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Outlook for RE bright with more solar PV jobs

Outlook for RE bright with more solar PV jobs

28 Mar 2024

The prospects for the local renewable energy (RE) sector is bright, thanks to the abundance of solar photovoltaic (PV) system engineering, procurement, construction and commissioning (EPCC) jobs, says Kenanga Research.

According to the research house, the outlook for solar EPCC jobs is strong, underpinned by new contracts under the Corporate Green Power Programme (CGPP) estimated to be worth RM2.4bil and the 2GW Large-Scale Solar 5 (LSS5) worth an additional RM5bil.

There is also an extra quota of 400MW under the net energy metering (NEM) scheme, the research house noted.

Under the National Energy Transition Roadmap, the government has set a target of RE making up 70% of total generation capacity by 2050 compared with 25% currently, with an aspiration to achieve net-zero GHG by 2050.

The targets entailed at least 20GW of new RE from now until 2050, of which more than 90% is expected to come from solar.

The government has introduced a list of initiatives to promote investment in solar power generation comprising the Feed-in Tariff programme, NEM mechanism, LSS and CGPP projects.

“Over the immediate term, the flow of PV system EPCC jobs will come from the CGPP with a completion deadline by end-2025, following the completion of LSS4 in end-2023.

“Based on our estimates, the 800 megawatt peak (MWp) capacity under the CGPP will translate to RM2.4bil in PV system EPCC jobs,” the brokerage firm said.

“Subsequently, the Energy Commission will embark on LSS5 with a capacity quota of 2GW, which allows developers to bid for up to 500MW from 50MW previously.

“We estimate that LSS5 will generate RM5bil worth of PV system EPCC jobs, which can keep PV system EPCC contractors busy until 2028.

“In addition, there is a new 400MW quota under the NEM scheme from February to December 2024 to further encourage investment in solar energy assets.

“Businesses, driven by commercial reasons (i.e. to save cost) and environmental, social and governance considerations, have voluntarily invested in solar energy generation assets following the recent hikes in electricity tariffs,” it said.

All in all, Kenanga Research said the prices of solar panels are at historic low while the supply of components is abundant. As solar panel makers struggle to make a profit, PV system EPCC contractors enjoy good margins and are poised for more jobs as cheap solar panel prices stimulate investment in PV systems, it added.

Source: The Star