrestrial Solar PV Applications _____________________________________ 6
1.4.1 Stand-Alone Applications _______________________________________________________ 6
1.4.2 Grid-Connected Applications ____________________________________________________ 7
1.5 Present Status of Grid-Connected Solar PV Applications _________________________ 9
2.0 Added Values of Grid-Connected Solar PV System to the Power Utility __________ 11
2.1 Enhanced Utility Image & Corporate Profile___________________________________ 11
2.2 Reduced Financial Risk ____________________________________________________ 12
2.3 Load Factor Improvement & Demand Side Management ________________________ 14
2.4 Peak Energy Supply Security________________________________________________ 15
2.5 Reduced Infrastructure Costs & Network Losses _______________________________ 17
2.6 Improved Supply Quality & Reliability _______________________________________ 18
2.7 New Business Opportunities_________________________________________________ 19
3.0 Added Values of Grid-Connected Solar PV System to Malaysia_________________ 21
3.1 Sustainable Development & Environmental Protection __________________________ 21
3.2 Energy Supply Security & Reliability _________________________________________ 22
3.3 Local Industry Development & Employment Growth____________________________ 24
3.4 Support to National Energy Efficiency Initiatives _______________________________ 25
3.5 Providing Electricity with Care to Social Development __________________________ 26

Hadri Haris ©2002 TNB Research Sdn Bhd Page no. ii of vi
4.0 Added Values of Grid-Connected Solar PV System to the Public________________ 28
4.1 Producing Own Electricity – Safely & Reliably _________________________________ 28
4.2 Simple System with Long Life Span __________________________________________ 30
4.3 Aesthetically Pleasing ______________________________________________________ 31
4.4 Enhanced Personal Status & Image __________________________________________ 32
5.0 Conclusion ___________________________________________________________ 33
References

Hadri Haris ©2002 TNB Research Sdn Bhd Page no. iii of vi
List of Tables
Table 1.3-a : Typical & Maximum PV Module Efficiencies [3]..............................................................................5
Table 1.3-b : Summary of Advantages and Limitations of Solar Photovoltaic........................................................6
Table 2.2-a : Investment Cost, Risk & Return Profile of Peak Power Generators [8]..........................................13
Table 3.2-a : Distribution of Annual Solar Radiation Pattern in Malaysia [6] ....................................................24
List of Figures
Figure 1.2-1 : Theory of Solar Photovoltaic ...........................................................................................................2
Figure 1.2-2 : Photovoltaic Cell, Module and Array ..............................................................................................2
Figure 1.3-1 : PV Output & Temperature Vs Solar Radiation & Ambient Temperature ........................................3
Figure 1.3-2 : Typical Electrical Connection for a Grid-Connected PV System.....................................................4
Figure 1.3-3 : Cost Reduction of PV Module & System ..........................................................................................4
Figure 1.3-4 : PV Module Price Vs Efficiency ........................................................................................................5
Figure 1.4-1 : Solar PV for Rural Home, Parking Meter & Street Light ................................................................7
Figure 1.4-2 : Distributed and Centralised Grid-Connected PV Systems...............................................................8
Figure 1.4-3 : World Growth of PV Applications....................................................................................................8
Figure 1.5-1 : BIPV Applications............................................................................................................................9
Figure 1.5-2 : Significant BIPV Installations in Malaysia ....................................................................................10
Figure 2.1-1 : Growth of PV Systems within TEPCO Service Areas.....................................................................11
Figure 2.3-1 : Electricity Production Profiles of a PV System in Malaysia..........................................................15
Figure 2.3-2 : Daily TNB Load Curve & Impact of 200MWp of Grid-Connected PV ..........................................15
Figure 2.4-1 : TNB Load Duration Curve – Despatching.....................................................................................16
Figure 2.4-2 : Power Profiles of a Single PV System Vs a Group of Distributed Systems....................................16
Figure 2.6-1 : Recorded Voltage Waveform and Vrms from an Inverter ..............................................................18
Figure 2.7-1 : Growth of World PV Production...................................................................................................20
Figure 2.7-2 : Profiles of Residential Electricity Demand Vs PV Electricity Production.....................................20
Figure 3.2-1 : Power Generation Mix in Malaysia ...............................................................................................22
Figure 3.3-1 : World PV Cell & Module Production in Year 2000.......................................................................25
Figure 3.4-1 : PV Modules Incorporated as Building Architecture ......................................................................26
Figure 3.5-1 : Solar Town in Japan (Matsudo City) .............................................................................................27
Figure 4.1-1 : Net Metering...................................................................................................................................29
Figure 4.2-1 : PV Modules Installation onto Roof ................................................................................................30
Figure 4.3-1 : Premises with PV Integrated Roofs................................................................................................32

Hadri Haris ©2002 TNB Research Sdn Bhd Page no. iv of vi
Preface
This report is one of the main technical reports prepared for this R&D project :
System description of pilot grid-connected solar PV systems
Performance analysis of pilot grid-connected solar PV systems
Economics assessment and strategy for grid-connected solar PV systems
Added values of grid-connected solar PV systems
This report is based on the research conducted and experiences gained, as well as literature
reviews, correspondences, discussion, and exchanges of knowledge on PV related issues with
experts from the following, but not limited, organisations :
Institute : International Energy Agency (IEA) – Photovoltaic Power Systems
Programme (PVPS)
New Energy Foundation (NEF)
Japan Quality Assurance Organization (JQA)
Fraunhofer Institute for Solar Energy Systems
Utility : Tokyo Electric Power Corporation (TEPCO)
PV Industry : Sharp Corporation
IBC Solar AG
Shell Solar Pte Ltd (previously Siemens Showa Solar Pte Ltd)
University : Universiti Sains Malaysia (USM)
Universiti Kebangsaan Malaysia (UKM)
Universiti Teknologi Mara (UiTM)
Although the report covers the necessary details on the subject, more elaborate and detail
independent studies are required in order to quantify the benefits and added values of the grid-
connected solar photovoltaic system.
This pilot R&D project is implemented by :
TNB Research Sdn. Bhd.
No. 1, Lorong Ayer Hitam, Kawasan Institusi Bangi, 43000 Kajang, Selangor.
Project Leader : Ahmad Hadri Haris (ahadri@tnrd.com.my)

Hadri Haris ©2002 TNB Research Sdn Bhd Page no. v of vi
Executive Summary
Conventionally, solar PV is used as a stand-alone application to provide electricity at places
where the electricity grid network is not available. Since early 1990, the solar PV is also used
to supplement the utility electricity supply by interconnecting the PV system with the utility
grid. This application is called grid-connected solar PV where it is becoming very popular due
to issues on greenhouse gasses (GHG) emission. Today, the grid-connected solar PV
installations around the world have surpassed the numbers of the stand-alone systems by more
than double.
The majority of the grid-connected solar PV systems are applied as distributed systems
instead of centralised systems. The smaller capacities of distributed PV systems provide
opportunity to integrate the PV into the building architecture. Thus, the PV technology could
serve dual purposes, as the building element and as the electricity source. This PV integration
led to a new term called building integrated photovoltaic or BIPV.
Although the cost of BIPV is still very expensive, the application has its own merits and
advantages. The BIPV relies on sunshine to generate energy. Therefore, the fuel supply is
totally free and unlimited. The system operation is also very quite, does not produce any
emission and requires absolute minimum maintenance. The ability of the PV system to
produce electricity very close to the point of consumption ensures that electrical losses are
kept to a minimum level, thereby promoting energy efficiency. Nevertheless, the electricity
output from the system is very dependent to the availability of the sunlight and is beyond
human control. Additionally, the system operating efficiency is less than 12%.
Nonetheless, the grid-connected solar PV system or BIPV could provide multitude benefits.
The utility could gain the most benefit through the reduced financial risk. Installations of
BIPV by the public may satisfy a portion of the peak power demand. Furthermore, the utility
will not have to bear those capital costs and could defer the investment of future peak power
generators. More importantly, the utility would be able to reduce the dependence on natural
gas as the peak fuel resource.

Hadri Haris ©2002 TNB Research Sdn Bhd Page no. vi of vi
The utility supported PV application would also strengthen the Government-utility
relationship as well as enhancing the corporate image. Because environmental pollution is a
major world concern, direct involvement of any utility in RE and EE would indirectly
improve its market value. Unlike other RE technologies, BIPV application is very simple and
does not generate substantial technical issue to the utility or public. Availability of relevant
guidelines and the related technology development ensures that the PV application is safe and
reliable. However in the short-term, the utility may endure some reduction of electricity sales.
Nevertheless, these issues may require further analysis and would be more than compensated
by the long-term BIPV benefits.
The BIPV development would benefit the nation from the point of sustainable development
and environmental protection. The PV would provide additional source of energy where the
supply is secured, reliable and free. This would reduce the nation and utility dependence to
conventional fossil fuels, where the price would fluctuate and the supply could be interrupted.
Subsequently, the technology development could also spur towards local industry growth.
This would lead to creation of new business and job opportunities. The public would then
benefits from these developments, as the technology cost becomes more competitive. As the
BIPV would be limited in capacity, the capital cost is more affordable to the public. Supports
from the utility would ensure faster payback for those investments while the PV could be
integrated into the house to improve its appearance. However, the BIPV is generally
perceived as very costly to the public and detrimental to the utility revenue. Hence, more
detail studies would be able to verify those perceptions.
Additionally, further detail and more elaborate independent studies could be focused towards
the following subjects :
Impact of large penetration of distributed BIPV to utility network and power system;
Application of BIPV as a secondary power during power outage for the domestic sector.
Ultimately, a utility that is involved in the vertically integrated business of generation,
transmission and distribution of electricity would gain the most benefits as the PV application
would directly address both issues of electricity generation and distribution. However, further
awareness and information dissemination would be critical to make people appreciate and
understand the advantages and limitations of the BIPV technology.

Hadri Haris ©2002 TNB Research Sdn Bhd Page 1 of 34
1.0 Introduction
1.1 Project Brief
This is an applied research project to study the application of grid-connected solar
photovoltaic (PV) system in Malaysia. The interest was particularly generated due to the
issues on global warming and Kyoto Protocol, together with the awareness on Germany’s
1000 Rooftop Program and Japan’s Sunshine Program. Through this project, the potential
benefits and commercial opportunities of the PV system would be identified and elaborated.
In all, six locations were installed with grid-connected solar PV systems within the duration of
this project. These installed systems became the references for the evaluation as well as
system demonstrations. The project is also a pilot study for future development of grid-
connected solar PV systems in Malaysia.
The total cost of this project is almost RM3 million and is equally funded by Tenaga Nasional
Berhad (TNB) and Malaysia Electricity Supply Industry Trust Account (MESITA)1
. The
project started in September 1997 and the first pilot system was commissioned in August
1998. The total duration of this project is 3 years. Nevertheless, it was agreed during a
Technical Review Committee Meeting in December 2000 to extend this project until 31st
August 2002.
The objectives of the project are as follows :
To demonstrate technical capability of grid-connected solar PV systems in Malaysia;
To evaluate commercial viability of grid-connected solar PV systems in Malaysia;
To further develop technical competencies of researchers in grid-connected solar PV
systems;
To study the benefits of grid-connected solar PV systems to Tenaga Nasional Berhad;
To study the benefits of grid-connected solar PV systems to Malaysia;
To study the acceptance of grid-connected PV systems among power system operators;
To study the acceptance of grid-connected PV systems among the public.
1
A trust account with members from electricity producers in Malaysia, and under the authority of Ministry of Energy,
Communications and Multimedia Malaysia.

1.2 Introduction to Solar Photovoltaic
Sunlight is the most abundant renewable energy source on our planet. The photovoltaic, or in
short PV, converts the sunlight (photon) directly into electricity. A PV cell is made of
semiconductor material, most commonly silicon. When the PV cell is exposed to light
(photon), electrical charges are generated and this can be conducted away by electrical
conductor as direct current (d.c.). This process of converting light (photons) to electricity
(voltage) is called the photovoltaic effect.
Figure 1.2-1 : Theory of Solar Photovoltaic
The electrical output from a single PV cell is small, usually around 0.6Vd.c. Therefore,
multiple PV cells are connected together to provide more useful electrical outputs. PV cells
connected in this way are encapsulated usually behind a glass to form a weatherproof PV
module. A single PV module could be made to generate power between 10Wp to 300Wp.
Multiple PV modules then could be connected together as PV string or PV array in order to
provide sufficient power for common electrical uses. To utilise the electrical energy generated
in alternating current (a.c.) form, the direct current (d.c.) generated by the PV array is
converted into a.c. by an electronic equipment called inverter.
Figure 1.2-2 : Photovoltaic Cell, Module and Array
Solar PV Cell Solar PV Module Solar PV Array

1.3 Solar PV Characteristics
Solar PV is probably the most benign method of power generation known today. The PV
produces absolutely no emission and uses the unlimited resource of the free sunshine as its
fuel. Since sunshine is available everywhere whenever there is a sun, theoretically, the PV
applications have no boundary. The PV system also has no moving part. Thus, the operation
of a PV system is very quiet, clean and requires almost no maintenance. Today, most PV
modules are guaranteed to last between 20 to 30 years.
A PV module would generate d.c. electricity whenever it is exposed to direct sunshine. The
amount of power generated is proportional to the intensity of the solar irradiation, but it could
also be affected by ambient temperature. A 100Wp solar PV module would produce 100Wd.c.
power at Standard Test Condition (STC), i.e. at direct exposure to 1000W/m2
of solar
radiation with air mass of 1.5AM and the PV cell temperature is at 25°C. However, this ideal
condition is difficult to achieve. In a tropical climate country such as in Malaysia, the
maximum solar radiation is typically between 800W/m2
to 1000W/m2
, but the ambient
temperature could be as high as 40°C at noon, resulting in a 60°C PV cell temperature. Hence,
the 100Wp PV would only produce a maximum of 80Wd.c. power at times.
Figure 1.3-1 : PV Output & Temperature Vs Solar Radiation & Ambient Temperature
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PV Temp Ambient Temp
Solar radiation ↑, Ipv ↑, Ppv ↑ 1°C ↑, 0.4% ηpv ↓
Source: TNBR
PV power output (ac)
Solar radiation
Ambient temperature
PV cell temperature

When an a.c. power is needed, such as in the case of grid-connected applications, the PV
strings would be connected to an inverter. Today’s inverter has an operating efficiency of
between 80% to 95%. Since the inverter is an electronic device, the quality of a.c. power
generated is very high with pure sinusoidal wave at a unity power factor.
Figure 1.3-2 : Typical Electrical Connection for a Grid-Connected PV System
Source: TEPCO
Unfortunately, the cost of PV is still very high. The cost is currently the main obstacles for the
wide application of solar PV. The high cost is largely contributed to the manufacturing
process. To make the PV price economically competitive or affordable, the manufacturers
require high demands for the PV modules. Hence, PV is trapped in a ‘chicken and egg’
situation. Nevertheless, over the last two decades, the cost of PV has reduced tremendously
and will continue to decrease due to major research and development in advanced materials
and manufacturing techniques.
Figure 1.3-3 : Cost Reduction of PV Module & System
Source: U.S. Dept of Energy (FEMP) Source: IEA-PVPS [3]

In addition, the operating PV efficiency is still very low at about 5% to 16%. Together with
balance of the system (B.O.S.), the total efficiency would drop by another 1% or 2% (for a
grid-connected PV system). Typically in Malaysia, a 1kWp grid-connected PV system with a
total system efficiency of 10% would generate about 100kWh of electricity in a month. This
low efficiency means that the system would produce lesser energy yield. Hence the
investment on the PV system may require longer time to be recovered. Nevertheless, the low
efficiency has no effect on the running cost, as the fuel is totally free and constantly available.
Significant R&D works have also produced PV modules with higher efficiency. But the
challenge remains to improve the efficiency while maintaining or reducing the PV prices.
Table 1.3-a : Typical & Maximum PV Module Efficiencies [3]
Type of PV module
Typical PV module
efficiency (%)
Maximum efficiency
recorded (%)
Maximum efficiency recorded
in laboratory (%)
Single crystalline silicon 12 – 15 22.7 24.7
Multicrystalline silicon 11 – 14 15.3 19.8
Amorphous silicon 5 – 7 N/a 12.7
Cadmium telluride N/a 10.5 16.0
CIGS N/a 12.1 18.2
Figure 1.3-4 : PV Module Price Vs Efficiency
Source: U.K. Scolar Programme

Table 1.3-b : Summary of Advantages and Limitations of Solar Photovoltaic
Advantages Limitations
Environmentally friendly
Fuel is free and unlimited
Applicable anywhere whenever there is a sun
Simple and easy to use
Operation is quiet and clean
Requires almost no maintenance
Guaranteed to last 30 years
Relatively high price
Low efficiency
Power density is limited by solar radiation
and temperature
1.4 Types of Terrestrial Solar PV Applications
Terrestrial solar PV applications could generally be divided into two categories as follows :
Stand-alone applications
Grid-connected applications
Each category could be further subdivided into :
Stand-alone Grid-connected
Domestic applications
Consumer applications
Distributed system
Centralised system
1.4.1 Stand-Alone Applications
Stand-alone domestic PV systems provide electricity to households in remote areas. The
system provides basic electricity for lighting, refrigeration and other low power loads. These
applications have been installed almost everywhere in the world, especially in rural area of
developing countries. The PV is often the most appropriate technology to meet the energy
demands of isolated communities. Stand-alone PV systems generally offer an economic
alternative to the extension of electricity distribution grid at distances of more than 1 or 2km
from existing power lines.

Consumer PV applications were the first commercial application for terrestrial PV systems.
They provide power for a wide range of applications, such as watches, calculators,
telecommunications, water pumps, navigation aids, aeronautical warning lights and etc. These
are applications where small amounts of power have a high value, and thus the PV is price
competitive. Today, the PVs have also been applied to streetlights, parking meters and even
cars2
.
Figure 1.4-1 : Solar PV for Rural Home, Parking Meter & Street Light
PV for Rural Electricity Parking Meter Solar Street Light (TNBR)
1.4.2 Grid-Connected Applications
Distributed grid-connected PV system is a relatively recent application where a PV system is
installed to supply power to a building or other load that is also connected to the utility grid.
The system usually feeds electricity back into the utility grid when electricity generated
exceeds the building loads. These systems are increasingly integrated into the built
environment and are becoming commonplaces because of the huge economic potential. They
are used to supply electricity to residential homes, commercial and industrial buildings. The
PV capacity installed is usually dependent to the budget or existing space available.
Compared to the stand-alone applications, system costs are lower as energy storage (battery)
is not required, a factor that also improves system efficiency.
2
Carmakers such as Mercedes, Audi and VW have incorporated PV into the sunroofs of their luxury cars to
provide additional electricity and to cool the cars when parked under a hot sun.

Figure 1.4-2 : Distributed and Centralised Grid-Connected PV Systems
Distributed Grid-Connected PV (TNBR) Centralised Grid-Connected PV (Germany)
These distributed applications also provide advantages such as :
The distribution losses are reduced because the systems are installed at the point of use,
No extra land is required for the PV systems,
Costs for mounting systems can be reduced, and the PV array itself can be used as a
cladding or roofing material.
Centralised grid-connected PV systems have been installed for two main purposes :
As an alternative to centralised power generation from fossil fuels or nuclear energy,
Or, to strengthen the utility distribution grid.
Utilities in number of countries were interested in investigating the feasibility of these types
of power plants. Demonstration plants have been installed in Germany, Italy, Japan, Spain,
Switzerland and the USA, generating reliable power for utility grids and providing experience
in the construction, operation and performance of such systems. However, utility interest is
now tending to focus on distributed PV plants and thus, few centralised plants have been
started since 1996.
Figure 1.4-3 : World Growth of PV Applications
Source: IEA-PVPS [3]

1.5 Present Status of Grid-Connected Solar PV Applications
Environmental pollution is a great concern to the world today due to global warming
phenomenon. As a result, the United Nations Framework Convention on Climate Change
(UNFCCC) and Kyoto Protocol are signed and ratified by many countries including Malaysia,
as efforts to reduce greenhouse gasses (GHG) emission. One of the main sources of GHG is
from power generation. Therefore, environmentally friendly and renewable power generation
technologies are currently being developed and applied throughout the world. Nevertheless, it
would be almost impossible to totally substitute the conventional fossil fuel power plants.
Therefore, these new technologies are only supplementing the electricity production and
subsequently help to reduce GHG emissions from the power generation sector.
Traditionally, solar PV is utilised in remote areas to provide basic electricity needs. However,
to make the effort to reduce GHG more effective, it is becoming very rational to operate the
solar PV in the urban area and connect it to the electricity grid. Currently, there are many
grid-connected PV applications throughout the world especially in Japan, Europe and USA.
For this application, the solar PVs are integrated into the buildings and houses, either as part
of the building or by retrofitting. Thus, the systems are known as Building Integrated PV or
BIPV.
Figure 1.5-1 : BIPV Applications
Building (Germany) School (Japan) Residential Home (Gemany)

Until end of 2000, 712MWp of solar PV had been installed in 20 of IEA-PVPS3
participating
countries. 62% of these installations are connected to the grid. The 1990 and 1999 German
Photovoltaic Programmes resulted in a total installed capacity of 100MWp of grid-connected
PV in Germany. However, Japan recorded the world highest growth of grid-connected PV
installation with a total installed capacity of 255MWp. 62MWp of grid connected PV is
connected to Tokyo Electric Power Company (TEPCO) grid network in 2000 compared to
34MWp in 1999. In the USA, the Government announced a 10 year plan to install 1 Million
solar energy system on public roofs in 1998. By end of 1999, there are already 40MWp grid
connected PV installed in USA.
In Malaysia, the first BIPV was installed in 1998. TNB Research Sdn. Bhd. (TNBR) installed
a 3.15kWp BIPV on the rooftop of College of Engineering, Universiti Tenaga Nasional, as
one of the six pilot systems for the R&D project. During the same year, an 8kWp BIPV and a
5.5kWp BIPV were installed by BP Malaysia and Universiti Kebangsaan Malaysia (UKM)
respectively. A family of a TNB senior officer was the first family in Malaysia to experience
BIPV at their homes in Port Dickson when a 3.15kWp system was installed in August 2000.
Today, there are about 430kWp of BIPV installed in Klang Valley, most notably the TNBR’s
2.8kWp BIPV at the residence of the Chairman of the Energy Commission (ST), and the
362kWp BIPV by Technology Park Malaysia.
Figure 1.5-2 : Significant BIPV Installations in Malaysia
Residence of Chairman, ST (TNBR) Technology Park Malaysia (PJI Holdings Bhd)
3
The Photovoltaic Power Systems Programme (PVPS) is one of the collaborative R&D Agreements established
within the International Energy Agency (IEA).

2.0 Added Values of Grid-Connected Solar PV System to Tenaga
Nasional Berhad (Utility)
2.1 Enhanced Utility Image & Corporate Profile
Corporate positioning and image are important strategic factors for most industries around the
world today. For the last three decades, the global warming phenomena and the energy supply
security are the two most important issues in the world, and would continue to be so in the
foreseeable future. Thus, an involvement in PV is currently being used by major corporate
organisations to illustrate the commitment to the environmental protection and as a sign that
the organisation is dynamic and innovative. This is demonstrated by the huge commitment to
PV from major oil companies such as BP and Shell, and the leading utilities such as Tokyo
Electric Power Company (TEPCO). TEPCO’s commitment to PV has resulted in 62MWp of
grid-connected PV systems installed within its service area by year 2000.
Figure 2.1-1 : Growth of PV Systems within TEPCO Service Areas
37 702
4,278
17,131
33,891
62,064
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
1992 1993 1994 1995 1996 1997 1998 1999 2000
Years
PVInstalledCapacity(kW)
Subsequently, the Government of Malaysia is committed to introduce renewable energy (RE)
as Malaysia’s fifth fuel (in addition to the conventional fuels of oil, gas, coal and hydro).
During a keynote address at the Malaysian Electric Power Forum in July 2001, the Prime
Minister, YAB Dato Seri Dr Mahathir Mohamad, stressed the importance to pursue a growth
strategy that places high priority in protecting and leaving a resource-rich environment for the
benefit of the younger generations. Thus, Malaysia has set a target for RE to contribute as
much as 5% to the national energy balance by 2005. Based on the 2001 statistic, the 5% target
would require an RE capacity installation of about 650MW.
Source: TEPCO [9]

2.2 Reduced Financial Risk
Another significant advantage of the PV system to TNB is on the financial benefits. Today,
TNB is utilising gas turbine and hydro as the peak power plants. Recently, TNB is also
investing into a pumped storage power plant. These power plants require expensive capital
investments from TNB while they also have low utilisation factors (except for pumped
storage). In the case of gas turbine, the operation and fuel costs are also very expensive.
Therefore, TNB is exposed to high financial risks due to the large capital requirement, loan
interests and lower returns. In contrast, the PV systems are installed and maintained by the
consumers. The public and industry would mainly provide the capital financing. Thus, solar
PV would supply the required peak capacity (provided enough capacity is installed) without
imposing additional financial risk to TNB.
The modularity of the PV system allows smaller system to be installed today and could be
expanded at a later time. Furthermore, the system could be operational within a week of
installation (for every 10kWp or smaller system). The supply of the main equipment however,
may take between two to three months. Nevertheless, the construction period is still very
short.
This modularity and short lead-time would provide TNB the ability to follow the load growth
more closely. By incrementally adding the PV system, TNB could reduce the period of over
capacity whenever a large conventional power plant is built, or when the country is
experiencing an economic downturn. The risks associated with under utilised assets due to
reduction of electricity demand may considerably add to TNB operation costs. The excess
peak capacity could also lead to premature retirement of older plants and therefore, reduce the
investment returns.

Table 2.2-a : Investment Cost, Risk & Return Profile of Peak Power Generators [8]
Criteria Gas turbine Peak Hydro Solar PV (Distributed System)
Capital requirement per system
Power capacity per system
Construction risk
Site risk
Plant life
Operation cost
Environmental risk
System efficiency
Fuel supply risk
Fuel cost
Maintenance requirement
Payback period
Medium
High
Medium
High
Short
High
High
High
High
High but subsidised
High
Short
High
High
Very high
Very high
Long
Low
High
Very high
Low
None
High
Long
Very low
Very low
Very low
None
Long, but limited by inverter
None
None
Very low
None but cannot control
None
Very low
Long
Over the years, building loads of electricity consumers would continue to increase. This may
require TNB to upgrade its electrical infrastructures to satisfy the increasing load demands for
safety from overloading. Unfortunately, these upgrades are always very costly. Perhaps, the
use of solar PV may reduce the needs to upgrade the infrastructures. With the modularity of
the PV system, the system capacity could be easily expanded provided that there is enough
roof space available. This option could be more economically viable to TNB rather than
upgrading the electrical cables.
In addition, PV system eliminates financial risk associated with management overheads on
fuel supply, legal costs and the fuel price or supply uncertainty. It is also important to realise
that the price of natural gas sold to TNB for power generation is highly subsidised. If the
subsidy were removed, the gas price would increase dramatically and immediately imposed a
huge financial burden to TNB.
In contrast, PV has no fuel cost and is currently not subsidised. Perhaps if the same subsidy is
shared between the gas price and PV capital cost, the PV system could immediately become a
very attractive investment. Unfortunately, the PV systems continue to be assessed from an
engineering economics perspective, whereas the use of capital asset pricing models (CAPM)
would give better evaluation of the PV system [1].

2.3 Load Factor Improvement & Demand Side Management
In addition to the 5% RE target, the Government has also announced its strong commitment to
promote energy efficiency. This is signified with the recent establishment of Energy
Commission (to replace the Department of Electricity & Gas Supply), and the amendment to
the Energy Supply Act. TNB, as the major player in the electric supply industry, is expected
to contribute significantly to the EE activities and to support the Government objectives. This
would ensure Malaysia to grow into a developed nation with a strategy that would satisfy the
demand for reliable and quality electricity supply, while preserving the environment.
To a utility, demand side management (DSM) could play an important role in supporting the
energy efficiency initiatives. One of the objectives of DSM is to improve the utility load
factor, and on this particular that the grid-connected PV systems could contribute. Typically,
the highest load demand is recorded during the hottest period of a day due to the air
conditioning load. At the same time, the power generation from the PV is dependent to the
sunshine and peaks at the same hottest time. Thus, the PV systems could directly act as a peak
clipping to the utility, i.e. to reduce the peak power requirement.
Hypothetically, a 200MWp of distributed grid-connected PV systems would be able to
improve the load factor by 0.6%4
. This could be achieved with a minimum capital
requirement to TNB, as the consumers would provide the required investment. In this case,
the financial implication to TNB is to purchase the electricity from one PV system owner and
to sell it to adjacent consumers who need the power. Indirectly, this would also help TNB to
defer the necessity to build a new peak power plant to a later time.
4
Based on a pilot system, and could be further improved as the PV system is optimised and developed for
tropical application.

