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THE USE OF WILLINGNESS-TO-PAY (WTP) METHOD TO IDENTIFY POTENTIAL FOR USE OF SOLAR ENERGY NORLEEN FARIZA BINTI ABDOL MULOK A report submitted in partial fulfillment of the requirements for the awards of the degree of Master of Engineering Faculty of Civil Engineering Universiti Teknologi Malaysia JUNE 2008

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THE USE OF WILLINGNESS-TO-PAY (WTP) METHOD TO IDENTIFY

POTENTIAL FOR USE OF SOLAR ENERGY

NORLEEN FARIZA BINTI ABDOL MULOK

A report submitted in partial fulfillment of the

requirements for the awards of the degree of

Master of Engineering

Faculty of Civil Engineering

Universiti Teknologi Malaysia

JUNE 2008

iii

ACKNOWLEDGEMENT

I would like to express my gratitude to all those who gave me the possibility

to complete this thesis. for their stimulating support. There are some people who

made this journey easier with words of encouragement and more intellectually

satisfying by offering different places to look to expand my theories and ideas. I am

deeply indebted to my supervisor Dr Mohd Badruddin whose help, stimulating

suggestions and encouragement helped me in all the time of research for and writing

of this thesis.

My friends that supported me in my research work. I want to thank them for

all their help, support, interest and valuable hints. I cannot end without thanking my

family, on whose constant encouragement and love I have relied throughout my

time. They have always supported and encouraged me to do my best in all matters

of life.

iv

ABSTRACT

Solar energy is one of the renewable energy systems that are the most

environmentally friendly means of providing electricity. Developing countries such

as in Asia has experiencing spectacular economic growth over the past two decades.

Improvement in living standards increases the demand for electronic appliances and

others for living comfort. This will result in the pressure of energy demand. One of

the ways to improve the energy efficiency is by the use of clean energy such as solar

energy as a real solution. Presently, the common issue in developing Asian countries

is subsidies for fossil fuels which have been the obstacle to the penetration of

renewable energy. As for this study, Kuala Lumpur has been chosen as the study

area. This study focused on the awareness of the public on the solar energy and their

willingness to pay (WTP) and use through observation and survey. For this study,

one hundred and twenty respondents were involved. Result shows that the level of

awareness is high (83%). Result shows 26.2% WTP of RM 5,000; with a mode value

of RM 4,140. A linear correlation exists between marital status and family income on

how much people are willing to spend. Higher family income and single respondents

tend to have higher WTP. However, overall interest on solar energy depends on

income and gender. Those with higher personal income are more interested in this

technology. It also shows that female have higher interest in solar energy.

v

ABSTRAK

Tenaga solar merupakan salah satu tenaga yang boleh diperbaharui dan

sumber yang tidak menyebabkan pencemaran alam untuk menghasilkan tenaga

elektrik. Negara yang sedang membangun seperti negara-negara di Asia sedang

mengalami pembangunan ekonomi yang pesat. Taraf hidup yang semakin

meningkat turut meningkatkan permintaan untuk peralatan elektronik dan

sebagainya untuk keselesaan hidup. Ini akan menyebabkan permintaan tenaga

menjadi tinggi. Salah satu cara untuk mengatasi masalah ini adalah dengan

menggunakan tenaga solar sebagai penyelesiannya. Pada masa sekarang, masalah

utama yang dihadapi oleh Negara-negara sedang membangun di Asia adalah subsidi

untuk bahan bakar yang menjadi penghalang kepada kemasukan penggunaan tenaga

boleh diperbaharui. Kuala Lumpur telah dipilih untuk menjadi kawasan kajian

untuk kajian ini. Kajian member focus kepada tahap kesedaran orang awam

mengenai tenaga solar dan kesanggupan untuk membayar (KUM) menggunakan

kaedah kajian melalui boring soal selidik. Seramai seratus dua puluh orang

responden terlibat. Keputusan kajian menunjukkan tahap kesedaran adalah tinggi

(83%). 26.2% dari nilai KUM adalah RM 5,000, dengan mod RM 4,140. Terdapat

regrasi linear antara status perkahwinan dan pendapatan keluarga dengan KUM.

Pendapatan keluarga yang tinggi dan responden yang belum berkahwin mempunyai

nilai KUM yang lebih tinggi. Minat atau kecenderungan terhadap tenaga solar pula

dipengaruhi oleh pendapatan individu dan juga gender. Kajian menunjukkan

mereka yang berpendapatan tinggi lebih berminat dengan tenaga solar. Kajian juga

menunjukkan bahawa kaum perempuan mempunyai minat yang tinggi terhadap

tenaga solar.

vi

TABLE OF CONTENTS

CHAPTER TITLE PAGE

DECLARATION ii

ACKNOWLEDGEMENT iii

ABSTRACT iv

ABSTRAK v

TABLE OF CONTENTS vi

LIST OF TABLES ix

LIST OF FIGURES x

LIST OF APPENDICES xii

1 INTRODUCTION

1.1 Statement of Problem 1

1.2 Objectives of Study 2

1.3 Scope of Study 4

1.4 Limitation of Study 4

1.5 Significance of Study 4

2 LITERATURE REVIEW

2.1 Introduction 6

2.2 Status of Electricity in Malaysia 10

2.3 National Energy Policy 13

2.4 Climate Change 13

2.5 Solar Cell Performance in Malaysia 16

2.6 Malaysia Building Integrated Photovoltaic 17

vii

(MBIPV)

2.7 Barriers and Challenges in Developing 19

renewable energy in Malaysia

2.8 Contingent Valuation Method 20

2.9 Willingness To Pay 21

3 METHODOLOGY

3.1 Introduction 22

3.1.1 Objectives 24

3.1.2 Scope 25

3.1.3 Limitation 25

3.2 Data Requirement 25

3.2.1 Preliminary Data 26

3.2.2 Secondary Data 26

3.3 Research Design 27

3.3.1 Preliminary Data Collection 27

3.3.2 Data Collection 27

3.3.3 Result Analysis 28

3.4 Questionnaire Study 28

3.5 Case Study 30

3.6 Data Interpretation 31

3.7 Expected Findings 32

4 RESULT AND ANALYSIS

4.1 Introduction 33

4.2 Descriptive Statistical Analysis 33

4.2.1 Background of respondents 34

4.2.2 Awareness and Knowledge of Solar 40

Technology

4.2.3 Willingness To Pay (WTP)/Invest/ 53

Finance

4.3 Case Study 59

4.4 Reliability Test 63

4.5 Inferential Statistical Analysis 64

viii

4.5.1 Bivariate 64

4.5.1.1 Interest 64

4.5.1.2 Willingness-to-pay (WTP) 65

4.5.2 Regression 66

4.5.2.1 Interest 66

4.5.2.2 Willingness-to-pay (WTP) 68

5 CONCLUSIONS

5.1 Introduction 70

5.2 Level of awareness of solar energy 71

5.3 The potential for use of solar energy 72

5.4 Willingness-to-pay for Solar Technology 73

5.5 Conclusion 74

5.6 Limitation of the Study 75

5.7 Recommendation 76

6 REFFERENCE 77

ix

LIST OF TABLES

TABLE NO. TITLE PAGE

2.1 A presentation on technologies and emission 10

factors by type, (2000 MW)

3.1 Sections in the questionnaire 29

3.2 Five-level Likert Scale 31

4.1 Background of the respondents 39

4.2 Analysis for information on environmental 42

pollution can be informed effectively

4.3 Support needed to improve knowledge about 46

renewable energy technologies (RETs)

4.4 Primary motivation for installing solar power in 50

percentage

4.5 Average point 50

4.6 Analysis for most important consideration when 53

purchasing an energy installation

4.7 Problems associated with solar energy 63

4.8 Reliability Statistics 63

4.9 Data correlation 65

4.10 Data correlation 66

4.11 Model Summary 67

4.12 Model for Interest 67

4.13 Model Summary 68

4.14 Model for WTP 68

x

LIST OF FIGURES

FIGURE NO. TITLE PAGE

2.1 Solar Thermal Technology 7

2.2 Conversion of sunlight into electricity by

photovoltaic cells 7

2.3 Photovoltaic panel to generate electricity for 8

residential use

2.4 New housing development with photovoltaic 8

panel installation

2.5 Solar heater to heat water for domestic use 8

2.6 Trends in electricity consumption in Malaysia 11

2.7 Electricity generation fuel mix in Malaysia 12

2.8 Melting water streams from an iceberg, Greenland 15

2.9 Side-by-side images of Northern Hemisphere Sea 16

ice extent for two dates in the satellite record.

