The Benefits of Solar Power in The Manufacturing Sector
Updated: Oct 6, 2021
With the recent release of the International Panel on Climate Change’s (IPCC’s) 6th assessment report on the current climate systems and forecasts, the realization that global warming is intensifying from increasing human activity comes to no surprise but sends alarm bells that signal current progress on climate change mitigation being insufficient.
As a developing country, Malaysia stands in a tight predicament in its socioeconomic focus in the race towards higher living standards. Average temperatures have continued to increase annually, with reliance on fossil fuel burning for energy consumption above 90% for the past 80 years (Our World in Data, 2020). It has, however, pledged to reduce its carbon intensity (GHG emissions per currency GDP) by 45% in 2030 under the revised Intended Nationally Determined Contribution (INDC) to the United Nations Framework Convention on Climate Change (UNFCCC).
Following its recent emissions pledge, the government targets to increase renewable energy contribution to be 11% of total electricity generated by 2030 under the National Renewable Energy Policy and Action Plan effective 2010. As an industrialized market economy, manufacturing accounts for 22% of Malaysia’s GDP, second to services.
The sector is arguably the largest consumer of energy, contributing a hefty third of the country’s total energy consumption by sector and accounts for at least 13% of CO2 emissions – a figure marginally above the world average of 12.6%.
In line with IPCC’s call-to-action, Progressture Solar understands the urgency in addressing the energy-intensive sector with more sustainable and greener solutions for Malaysia to meet its climate mitigation targets. Progressture Solar’s co-founders, Cliff Siaw and Yew Weng also emphasized the importance of corporate responsibility and how businesses (especially in the manufacturing sector) can benefit by utilizing solar energy, as it is “by far the cheapest, fastest, as well as the most effective and scalable form of renewable energy that can be adopted”. In essence, solar power is a resource that should explicitly be harvested in a country that boasts advantageous conditions for solar PV.
As implied, the benefits it brings to the manufacturing sector are numerous; they cover multiple areas that will likely be heavily addressed in the current and future market. Below are some of the more impacted areas that should be taken into consideration when shifting to a more solar-powered production.
Benefits of Solar Energy in Manufacturing Industry
1. Long-Term Cost Reduction in Operations
The Malaysian government has been supportive of the local production, adoption, and utilization of renewable energy as an alternative resource, particularly on hydropower and solar power technology. Many incentives are branched across programs and partnerships, such as the Net Energy Metering (NEM) scheme,
Self-Consumption (SELCO), the Supply Agreement of Renewable Energy (SARE), and the Green Income Tax Exemption (GITE). All of these initiatives reward both producers and users of renewable energy and should be taken as a perfect opportunity to reduce overhead energy costs in the long run, especially in a capital-intensive industry.
2. Increased Energy Efficiency of Solar PV
Solar panel efficiency has been increasing with ongoing technological improvements, with high-quality solar panels able to exceed 22% efficiency. Introducing a solar PV system into manufacturing plants is likely easier than many other commercial building categories; the higher surface area from industrial roof space is ideal for panel installation.
The overall adoption of solar power also encourages and complements energy efficiency habits – an important step in reducing GHG emissions, resource exploitation, and pollution while lowering the cost of exorbitant utility bills.
3. ESG for Investor Relations
Environmental, Social, and Governance (ESG) is a trending investor evaluation in Malaysia in the last few years, with many listed companies already reporting on an annual basis. ESG is an important, quantifiable means to calculating an organization’s social and environmental risks – these metrics are observed by investors, current and potential, and used as an important tool in measuring the organization’s sustainable and ethical practices.
This applies to all industries, even more so in Malaysia’s manufacturing sector that plays a significant role in both the local and global economy. As GHG emissions, energy and electricity consumptions are part and parcel of ESG reporting, early accounting for such metrics as well as the adoption of green energy alternatives will be beneficial for business expansion plans and in gaining a wider investor audience.
4. Contributing to Nationwide and Global Climate Mitigation Efforts
Ultimately, the act of shifting to cleaner, renewable energy significantly reduces one’s carbon footprint. With the IPCC’s latest report warning a ‘Code Red for Humanity’, the fast rate of climate change increasingly burdens all stakeholders to take a firmer stance on environmental sustainability. As part of the larger ecosystem, doing our part as Malaysian citizens and supporting the country’s pledge to reduce carbon intensity should be a universal responsibility and an act to be proud of.
In the current environment where the population continues to grow and resource is scarce, finding and adopting more sustainable and green solutions are ideal courses of action to consider – a single step in adopting a fraction more solar power energy into current systems can make a large difference when observed from a macro point of view.
While one of many renewable energy sources, solar power is still one of the most accessible, green, and sustainable alternatives to the current resource transition we face today. Progressture Solar is on this fast-growing journey of introducing such renewable resources to organizations that are seeking sustainable solutions.
As advocates for greener energy and carbon neutrality, the company strives to aid businesses transition seamlessly towards solar-powered operations by providing comprehensive energy-field services, including financing, consultation, installation, maintenance, and keen observation – essentially being actively involved in climate mitigation efforts.
As solar panel technology and innovation continues to advance, it is an encouraging sign for the market to grab such ready opportunities in addressing both business and environmental sustainability. With GHG emissions rising at a precarious rate, time is seeping out faster than we think – it is now time (or lack thereof) to start embracing greener, environmentally friendly habits in the fast-paced economy of both commercial production and consumption.
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