Renewable energy in Malaysia: a policy analysis

This paper outlines the development of renewable energy in Malaysia and the institutional framework to support it. The incentives provided for renewable energy are grouped into two categories. Under the Promotion of Investment Act, the incentives granted are pioneer status, investment tax allowance and reinvestment allowance. Depending on the modality of the investment an investor can opt for any of these incentives. Incentives are also given under the approved service projects such as transportation, communications and utility projects, whereby promoters under this category can enjoy tax exemption under Section 127 and investment allowance under Schedule 7B of the Income Tax Act 1967. The barriers to the promotion of renewable energy technologies and the measures to overcome them are also discussed. The paper finally discusses the source-specific concerns and recommended measures to develop renewable energy.