2.10 Malaysia average BIPV Price/kWp 18

3.1 The overall processes involved in the project 23

3.2 Houses that utilizes part of their electricity from 30

solar energy

4.1 Percentage of respondents based on gender 34

4.2 Age of respondents 34

4.3 Racial background of respondents 35

4.4 Education background of respondents 35

4.5 Marital status of respondents 36

4.6 Religious background of respondents 36

xi

LIST OF FIGURES

FIGURE NO. TITLE PAGE

4.7 Occupation of respondents 36

4.8 Personal income of respondents 37

4.9 Family income of respondents 38

4.10 Monthly electrical bill of respondents 38

4.11 Interest in a photovoltaic (solar electric) system 40

4.12 Energy generated from oil, nuclear power and 41

coal causes environmental pollution

4.13 Information on environmental pollution can be 42

informed effectively

4.14 Sustainable energy / clean energy / renewable 43

energy sources (RES), do not pollute the environment

or harm people (do not release CO2 emissions)

4.15 A solar device works with diffused light 44

4.16 Awareness on MBIPV (Malaysian Building 44

Integrated Photovoltaic)

4.17 Renewable energy installation in respondents’ city / 45

town / village

4.18 Support needed to improve knowledge about 46

renewable energy technologies (RETs).

4.19 Homebuilders should offer solar power as an 47

option for all new homes

4.20 Solar power can be used to turn the lights on and 48

heat water

xii

4.21 Solar can power electric devices such as computers 49

or appliances

4.22 Primary motivation for installing solar power 49

4.23 This survey improves respondent knowledge 51

on solar energy

4.24 Most important consideration when purchasing 53

an energy installation

4.25 Preferences in assistance to obtain financing 54

4.26 Respondents expectation of the price of solar 55

energy installation

4.27 Willingness to pay 56

4.28 Respondents expected period of return for 57

investment

4.29 Reconsider to involve in solar energy 57

4.30 Points of improvement to reconsider 58

4.31 Type of solar technology installed 60

4.32 Exposure on the technology 60

4.33 Number of users on their estimation of return 61

period for the investment

4.34 Problems associated with solar energy 62

5.1 Willingness to pay 73

xiii

LIST OF APPENDICES

APPENDIX TITLE PAGE

A Set of Questionnaire ( Future User) 79

B Set of Questionnaire ( Existing User) 85

C Anova 91

D Correlation 92

CHAPTER 1

INTRODUCTION

1.0 Introduction

Nowadays it is becoming increasingly clear that human activity is

changing the global climate. Even though natural processes have contributed to

global climate changes to some extent it is extremely unlikely that the scope of

this changes during the last century could be solely attributed to natural factors

(Ganopolski, 2005). The problem is mainly caused by the energy resources we are

predominately using. Solar energy is expected to play a major role in the future of

electricity production.

1.1 Statement of Problem

Electrical power is an ideal kind of energy in that it can be easily supplied

to the customer and converted into other kind of energy. Traditional means of

burning fuel to generate power however is accompanied by chemical and

2

radiation contamination that causes defect to the environment (Andreev et al.,

1997). Fossil fuel provides the majority of the world’s requirement.

Presently, Malaysia is well endowed with energy supply. Electricity

generation is mostly fossil-based, which are natural gas and oil in particular which

so far has been able to meet the country’s demand for energy. Primary energy

supply in 2000 was 50,658 kilotonnes of oil equivalent (ktoe) and it shows an

increase to 54,194 ktoe in 2003. Final energy demand, increased from 29,996 ktoe

in 2000 to 34,568 ktoe in 2003. Demand for electricity increased from 60,200

GWh in 2000 to 71,159 GWh in 2003. It is assumed that the demand for

electricity in Malaysia will further grow in the future (Jafar et al., 2007).

Fossil-based source of electricity such as natural gas and oil produces

CO2, SO2 and NOx as their by-products. The emission of these pollutants into the

environment causes harmful effect to human health, flora and fauna and also to

buildings.

The traditional means of generating electrical power also contribute to

thermal pollution. Common cause of thermal pollution is power plants and

industrial manufacturers that use water as coolant. Thermal pollution is the

degradation of water quality by any process that changes ambient water

temperature. Thermal pollution is usually associated with increases of water

temperatures in a stream, lake, or ocean due to the discharge of heated water from

industrial processes, such as the generation of electricity. Increases in ambient

water temperature also occur in streams where shading vegetation along the banks

is removed or where sediments have made the water more turbid. Both of these

effects allow more energy from the sun to be absorbed by the water and thereby

increase its temperature. There are also situations in which the effects of colder-

than-normal water temperatures may be observed (Farret et al., 2006).

3

Warm water typically decreases the level of dissolved oxygen in the water.

The decrease in levels of dissolved oxygen can harm aquatic animals such as fish,

amphibians and copepods. Thermal pollution may also increase the metabolic rate

of aquatic animals, as enzyme activity, resulting in these organisms consuming

more food in a shorter time than if their environment were not changed. An

increased metabolic rate may result in food source shortages, causing a sharp

decrease in a population. Changes in the environment may also result in a

migration of organisms to another, more suitable environment and to in-migration

of fishes that normally only live in warmer waters elsewhere. This leads to

competition for fewer resources; the more adapted organisms moving in may have

an advantage over organisms that are not used to the warmer temperature. As a

result one has the problem of compromising food chains of the old and new

environments. Biodiversity can be decreased as a result.

Construction of hydro-power stations is limited due to water resources

availability and the necessity to construct on a substantial part of fertile land. One

of the alternatives is nuclear energy which is a highly concentrated source of

energy in comparison with fossil fuel. However, there are problems of disposing

nuclear waste product which can remain hazardous for thousands of years.

1.2 Objectives of Study

The main objectives of this study are:

1. To evaluate the level of awareness of solar energy.

2. To study the potential for use of solar energy.

3. To evaluate willingness to pay for solar energy.

4

1.3 Scope of Study

This study is to understand the public’s perception and awareness of the on

solar energy. The study areas are limited to Kuala Lumpur and it covers existing

and future user of solar energy

1.4 Limitation of Study

The solar photovoltaic products, supply and price range will be surveyed.

The study’s limitations are time and cost.

1.5 Significance of Study

Asian countries have been greatly relying on dirty-burning coal to

stimulate its rapidly growing economy. The domination of coal in the energy mix

in developing countries of Asia merged with rapid urbanization has led to

environmental consequences. The most attractive way of encountering the

increase of energy demands is to use environmental friendly, renewable energy

source, primarily solar energy.

The fossil fuel era is projected to span a mere 600 years. It began around

the mid-1800’s which is the time of industrial revolution and trailing off sometime

in the mid-2400’s. However, natural gas and oil are expected to deplete earlier

(Tabb, 1984). The exhaustion of non-renewable source of energy will be a crisis

in the future.

5

An alternative such as The Fuel Diversification Strategy was introduced to

ensure long-term security in the supply of energy. However, research by Jafar et

al (2007) shows that the proposed fuel mix results in a higher pollutants

generation. CO2 would increased more than twice the current emission, SO2

would increase though in a negligible amount, and generation of NOx would

increase the most which result in six times higher generation of NOx. The

pollution implication can be avoided if Malaysia changes to other sources of

renewable energy such as solar energy for its future energy requirements.

Therefore, this study will aid in promoting the usage of renewable energy

such as solar energy which is free to consume and causes no pollution.

CHAPTER 2

LITERATURE REVIEW

2.1 Introduction

Sunlight is practically an inexhaustible energy source. It is also an

ecologically pure and accessible energy source possessing a high energy potential.

Solar energy is the energy from the sun that is converted into thermal or electrical

energy. The main types of solar energy used today are the Solar Thermal and

Photovoltaic.

Solar Thermal uses energy from the sun to generate heat. Heat generated

from the sun is stored using solar panels which are then transferred to buildings

for heating of for domestic hot water use (Figure 2.1). The second type is

Photovoltaic which is the process used to turn energy from the sun into electricity

(Figure 2.2). A solar cell, or known as photovoltaic cell (PV), is a device that

converts light into direct current using the photoelectric effect. The PV panel

charges the battery during daytime and the energy thus, stored in the battery are

used to power the lights whenever required. Electric power is obtained from solar

panels and stored in a system of charged batteries. Nowadays, there are vast

7

opportunities for PV application as for residential and public illumination (Farret

et al., 2006).

Figure 2.1: Solar Thermal Technology

Figure 2.2: Conversion of sunlight into electricity by photovoltaic cells.

8

Figure 2.3: Photovoltaic panel to generate electricity for residential use.

Figure 2.4: New housing development with photovoltaic panel installation.

Figure 2.5: Solar heater to heat water for domestic use.

9

Photovoltaic cells (solar cells) are made from a silicon material. This

material goes through a chemical process, which forms crystals and the end

product is used in Photovoltaic cells. Photovoltaic conversion uses solid-state

semiconductor crystals that are doped with positive and negative atoms to produce

an electric field across the crystals (Andreev et al., 1997). As solar cells turn light

energy from the sun into electricity, we are able to use solar powered equipment

such as calculators, some toys, radios, water fountains, battery chargers, solar

lighting, solar attic fans, solar water pumps, solar powered generators and many

other devices.

Although solar energy is one of the sources of renewable energy, is free to

consume and causes no pollution to the environment, it provides only a small

fraction of the electricity that we are currently using. Part of the reason solar

energy is not used on a larger scale is the cost of capturing this abundant energy.

Solar energy also has limitations such as cost, climate, solar technology and scale

of usage (Tabb, 1984). However, these limitations should be seen as positive,

practical boundaries to nurture design, planning and technology to make it more

efficient.

Nowadays it is becoming increasingly clear that human activity is

changing the global climate. Even though natural processes have contributed to

global climate changes to some extent it is extremely unlikely that the scope of

this changes during the last century could be solely attributed to natural factors

(Ganopolski, 2005). The problem is mainly caused by the energy resources we are

predominately using. Solar energy is expected to play a major role in the future of

electricity production.

10

2.2 Status of Electricity in Malaysia

The basic fuels for electricity generation are oil, coal, gas and hydropower.

This produces CO2, SO2 and NOx as their by-products. Table 2.1 shows the

national electricity generation technologies and their emission factors which are

CO2, SO2 and NOx. These pollutants bring about greenhouse effects, which

contribute to global warming. High concentration of these pollutants in the

environment is harmful to human health and the environment. Not only human are

affected, flora, fauna and structures are also at risk.

Table 2.1: A presentation on technologies and emission factors by type, (2000

MW)

Technology Percentage,

%

Emission (kg/kWh)

CO2 SO2 NOx

Steam

Coal 5.0 1.18 0.0139 0.0052

Gas 9.1 0.53 0.0005 0.0009

Oil 3.4 0.85 0.0164 0.0025

Hydro 15.0 0.00 0.0000 0.0000

Mini-hydro 0.3 0.00 0.0000 0.0000

Diesel 2.7 0.86 0.0165 0.0027

Rural diesel 0.0 0.83 0.0163 0.0024

Combined

cycle

38.6 0.85 0.0164 0.0026

Open-cycle

GT

Diesel 1.0 0.86 0.0165 0.0027

Gas 24.9 0.53 0.0005 0.0009

TOTAL 100.0 - - -

(Source: PTM, 2003)

11

Electricity generation in Malaysia is mostly fossil-based in particular

natural gas and oil. Malaysia has so far been able to meet the country’s demand

for energy. In the past decade, there has been significant growth in the Malaysian

energy sector.

Electricity demand increased from 60,299GWh in 2000 to 71,159GWh in

2003. Electricity consumption and GDP keep to the same trend. Figure 2.6 shows

the trend of electricity consumption in Malaysia. Malaysia is becoming a fast

industrializing country and it is expected that Malaysian demand for electricity

will continue to rise in the future.

Figure 2.6: Trends in electricity consumption in Malaysia. (Source: Jaafar et al.,

2008)

There are two electricity generation sectors in Malaysia which is

composed by thermal electricity generation and hydro electricity generation.

Hydro power plants use hydropower as energy input and are considered as a

renewable energy whereas thermal power plants use natural gas, diesel or heavy

fuel oil, coal and coke as their energy input. There is also co-generation of

electricity in Malaysia. However, electricity co-generation is very small in

12

Malaysia. Figure 2.7 shows electricity generation fuel mix in Malaysia for the

year 1990 to 2003.

Electricity is supplied by the three main utility companies; Tenaga

Nasional Berhad (TNB) in Peninsular Malaysia, Sabah Electricity Supply Berhad

(SESB) in Sabah and Sarawak Electricity Supply Corporation (SESCO) in

Sarawak. A statement made by Datuk Abdul Razak Abdul Majid, who is the

Senior vice-president (Corporate Affairs) Tenaga Nasional Berhad, says that over

64 percent of electricity generated using gas while coal contributes 28 percent

(NST, March 9, 2009).

Figure 2.7: Electricity generation fuel mix in Malaysia. (Source: Jaafar et al.,

2008)

The national plan under the renewable energy policy set a target of one

giga watt generation of energy using the renewable energy by 2015 and another

target of two giga watts by the year 2020. This is equivalent to ten percent of total

energy capacity in the country.

13

2.3 National Energy Policy

Ministry of Energy, Technology and Water of Malaysia aimed three main

objectives as the guidelines for future energy sector development. The three

principal energy objectives are to assists in guiding the future energy sector

development. The objectives are the supply, utilization and environmental

objective.

The environmental objective of the National Energy Policy is to minimize

the negative impacts of energy production, transportation, conversion, utilization

and consumption on the environment. Emissions, discharges and noise are the

environmental consequences subjected to the environmental quality standards like

air quality and emission standards. The biggest impact on the environment from

the energy sector is the emission of pollutants to the environment that contribute

to air pollution and global warming. The transportation industry however is the

biggest culprit. Malaysia's environmental quality standards are not as stringent as

in many developed countries. Therefore, a direct comparison will not be fair as

the green cover as well as the body of water surrounding the country serve as a

large sink with a huge assimilative capability.

2.4 Climate Change

The term climate change is often used interchangeably with the term

global warming. However, according to the National Academy of Sciences, the

phrase climate change is preferred compared to the term global warming because

it helps convey that there are other changes in addition to rising temperatures.

Definition of global warming by the National Academy of Sciences is an average

increase in the temperature of the atmosphere near the Earth's surface and in the

14

troposphere, which can contribute to changes in global climate patterns which can

occur from a variety of causes, both natural and human induced. In common

usage, global warming often refers to the warming that can occur as a result of

increased emissions of greenhouse gases from human activities.

Climate change refers to any significant change in measures of climate

such as temperature, precipitation, or wind that last for an extended period;

decades or longer. Climate change is caused by the following factors:

i. Natural factors

Examples of natural factors are changes in the sun's intensity or slow

changes in the Earth's orbit around the sun.

ii. Natural processes within the climate system

Changes in ocean circulation may also contribute to climate change.

iii. Human activities

Human activities cause the change of atmosphere's composition such as

production of energy through burning fossil fuels. Besides, it also causes

changes to the land surface. The examples of the activities are

deforestation and urbanization. (EPA, 2009)

Most of the global warming in recent decades is very likely the result of

human activities. Climate change causes other aspects of the climate to change

such as rainfall patterns, snow and ice cover, and the rise of sea level. Recent

Intergovernmental Panel on Climate Change conference in Copenhagen, confirms

that high rates of observed emissions, the worst-case scenario trajectories are

being realised. For parameters such as global mean surface temperature, sea-level

rise, ocean and ice sheet dynamics, ocean acidification, and extreme climatic

events, the climate system is already moving beyond the patterns of natural

variability within which our society and economy have developed and thrived.

15

There is a significant risk that many of the trends will accelerate, leading to an

increasing risk of abrupt or irreversible climatic shifts.

Figure 2.8: Melting water streams from an iceberg, Greenland.

The Arctic sea-ice has seen a rapid decline in recent summers. Rising sea

levels, triggered by global warming, pose a far greater danger to the planet than

previously estimated. Sea level could rise more than a metre by 2100, says expert

(IPCC, 2009). Small glaciers occupy only 0.5% of the total glaciated area in the

world, yet their contribution to sea level rise is 70%. Figure 2.8 shows a picture

of melting iceberg. Amplified melting of small glaciers in the Arctic has the

largest impact on changing global sea level (Hagen, 2009). Figure 2.9 shows

apparent melting of sea ice in Northern Hemisphere in the year 2008 compared to

year 1990.

16

Figure 2.9: Side-by-side images of Northern Hemisphere Sea ice extent for two

dates in the satellite record.

For the Malaysia Ninth Plan period, emphasis will also be directed to

environmental objective besides than efficient production and utilization of

energy. One of the strategies is to promote greater use of renewable energy for

power generation and by industries. Research and development programme are to

be coordinated so that cost-effective technology can be utilized.

2.5 Solar Cell Performance in Malaysia

Photovoltaic system has been applied in Malaysia since the early 1980s. In

1998, the first pilot project was commissioned by Tenaga Nasional Berhad (TNB)

to determine the suitability of photovoltaic usage in Malaysia. Until today, the

government give support to implement photovoltaic system in this country.

However, less support is gained from private sectors and users as capital cost for

the installation of photovoltaic system is high. Although the capital cost for the

system is high, for long-term it is cost effective as solar energy is free to consume.

Together with the awareness of the public on solar energy and the environment,

17

efficiency improvement on the use of energy and resources while preserving the

environment can be achieved (Amin et al.,2008).

The mono-crystalline silicon solar module’s efficiency is the highest,

followed by the multi-crystalline silicon type. Crystalline silicon solar cell is well

known for their high cell efficiency, therefore they are expected to have higher

efficiency if compared to the thin film technology. CIS solar module used in the

field study has shown higher module efficiency compared to the amorphous

silicon solar module.

From previous study by Amin et al. (2008), the weather condition in

Malaysia is very suitable for photovoltaic implementation because the weather

condition is almost predictable and the availability of sunlight is more than ten

hours daily. It is a good consideration to use photovoltaic as it is possible to have

between 800W/m2 and 1000W/m2 for six hours of direct sunlight.

2.6 Malaysia Building Integrated Photovoltaic (MBIPV)

The goal of the MBIPV project is to reduce the annual growth rate of

GHG emissions from fossil fuel-fired power generators, through the widespread

implementation of BIPV application to replace part of the current fossil fuel use,

and by cost reduction of the BIPV technology. Total GHG emissions avoided

from power sector is about 65,100 tons CO2 over the lifetime of the installed

BIPV capacity by the year 2010, relative to the baseline in the year 2005 (UNDP-

GEF, 2004)

18

Stand-alone photovoltaic (PV) produces electricity for the intended use.