Figure 2.3-1 : Electricity Production Profiles of a PV System in Malaysia
On a clear day On a cloudy day with rain in the evening
Source: TNBR
Figure 2.3-2 : Daily TNB Load Curve & Impact of 200MWp of Grid-Connected PV
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
00:00
01:00
02:00
03:00
04:00
05:00
06:00
07:00
08:00
09:00
10:00
11:00
12:00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
00:00
Hours
Demand(MW)
Source: TNB & TNBR
2.4 Peak Energy Supply Security
Solar PV is using sunlight as its fuel where the fuel supply is unlimited and totally free.
Therefore, TNB is basically guaranteed on the security of the fuel supply for one of its peak
power sources. The power production from the PV system is also very reliable. Most PV
modules today are guaranteed to last between 20 to 35 years, but the question remains on the
inverters. Nevertheless, the inverters could be easily replaced and they could be covered by a
warranty or insurance. Thus, TNB could actually substitute some portion of peak energy
generated by gas turbine with energy from solar PV. This would allow TNB to reduce the
needs for gas fuel, which is very expensive.
With 200 MWp PV acting
as peak clipping
Load Curve in 1999
Load Curve in 2001

Figure 2.4-1 : TNB Load Duration Curve – Despatching
Source: TNB [8]
Typically, the power output from a single solar PV system would greatly fluctuates due to the
environmental effect, especially in a tropical region. This phenomenon usually generates a
concern over the stability of the power system network. Nevertheless, the power produced by
the single PV system is very small and would have no effect to the network. In addition, the
power produced by a group of PV systems within an area would be fairly constant where the
power fluctuations due to cloud cover are smoothen. Hence, while increasing TNB’s profile,
the distributed PV systems could also provide a higher capacity value to TNB, as verified by
several other studies conducted in Japan and Germany [1].
Figure 2.4-2 : Power Profiles of a Single PV System Vs a Group of Distributed Systems
Source: Fraunhofer ISE [2]
Gas turbine could be substituted with solar PV (100MWp)

2.5 Reduced Infrastructure Costs & Network Losses
The typical PV system is a low voltage (LV) system. Hence, one of the main advantages of
grid-connected PV system is that the system installation requires no upgrade to the existing
electricity infrastructure. The PV modules are fixed to existing roofs and the rest of the
equipment are attached to a small area on a wall or inside a cabinet. The system could be
easily connected to the electricity grid via any of the existing electrical point available within
the premise. Even the electricity meters are not changed, if net metering concept is applied.
This ensures that TNB does not need to modify its electrical system to accommodate the PV.
In the case of other RE applications, which are mainly medium voltage (MV) systems, TNB
may need to provide interconnection infrastructure to be able to receive the power from those
REs. On this consideration, it would be easier for the utility to work with the PV system.
Figure 2.5-1 : PV Array on a Roof & Inverters on a Wall
Source: TNBR
Since the PV generates power very close the consumption points, the electricity produced
only needs to travel in a very short distance. Thus, the electrical losses due to the length of the
cable are very low. Even if the PV power is transmitted to another houses, the distance is
much shorter than transmitting power from a substation. The generated power also means that
less power is required from the TNB substation. Subsequently, the electrical transmission and
distribution losses could be significantly reduced, as slightly less power is transmitted
compared to the normal method of power transmission where the total distance could be more
than several kilometres. Additionally, the utility supplied electricity voltage of a premise that
is at the very end of the electricity distribution network could be also strengthen if a PV
system is installed there.

2.6 Improved Supply Quality & Reliability
The heart of a grid-connected PV system is the inverter. It is an electronic device that controls
the energy conversion and power synchronisation between PV system and the grid.
Subsequently, the electricity produced by the inverter is a pure sinusoidal wave with a unity
power factor (once synchronised and in ‘Maximum Power Point’ mode). Most inverters use
the utility voltage and frequency signals as references to operate and to synchronise. They
also conform to various international standards such as DIN, IEC or IEEE. The total harmonic
distortion (THD) produced is typically less than 4%. Thus, the PV system supplies high
quality electricity to the consumers. This is significant as more electricity consumers are
becoming very aware of the electricity quality issues, especially the electronics industry. This
was demonstrated by Technology Park Malaysia (TPM) where they installed a 362kWp PV
system to provide quality and reliable electricity to their sensitive loads (computers).
Figure 2.6-1 : Recorded Voltage Waveform and Vrms from an Inverter
Source: TNBR
The whole PV system is installed and owned by the owner who pays the cost (mainly the
electricity consumers). However, it is very important to have a regulation that requires the
system to be checked and approved by the utility, Energy Commission or authorised
personnel. This is to ensure that the PV system is correctly install and safe to operate.
Nevertheless, the owner is responsible for the system maintenance (although PV requires
almost no maintenance). Thus, if a 60MWp of PV systems are installed in Klang Valley, as in
the case of TEPCO, the whole PV systems that virtually acts as a peak clipping, would be
owned and maintained by TNB customers. This would allow TNB to focus more on other grid
infrastructures and appropriately channel the budget saved to improve the power system.
Ultimately, the electricity supply would become more reliable and efficient.

2.7 New Business Opportunities
The PV market development would provide new business opportunities to TNB. The
knowledge and experience gained would allow TNB to offer technical expertise, consultancy
services and technology transfer to the other ASEAN countries. This is because the grid-
connected PV application is still very new or non-existence among these countries. The
immediate potential countries are Singapore, Thailand, Brunei, Indonesia and Philippines.
Malaysia is currently one of the main world producers of computer chips. The same material,
but with a lower quality, is actually used to make the PV cell. Currently, the PV cells are
produced in Japan, USA, Europe and India. Nevertheless, there are also other countries,
including Malaysia, which produced silicon wafers. Those silicon wafers could also be
manufactured into PV modules and sold within the local market or to other parts of the
worlds. Hence, TNB could possibly venture into the PV manufacturing business together with
a right partner. Several international companies such as RWE Solar, IBC Solar, and Sharp
Corporation have previously mentioned the interest. The business potential is presumably
good as currently the world demand for PV modules is increasing.
The PV-grid inverter could also be the alternative for TNB business venture. This is because
the electronic components of the inverter are cheaply and easily available in the local market.
Currently, TNB Research is undertaking a ‘seeding’ project to develop a low cost prototype
inverter. However, it is extremely important to create and stimulate the PV application market
and support infrastructures before venturing into the manufacturing business. Thus, the
business venture could first develop through local market and subsequently expand to the
world market.

Figure 2.7-1 : Growth of World PV Production
Opportunity is also available to TNB to work together with housing developers to incorporate
PV into the residential homes. This would significantly reduce the PV capital cost, improves
the values of PV to the homeowners, and creates mass market for the PV application. In
return, TNB would be able to venture into a new business within the housing development
industry that could also lead to many other possible attractive business ventures.
The PV application could also allow TNB to introduce a special electricity tariff. In order to
reduce the payback period for a PV system, the PV needs to generate better returns. This
could be achieved if the electricity is sold to TNB at a higher price. Here, TNB could
introduce a peak/off-peak tariff specifically for premises with PV system. With the right
pricing and formula, TNB may be able to reduce the domestic sector subsidy and perhaps
would be able to gain at times when the premise consumes more electricity than what the PV
is generating.
Figure 2.7-2 : Profiles of Residential Electricity Demand Vs PV Electricity Production
Source: TNBR

