The promotion of renewable energy (RE) in Malaysia was previously based on the Small Renewable Energy Power (SREP) programme. Once the feed-in tariff (FiT) programme is in place, the SREP programme will be replaced by the FiT programme.  Existing SREP players will be given the option of either remaining in the SREP programme or transitioning to the FiT programme.

Projects developed under the FiT programme are still eligible for Pioneer Status (PS) or Investment Tax Allowance (ITA). These incentives have been provided from 2001 but have been enhanced over the years. The government has expanded the scope of RE to include photovoltaic (PV) generated power and has extended the range of fiscal incentives (in the National Budgets for 2008 and 2009) to promote the adoption of grid-connected building intergrated PV systems as well as other forms of RE and energy efficiency initiatives.

Types of Incentives

The incentives offered can be divided into two main categories: