This article first appeared in The Edge Malaysia Weekly on September 16, 2024 - September 22, 2024

The idea to launch a Home Solar Subscription programme came after Raj Ridvan Singh, founder and CEO of Sols Energy, paid a visit to the US as a Ford Fellow many years ago.

“I got to study at Columbia University in New York and Yale University for about six weeks [in] this fellowship, and it involved very intense training sessions with top professors ... I went to San Francisco after that, where solar panels were really common,” says Raj.

“Everyone had solar, because why wouldn’t you? It was money saving, [but] what was important to them was that they were trying to reduce their impact on the planet. Recycling and all that is good, but solar has a far greater impact because your consumption [of energy] goes down. So, when I came back to Malaysia, I wanted to push that.”

Specifically, he wanted to introduce solar panels to the public through a subscription programme, which he says is common in the US. The company that leases the solar panels handles the maintenance responsibilities. It is a more affordable and convenient option, where homeowners do not need to pay a hefty upfront cost or worry about the system breaking down.

“If there’s a problem, I can pick up the phone, come over and fix it just like [Tenaga Nasional Bhd (Tenaga) does for] the electricity grid when you have a problem,” Raj says.

This vision came true in February this year, when Sols Energy launched the Home Solar Subscription programme in collaboration with Gentari Sdn Bhd, the clean energy subsidiary of Petroliam Nasional Bhd (Petronas). A year before, a soft launch was done for Petronas employees. The companies say this is the first home subscription service of its kind in Malaysia.

During the first few months of the Home Solar Subscription launch, Raj admitted that most of his clients tend to be from the upper middle-class income bracket, though that was not his intended market.

“To me, [Home Solar Subscription] was for the B40 group … saving RM300 to RM600 a month for them is money that could be spent on tuition fees for their child, an additional school shirt, or protein for dinner,” he says.

This programme is an alternative to homeowners buying a solar panel system outright or getting a loan from banks.

The monthly charge for the subscription plan is RM0.46 per kilowatt hour (kWh) of solar energy generated, which is paid on top of the client’s electricity bill after subtracting the savings that the solar panels provide. In comparison, the standard electricity tariff can cost up to RM0.57 per kWh.

For now, to qualify for Sols Energy’s Home Solar Subscription, one must be a homeowner, have electricity bills above RM300 and be aged 50 or below.

The age limit is due to the subscription service having a 20-year commitment period. On top of this, there is also an RM1,500 security deposit that must be paid and will only be returned in full at the end of the 20 years.

The subscription service qualifies for the government’s Solar for Rakyat Incentive Scheme (Solaris), whereby a cash rebate of up to RM4,000 will be given to residential customers who submit a Net Energy Metering (NEM) application to the Sustainable Energy Development Authority and successfully commission their solar panel system installation with Tenaga.

NEM is the government scheme that allows excess solar energy generated by homeowners to be exported back to the grid on a one-on-one offset basis.

“That means your solar home is actually free for the first year [or] year and a half,” says Raj.

Many banks in Malaysia already offer financing solutions for homeowners to purchase solar panel systems, some with 0% interest instalment plans.

In the long term, a homeowner actually saves less money using the subscription service due to the monthly fee, but it provides a lower bar of entry for installing solar at home, says Raj. “If you have money and you have savings, buy a solar panel system instantly and you can enjoy up to 90% in savings.

“The reason we want to introduce a subscription plan is to help every Malaysian [adopt] solar panel systems.”

Making solar energy widely available has been an uphill battle, Raj says. In 2015, he tried to get banks to offer low-interest loans for lower-income homeowners to afford solar panels, but it was only around four years ago when ESG became a big topic, that all the banks started to offer solar loans, especially for homeowners.

This led Sols Energy to be one of the first to offer loans for residential solar installations, working with Malayan Banking Bhd at the time, he says. But even after securing this collaboration, he found that many Malaysians were not keen on getting solar panels.

Malaysians were hesitant to take out loans or use credit cards to buy solar panels for their homes because they were worried about how it would affect their credit score. Raj saw another opportunity as subscription services became more popular. “It took us [about a] year to build a model [before going to] financers to give us money [for this service].”

But all the banks said it was too risky because it had never been done before in Malaysia. Raj expressed frustration that even after preparing case studies and figures based on the US and European markets, it did little to persuade financiers to their side.

It was only when they got an investor from Singapore that local investors started to become more confident in this endeavour. After that, Sols Energy found a partner in Petronas, and it took two more years to get the service to market. Now the struggle is convincing Malaysians to get onboard, says Raj.

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