3.0 Added Values of Grid-Connected Solar PV System to Malaysia
& The Government
3.1 Sustainable Development & Environmental Protection
In May 1992, the world’s Governments adopted the United Nation Framework Convention on
Climate Change (UNFCCC). That was the first step to address the critical environmental
problem of global warming. Then on 11th
December 1997, the parties to the convention
adopted the Kyoto Protocol; a treaty that would require industrialised nations to reduce their
emissions of greenhouse gasses (GHG) according to specific targets and schedules.
Nevertheless, the UNFCCC Conference of the Parties (COP 4) in November 1998 has
significantly address the issue on developing countries participation. Hence, until July 2002,
84 countries have signed the Kyoto Protocol with 76 countries have rectified it5
. Malaysia has
also signed the Protocol on 12th
March 1999.
The characteristic of solar PV makes it one of the best options to reduce GHG. In a long term,
PV is one of the most attractive and versatile emissions free electricity technology options.
Hence, many countries have included some PV programmes in their GHG reduction strategies
such as in Japan and Germany. The emissions reduction benefits offered by PV depend on the
PV technologies used and the energy sources that it replaces. Typically, a 1kWp of a grid-
connected solar PV system in Malaysia could generate about 1,200kWh of electricity
annually. This is equivalent to about 0.84 tonne of CO2 avoided, based on the assumption of
1MWh of electricity is equivalent to 0.7 tonne of CO2 emission.
Hypothetically, if 40,000 residential homes throughout Malaysia were installed with 5kWp of
grid-connected solar PV systems, those houses would provide 200MWp of total PV installed
capacity. These numbers of houses are equivalent to 0.87% of TNB’s domestic customers
(total of 4,603,079 based on 2001 statistic). The 200MWp PV installed capacity would be able
to generate 240GWh of electricity annually and contribute 31% to the total RE target of
650MW (5% of national energy mix). This generated electricity is equivalent to 2.3% of the
electricity demand from the domestic sector (of 10,649GWh, based on 2001 statistic).
5
Signing the Kyoto Protocol does not impose an obligation to implement the protocol.

This would mean that about 168 kilo-tonnes of CO2 emission would be avoided from the
power generation sector, with carbon trade value of RM3.192 million per annum (based on
CDM equivalent trade value of US$5 for every tonne CO2). Over the PV system lifetime
period of thirty years, CO2 emission that would be avoided would amount up to 5 million-
tonnes with carbon trade value of RM95.8 million. Additionally, the PV would also reduce
the life cycle of SOX emissions by 90% and NOX emissions by 50%, thus promoting the clean
air objectives to reduce air pollution [1].
3.2 Energy Supply Security & Reliability
The current National energy supply policy objectives are to ensure adequate, secure and cost
effective energy supply. This policy was derived as a result of the oil crisis in 1970s.
Subsequently, in early 1980s Malaysia introduced a four-fuel diversification policy. The aim
is to reduce the dependence on oil, while ensuring a secure and reliable supply of fuel. These
four fuels are oil, natural gas, hydro and coal. As a result, oil share in the power generation
mix has reduced from 85% in 1980 to 8% in 1999. Significantly, utilisation of natural gas has
risen from a mere 1% in 1980 to 71% in 1999. One of the main reasons for the high rate of
growth for natural gas is due to the tremendous reserve available in Malaysia.
Figure 3.2-1 : Power Generation Mix in Malaysia
8%
71%
12%
9%
85%
1%
14%
0%
Oil
Natural Gas
Hydro
Coal
Fuel mix in 1999Fuel mix in 1980
Source: Ministry of Energy, Communications & Multimedia [11]

Nevertheless, the total Malaysia’s oil and gas reserves are about 17.5 billion barrels of oil
equivalent (as of January 2000) [12]. Based on the energy consumption trend in Malaysia, the
gas reserve is expected to last for another 45 years and the oil reserve is for another 12 years.
It is anticipated that Malaysia would become a net importer of oil by 2008. Therefore, to
maintain the energy supply objective, Malaysia introduced a new energy mix strategy for
power generation under the 8th
Malaysia Plan. The target is to further reduce the oil and gas
dependencies for power generation, while increasing the coal percentage and introducing a
fifth fuel of renewable energies (RE).
The application of RE technologies in Malaysia would be based on their merits in relation to
Malaysian condition. It is expected that most of the 5% target for RE (650MW of installed
capacity) would be met by Biomass from palm oil industry. This is because Malaysia
produces tremendous amount of palm oil residues that need to be destroyed. Currently there
are already 330 palm oil mills that have co-generation capabilities to generate more than
300MW of electricity, as indicated by a DANCED study for the Malaysian Government [11].
Recently, the crude palm oil could also be mixed with fossil fuels for the combustion process
of power generation, as proven by tests conducted by TNB Research Sdn Bhd. This would
subsequently improve the palm oil price in the world market. The other good potential of RE
applications in Malaysia are :
Wood residues, due to the strong wood industry in Malaysia;
Municipal waste as refuse derived fuel (RDF), as means to solve the domestic waste
disposition problem;
Solar thermal and solar PV, due to the constant availability of sunshine;
Mini or micro hydro, due to high availability of small rivers in Malaysia.
Solar thermal and solar PV are possibly the best options for middle or long term energy
supply security and reliability. This is because the primary source of energy is the sun and the
sun predictably rises around 7 o’clock in the morning and sets at about 7 o’clock in the
evening. This scenario allows approximately 12 hours of free energy source everyday to
Malaysians to utilise. However, cloudy sky, rainy days and haze would significantly affect the
energy production from the solar system.

Table 3.2-a : Distribution of Annual Solar Radiation Pattern in Malaysia [6]
Pattern Definition Distribution
Clear Days of clear sky with direct sunlight to the ground 15.7 %
Part cloudy Days with occasional cloud blocking direct sunlight 51 %
Afternoon rain Days with rain in the afternoon 16.5 %
Full cloudy & rain Total overcast days with occasional rain 13.7 %
Special case
Days with occasional extreme solar radiation due to
cloud and atmosphere effect
2.8 %
Nevertheless, the equipment required to tap the sunlight energy is relatively simple, easy to
use and expandable. The system costs are continuously decreasing and they are now
affordable to some people, even without any subsidy or incentive. Hence, majority of the
public could apply the RE technologies at their homes. If only 1 million of the total TNB
domestic customers (4,603,079 in 2001) installed a 3kWp of BIPV at their homes, Malaysia
would immediately have 3,000MW of PV generation capacity. Realistically, Malaysia needs
to actively promote solar energy and other RE applications, as well as and providing the
necessary strategies, for RE to become another option for secured and reliable energy source
in immediate future.
3.3 Local Industry Development & Employment Growth
The cheapest 1kWp grid-connected solar PV system in Malaysia today would cost about
RM21,000 with a potential to reduce to RM16,000 as the demand increases in future. From
that figure, almost 84% would be transferred out from Malaysia in terms of foreign exchange.
This is because the major component of PV panels and inverter that make up the 84% are
currently imported. Nevertheless, there is a good potential for Malaysia to become the PV
panel and inverter manufacturer. The basic infrastructure to produce PV panel and inverter are
readily available within Malaysia. For example, Universiti Sains Malaysia (USM) is actively
researching into local made PV cell and panel since 1980s, whereby the technology could be
used to mass produce PV panels. Today, BP Solar Malaysia is assembling PV panel at a
factory in Shah Alam with a production capacity of 5MWp annually. In terms of inverter,
TNB Research Sdn Bhd is currently trying to produce a locally made and low cost inverter.

Figure 3.3-1 : World PV Cell & Module Production in Year 2000
Business venture into PV panel and inverter manufacturing would provide important benefits
to local industry development and new employment prospects. A local PV application market
would encourage international PV related companies such as Sharp, IBC Solar and RWE
Solar to invest in setting up manufacturing plants in Malaysia. Malaysia would be preferred
by the companies as the basic resources are readily available and would subsequently reduce
the logistical costs. The investment would indirectly stimulate local industry to support the
PV markets through mechanical and electrical services. Based on a study conducted in 1996,
the European Commission anticipated a world-wide employment of 261,000 by 2010,
provided that the PV market continues to grow at 20% annually. In Malaysia, a 200MWp of
grid-connected PV system would directly create a local industry worth more than RM2 billion
over the next several years. More importantly, Malaysia could also become one of the world
leader on PV related technologies.
3.4 Support to National Energy Efficiency Initiatives
The grid-connected solar PV applications would indirectly contribute towards National
energy efficiency objectives. The PV system would be able to reduce electrical losses, as the
power is produced very near to the consumption points. The benefits would also improve and
assist the demand side management targets. Furthermore, the PV applications provide the
opportunity to introduce zero-energy building.

