KUALA LUMPUR (March 28): The government has released the guidelines for its latest solar programme, which allows energy companies to lease rooftop space from homeowners to install solar panels and sell the generated electricity to customers through third-party access to the distribution network.

According to the guidelines for the Community Renewable Energy Aggregation Mechanism (CREAM), this mechanism allows energy companies to source electricity from rooftop panels and sell it to both commercial and domestic consumers within a 5km radius.

Essentially, the CREAM programme is similar to the Corporate Renewable Energy Supply Scheme (CRESS).

Under CRESS, an energy company can negotiate to sell electricity to any commercial or industrial off-taker, which it can deliver using the national grid for a fee known as system access charges (SAC).

In contrast, under CREAM, an energy company can lease residential rooftop space to install solar panels and sell the electricity generated to any customer within the stipulated 5km vicinity.

Energy companies "are required to develop solar photovoltaic generation systems on aggregated residential premises' rooftops,” said the Ministry of Energy Transition and Water Transformation (Petra) in a statement.

These energy companies will also manage the rooftop leasing agreements with homeowners on their own, said Petra.

Participants in the CREAM programme will be charged a flat "community access charge" of 15 sen per kilowatt-hour to use the distribution network.

There is no firm supply requirement.

"To enhance system stability and reduce disruptions caused by increased intermittent solar generation capacity, the electricity utility company will develop localised supply balancing solutions," said Petra. In Peninsular Malaysia, the electricity utility company is Tenaga Nasional Bhd (KL:TENAGA).

The implementation of the programme will remain "cost-neutral" to the electricity supply system and "will not result in tariff increases for electricity consumers," the statement read.

This is welcome news for landed households.

Currently, households can install solar panels under the Net Energy Metering (NEM) programme.

However, the NEM programme only offsets electricity consumption. If a household generates more electricity from its solar panels than it consumes, the excess credit expires after one year.

With CREAM in the picture, a landed house with lower electricity consumption can install solar panels under NEM to offset its bill as well as install solar panels under CREAM to generate rental income.

It was reported that Malaysia's buildings have a potential rooftop solar electricity generation capacity of 34,000MW.

Petra is "confident that the implementation of the CREAM programme will support and act as a catalyst to the energy transition effort for the electricity supply sector, particularly in increasing the share of renewable energy capacity to 40% by 2035 and 70% by 2050."