Examples of usage of a stand-alone PV are for household electricity consumption,

telecommunication systems, and navigational systems. A PV system, either a

stand-alone or a grid-connected, is classified as a BIPV system whenever the PV

is aesthetically integrated into the building architecture. The stand-alone PV is a

system installation and it requires a battery to operate. Stand-alone PV is mostly

applied in rural areas (UNEP-GEF,2004).

A building integrated photovoltaic (BIPV) system function is not only to

produce electricity, but will also be an essential part of the building with a specific

function such as window shading device, and roof. As a consequence, the

substituted building materials will partially offset the BIPV technology cost. Land

space for the technology application will not be an issue as the technology is

integrated as part of the building. Figure 2.10 shows average MBIPV price.

.

Figure 2.10: Malaysia average BIPV Price/kWp. (Source: MBIPV, 2009)

19

2.7 Barriers and Challenges in Developing renewable energy in Malaysia.

There are some barriers and challenges that limits the utilization of

renewable energy in Malaysia. Some of the challenges are:

i. Electricity Sales Price

In Malaysia, an issue that makes the renewable energy (RE) developers not

interested to invest in the RE power projects is the sales price of RE

electricity. In order to determine the sales price for RE generated electricity

involves a bargain between potential investors in RE power plants, who are

looking for acceptable level of profit, also the national utility that is

concerned with the amount of subsidy it has to burden in order to support the

Government’s fuel diversification policy.

ii. Renewable Energy Power Purchase Agreement (REPPA)

The REPPA which is between the national utility and the RE project

developers plays a major effect to the RE project developers. Some may look

REPPA as interference to their project due to the difficulty in getting

financing, as REPPA does not provide a robust cash flow to convince

bankers. In addition, they are maybe other conditions that will not permit the

project to secure the funding from the Banks. Another REPPA barrier is the

long negotiation period before the sign-up of the agreement. The developers

of the RE projects are generally from small companies with limited resources.

The interest for the projects is based on the capability to fund the

development at the minimal cost.

20

iii. Subsidy for Conventional Energy System

There is still massive support to conventional energy sources, which is in the

forms of subsidies and export credits. In Malaysia, gas supplied by Petronas

is still heavily subsidized by the government. If renewable energy is to be

economically proficient, it is imperative that renewable energy receives the

same treatment as fossil fuels such as gas and coal. Otherwise, such subsidies

for fossil fuel have to be removed or made transparent in order to create a

same level for RE and conventional energy system. Every type of energy has

benefited from assistance in its initial phase, and as for renewable energy

there should not be any exception.

2.8 Contingent Valuation Method

Contingent valuation is interactive where the researcher and respondent

interact to produce an outcome that is beneficial to both researcher and respondent.

The researcher’s main objective is to obtain responses from the respondent that

reflects the respondents’ true opinion on the issue raised in the questionnaire. The

fact that people responds to questionnaire even though there is a real cost involved

implies that individual for whatever reason, want to get involved. It is very difficult

to explain why people participate in contingent valuation questionnaires because the

individual cannot expect to affect the outcome. Still, people are involved in

contingent valuation questionnaires (Raymond J. et. al., 1997).

21

2.9 Willingness To Pay

WTP often associated with attitude and behavior of an individual as well as

their background. Willingness to pay is to measure the quantity that an individual

would be willing to pay in order to protect specific environmental services. Usually

this helps to measure the benefits for a particular group, organization and individual

who are involved directly or indirectly in protecting the resources (Goh, 2009).

However, WTP has a number of inherent problems. These problems are stated

below:

1. Interview studies may lead people to quote a higher amount than they

would pay in actual case.

2. The resulting WTPs depend on disposable income.

3. The resulting WTP depends on the level of knowledge by the

mechanism by which the impacts in the question work.

(Sorenson, 2004)

CHAPTER 3

METHODOLOGY

3.1 Introduction

This section contains the methodological issues used in this research. It

focuses primarily on providing information with the tools and techniques used in

the research process. A methodology of research defines the activity of research,

processes of research, measuring the progress of the research, and the outcome of

the research. Selection of the proper methodology for the research is essential in

order to ensure the all the data and information needed are able to be obtained.

Besides that, the methodology refines on the method of analyzing the data for the

research using the correct method. The overall processes to get the result are

summarized in the Figure 3.1.

23

Figure 3.1: The overall processes involved in the project.

Gathering information

Identification of

Problem

Questionnaire

Development

Result and

Conclusion

Analysis of Data

(SPSS)

Public

PHASE 1

Gathering

Information

PHASE 3

Analysis and

Result

PHASE 2

Questionnaire

Development

and Survey,

and Development

of Case Study

Literature

Review Secondary

Data

Low

Income

High

Income

Middle

Income

Case

Study

24

The initial phase of the project was on gathering information related to the

study. Interpretation of the information in the literature review is important.