The current National target of energy index is 135kWh/m2
/year. Hence, a building could be
designed to be very energy efficient with the installation of energy efficient equipment.
However, the building would still consume some amount of energy. To offset this energy
consumption, power generators would need to be installed to meet the required energy
demand of the building. Integrated PV applications provide a practical solution where the
solar PV could be installed as the roof, cladding, walls and windows of the building. Not only
the energy index would be reduced, the building could also be made more beautiful and
unique through the PV integration.
Figure 3.4-1 : PV Modules Incorporated as Building Architecture
Germany Japan Switzerland USA
3.5 Providing Electricity with Care to Social Development
PV application would most likely be one of the preferred choices as the power generator
among environmentally conscious public. The only stumbling blocks for that to happen are
the relatively high capital cost and lack of awareness on the technology application.
Nevertheless, one factor that distinguishes PV application in comparison to other power
generation and even RE technologies is the site requirement. The PV system could be applied
without having any use of land space. This is because the system could be installed on almost
any available premises and buildings.
In a high-density township, or when finding a suitable location to build a new power
generation plant is a problem, the PV application would be the ideal solution. The required
power capacity from the power generator could be achieved when many PV systems are
installed on many premises and buildings, or when the total PV system efficiencies improve.

Thus, instead of reclaiming additional land space to expand the power generation capacity, the
PV system could be installed on existing premises to meet the energy capacity requirement.
Hence, the required land could be use for other purposes or used to build a building with PV
integration that would also produce power. This would certainly be a very important factor in
a country where land space is very scarce and expensive, such as in Japan.
Figure 3.5-1 : Solar Town in Japan (Matsudo City)
Source: Sharp Corporation
Additionally, to provide electricity to every home is one of the most important obligations of
the Government. In many places, the electricity is supplied via electricity supply network of
transmission and distribution cables though the services of the local utility. Nevertheless,
there are places where the electricity grid is not yet available. These places are usually in the
rural areas, where the electricity needs is basic rather than a necessity. Conventionally, the
homes in rural areas would be supplied with limited electricity generated from stand-alone
diesel generator sets and solar systems. These systems are typically small in power capacity
but also very expensive.
Today, the Government is subsidising the cost of the solar systems installed in rural areas.
However, with the commercial application of grid-connected PV systems in urban areas, the
costs of the solar systems would also reduce. Indirectly, the Government would be able to
either reduce the subsidy for the rural electrification or install more systems with the same
amount of budget.

4.0 Added Values of Grid-Connected Solar PV System to the
Public
4.1 Producing Own Electricity – Safely & Reliably
The PV systems allow the electricity consumers to produce their own electricity for their own
consumption, as well as to supply electricity to other adjacent loads via the utility network.
This could be achieved without modifying the electrical system of the premises. At the same
time, the electricity production from the PV is managed automatically by the inverter. More
importantly, the electricity is produced from free and unlimited supply of fuel. Thus, the
consumers would be free from the task of managing the system and its fuel supply.
Furthermore, the experiences from the local pilot PV systems have proven that the PV system
is safe to install and operate. Nevertheless, electricity is always dangerous. Additionally, the
d.c. electricity produced by the solar PV poses higher risk in comparison to the a.c. electricity.
Hence, it is strongly recommended that the system is installed and maintained by only
competent people. This should be a common practice, but ought to be further improved with
greater awareness, as well as with adequate competency training and certification on the PV
systems.
The PV applications also provide the opportunity to the public to become micro independent
power producers (micro IPPs). This concept is getting popular among many developed
countries through the distributed generation approach. Whenever electricity is produced by
the PV system, the electricity would first be distributed to any operating load within the
premise. Should there be no electricity demand within the premise, the electricity produced by
the PV would be transferred to the electricity grid and passed to other nearby loads. However,
to the premise owner, he is actually selling PV produced electricity to the utility. At night-
time or when the load demand is higher than the PV production, the premise would then
import back the electricity that was sold earlier. In a way, the utility grid acts as infinite
battery storage to the PV system. This also allows the PV system to operate without a battery.

At the end of a period when the premise owner is billed by the utility, the owner could
become a net electricity exporter if the energy produced by the PV system were more than the
energy consumed from the utility. This scenario was experienced by a family that has one of
the pilot PV systems installed at their premise in Port Dickson. In many developed countries,
there are already commercial infrastructures in place that would allow the PV system owners
and utility to benefit from the PV produced electricity.
Figure 4.1-1 : Net Metering
Two Meters Concept (Japan) Single Meter Concept (TNBR)
Most current practices today are for the inverters to cease from functioning whenever an
outage occurs. This is to prevent an islanding6
phenomena and for safety reason. However,
there are some inverters today that come with built-in switching control and power storage
that would allow the system to operate during an outage. This would allow continuous supply
of PV electricity, although limited, to some of the critical loads within the premise. Thus, the
consumers could be ensured of a reliable supply of electricity and could prevent any financial
loss due to the power outage.
Nevertheless, this type of application has yet to be tested in Malaysia and is currently not
recommended until the local consumers and the utility are fully aware of PV applications, and
when the utility has a proper islanding detection system in place. Otherwise, the consumers
must ensure that any PV power produced during an outage is not transmitted back to the
utility grid.
6
Islanding occurs when a premise is supplying power to the utility grid at a time when the grid is actually
experiencing an outage (no power supply from the utility).

4.2 Simple System with Long Life Span
The PV system is very simple to install and operate. The experiences on the pilot PV systems
showed that a small capacity PV system (less than 5kWp) could be operated by the end of the
third installation day. Typically, a PV system for residential applications would require about
a week for the installation, while the supply of the main equipment (PV modules and inverter)
would take up between 6 to 10 weeks. Furthermore, the system installation is done without
any modification to the existing electrical wiring of the premise. In fact, the output of the PV
system could be directly connected to an existing electrical socket.
The modularity of the PV system also allows for easy expansion of the system to satisfy the
needs for a bigger power capacity. Thus, the owner who is limited by a budget could install a
small system today, and later expand the power capacity whenever the opportunity arises, for
as long as there is enough roof space. In comparison to the other RE applications, the PV
system could be considered to be an affordable investment to the public. Due to its
modularity, the PV system typically sold in small power capacity to satisfy the needs of the
general residential consumers. Thus, the smaller capacity system is more affordable to the
general public compared to installing other types of RE systems. This allows the
environmentally conscious public an opportunity to directly contribute towards protecting the
environment. The rapid world development on PV technologies also ensures that the cost is
continuously decreasing, to the benefits of the public.
Figure 4.2-1 : PV Modules Installation onto Roof
Source: TNBR

Once installed and operated, the PV system could last for a very long time. Many branded PV
modules such as BP Solar and Shell Solar carry warranty up to twenty-five years.
Nevertheless, the inverter (electronic equipment) may not last that long. However, from the
experiences on the installed pilot systems, most inverters are found to be still working well
into the fourth consecutive years. In addition, PV manufacturers have conducted impact tests
on glass cover of the PV module to ensure that it would not easily break.
Since the PV system operates electrically, the system has no moving part and consequently
does not generate any wear or tear, as well as does not require any lubrication. Thus, the
system operation is very quiet and the owner is not required to conduct maintenance on any
part of the system. Perhaps, the only thing that the owner may need to do is to spray water and
simply clean the surface of the PV modules, once in every six months. These advantages
allow the PV systems owners to enjoy the benefits of the electricity generation without
experiencing any disturbance to their normal life. In many cases, once the PV system is
installed, the owner would sometimes forget that there is a PV system generating electricity at
his premise.
4.3 Aesthetically Pleasing
The crystalline surfaces of the PV modules are very beautiful to most eyes. Thus, the PV
modules installed on the roof would actually enhance the appearance of the premise.
Recently, the PV modules are incorporated into the premise architecture through the concept
of BIPV. This concept expands the integration of PV modules as the roof, as building facade
and even as building products. Hence, a wide variety of PV products have been developed due
to the architectural needs. These include variety of PV module colours, simple structures to
support PV modules, PV tiles and shingles, and PV as shading devices. Thus, new premises
have the best opportunity to be designed with maximum integration of solar PV as the
building elements.

Additionally, a premise with well design PV integration could result in cheaper costs for the
total premise and PV systems. The PV modules could substitute for the conventional roof tiles
and other expensive façade systems. Thus, by integrating the PV into the building, the owners
would be able to save and offset the building material costs to the PV systems. Furthermore,
the operating PV system would produce electricity and provide more savings to the owners.
Today, it is possible for the public to apply the concept as demonstrated by one op the pilot
systems and a PV-roof integration project implemented by a local architect firm. Existing
financial loans also allow the public to obtain the necessary financing through the home or
home renovation loans.
Figure 4.3-1 : Premises with PV Integrated Roofs
The First PV Integrated Roof in Malaysia, 1999 (TNBR) 2nd PV Integrated Roof, 2002 (NLCC Architect)
4.4 Enhanced Personal Status & Image
Today, there are more people who are very concerned of the environmental degradation and
pollution. Issues on air pollution and greenhouse emissions are getting more publicity from
the media lately. As an individual, the public could only support the cause through efficient
use of electricity. Nevertheless, the solar PV applications provide direct means to the public to
generate greater impact to the cause by self-producing electricity. This PV produced
electricity is very environmentally friendly and would also improve the electricity supply
efficiency. Thus, public with solar PV systems installed at their homes would have more
significant contribution to protecting the environment.
Additionally, the PV systems are still relatively expensive. Thus, not everybody could afford
to own the system. Thus, a PV system installed at ones home would also enhance the status
symbol of the owner. The neighbourhood would perceive the homeowners as someone who
cares about the environment and have a high status in the society.

5.0 Conclusion
Solar PV systems have been applied in Malaysia since early 1980s. However, the applications
are mainly concentrated on stand-alone systems, especially for the rural electrification
program. Currently, the grid-connected solar PV application in Malaysia is still at the
demonstration stage, where the first pilot system was installed and commissioned in 1998.
Learning from experiences of other countries such as Japan and Germany, it is vital to note
that more demonstration activities and concentrated efforts must be implemented to further
develop the grid-connected PV application in Malaysia. Only then, the benefits of the system
application would become significantly tangible.
The key parties that would significantly influence the grid-connected PV development in
Malaysia are the public and the utility. The public, mostly from the residential sector, is
important as they are the people who would install and own the PV systems at their premises.
Nevertheless, the utility is also important as the solar PV system generates electricity that
requires the infrastructure and tariff support of the electricity grid network. In addition, the
Government must act to promote and encourage the public and utility to be involved in the
grid-connected PV applications through various incentives or promotion program. However,
the role of the Government is limited and would cease when the solar PV application becomes
commercially competitive and market driven.
It took Japan and Germany about ten years to move the PV application into commercial stage
in those countries. Perhaps, it would also take the same amount of time in Malaysia.
Nevertheless, it is very important that efforts and proper strategy are undertaken from now in
order to arrive at the commercial stage later. This is because the PV systems have significant
potentials to be successful in Malaysia. The generated added values from the systems would
ultimately provide a win-win situation to the utility and to the public, with final benefits to
Malaysia and its citizen.

The grid-connected PV systems provide multitude benefits especially to the key parties. The
public would be able to install the system at their homes and generate electricity. Thus,
opportunity would arise for the public to sell higher value of electricity to the utility. The
utility on the other hand, would be able to benefit from the reduced financial risk in supplying
peak electricity. Furthermore, the PV system application would indirectly improve TNB’s
electricity supply infrastructure. Incidentally, the Government would be able to gain benefits
from the sustainable development of electricity supply industry. Additionally, the building,
services and manufacturing industries would also gain benefits, although the values are not
discussed in this report.
Nevertheless, further detail and more elaborate independent studies should be conducted in
order to quantify the benefits and added values of the grid-connected solar photovoltaic
system. The studies could focus, but not limited, to the following subjects :
Impact of large penetration of grid-connected PV systems as distributed generation to
utility network and power system;
Under utilised assets and financial implications to the utility due to grid-connected PV
systems penetration;
Study on infrastructure requirement and impact of special tariff and incentives for
electricity generation from grid-connected solar PV systems;
Assessment and demonstration of building integrated PV as a secondary power to critical
loads of domestic sector during power outage.

References
[1] IEA-PVPS, 2001, Added Values of Photovoltaic Power Systems, Task 1 Report IEA-
PVPS T1-09:2001.
[2] W. Heydenreich, E. Weikem, H.G. Beyer, K. Kiefer, 1998, Power Characteristics of PV
Ensembles : Experiences from the Combined Power Production of 100 Grid Connected
PV System Distributed over the Area of Germany, 2nd
World Conference & Exhibition
on Photovoltaic Solar Energy Conversion, Austria.
[3] IEA-PVPS, 2001, Trends in Photovoltaic Applications in Selected IEA Countries
between 1992 and 2000, Task 1 Report IEA-PVPS T1-10:2001.
[4] IEA-PVPS, 1999, Literature Survey and Analysis of Non-Technical Problems for the
Introduction of Building Integrated Photovoltaic Systems, Task 7 Report IEA-PVPS 7-
01:1999.
[5] New Energy Foundation, 2001, New and Renewable Energy in Japan.
[6] Prof Dr Mohd Yusof Othman, Dr Kamaruzzaman Sopian, Dr Baharudin Yatim, 2001,
Renewable Energy Sources in Malaysia, Seminar on New & Renewable Energy
Development & Utilization for Global Environment Protection, Kuala Lumpur.
[7] T. Schoen, D. Prasad, D. Ruoss, P. eiffert, H. Sorensen, Status Report of Task 7 of the
IEA PV Power Systems Program.
[8] Pian Sukro, 2001, Power Generation & The Role of The Private Sector, Malaysian
Electric Power Forum, Kuala Lumpur.
[9] Tokyo Electric Power Company, 2001, Commitment to PV.
[10] Ministry of Energy, Communications & Multimedia Malaysia, 2000, National Energy
Balance Malaysia (1980-1999).

[11] DANCED, 2000, Support to the Development of a Strategy for Renewable Energy as
the Fifth Fuel in Malaysia, Completion Report.
[12] Thiyagarajan Velumail, 2001, Recent Development in Energy Efficiency in Malaysia,
National Seminar on Low Energy Office (LEO) Buildings, Kuala Lumpur

Added Values of Grid-Connected Solar PV Systems

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