The second phase consists of questionnaire development and conducting

survey. The questionnaire consists of two types of question which are open ended

question and close ended question. The questionnaire was distributed to the public

to determine the level of awareness on the solar energy. A hundred and twenty

survey samples were used in study area using personal interviews which covers

low to high income through random selection. Questions asked include the

background of the respondent, awareness and opinion on solar energy, and WTP

for solar energy products. As for the case study, thirteen users of solar technology

were involved.

The third phase would be the stage of analysis and result. All the data was

analyzed using Statistical Package for the Social Sciences (SPSS). SPSS is a

computer program used for statistical analysis.

3.1.1 Objectives

Objectives of the study can be drawn after a thorough review of the

preliminary data collected. The main objective of this study is to evaluate the

level of usage and awareness of solar energy in Malaysia. As solar energy is

expected to play a major role in electricity production in the future, the evaluation

of public awareness is important to foretell the future trend of our electricity

production. The research is also aimed to study potential for use of solar energy.

Result from survey together with the secondary data obtained from the journals

and previous studies are to be discussed in order to strengthen the result of the

research. Lastly, the study is also to evaluate willingness to pay (WTP) for solar

energy. The range of optimum price that the public are willing to spend for the

technology can be obtained from this study.

25

3.1.2 Scope

This study is to understand the opinion and awareness of the public on

solar energy and solar technology as a source of energy. However, the study areas

are limited to Kuala Lumpur. The study involves existing user and future user.

3.1.3 Limitation

The survey of solar thermal and solar photovoltaic products, supply and

price range will be conducted. However, time and cost are also the limitation of

this study. The survey was carried out in a week in study area.

3.2 Data Requirement

This study took into consideration from various sources, including site

surveying, questionnaire, and case study. To fulfil study objectives, data and

information used in this study was classified into two groups, namely as primary

and secondary data. All the data are needed for the study.

3.2.1 Primary Data

Primary data were obtained from questionnaire survey and case study. A

site visit to houses that are using photovoltaic and solar water heater was

conducted in order to assess the real condition at site for the case study. Data and

26

information which was categorized as primary data in this study is the data

obtained from the questionnaire.

3.2.2 Secondary Data

Secondary data is also needed for this study. Secondary data is an

unobtrusive data collection method in which available data that predate the

formulation of an evaluation are used to answer the evaluation question (Unrau et.

al., 2007). It refers to information gathered by someone other than the researcher

conducting the current study. However, secondary data does not permit the

progression from formulating a research question to designing methods to answer

that question. Such data can be internal or external to the organization and

accessed through the internet or perusal of recorded or published information.

Secondary data for this study is mainly prices of photovoltaic panels and solar

water heater from the suppliers.

3.3 Research Design

There are three main phases in the research design for this study as shown

in Figure 3.1. The phases are Preliminary Data Collection, Data Collection and

Result Analysis.

27

3.3.1 Preliminary Data Collection

The initial phase of the project is on gathering information related to the

study. Interpretation of the information in the literature review is important. The

sources of literature review and secondary data are books, magazines, journals,

newspaper articles, patent, conference articles, legislation, standards, brochures,

and thesis. The information from literature review and secondary data also helps

in assisting the development of questionnaires and case study.

3.3.2 Data Collection

The second phase consists of questionnaire development and conducting

survey. The questionnaire consists of two types of question which are open ended

question and close ended question. The questionnaire will be divided into three

different groups of respondents. The groups are respondents with high level of

income, medium income and low income. The survey involves the public to

determine the level of awareness on the solar energy and also WTP. Survey

samples should represent at least ten percent of the overall population. Questions

that will be asked include the background of the respondent, awareness and

opinion on solar energy, and WTP for solar energy products.

The second phase also involves the development of case study. The case

study will be on the problems and limitation of solar energy products. The case

study will be carried out based on the problems occurred to existing buildings or

residential areas that utilizes solar energy. The case study is for two main types of

solar energy that are used today which are solar thermal and photovoltaic or also

known as solar cell.

28

3.3.3 Result Analysis

The third phase would be the stage of analysis and result. All the data will

be analyzed using Statistical Package for the Social Sciences (SPSS). SPSS is a

computer program used for statistical analysis. The results will be produced and

the conclusion will be drawn for the study together with a recommendation for

future study.

As for the case study, the limitation and problems of implementation of

solar energy products based on the two types of solar technology, solar thermal

and solar photovoltaic will be discussed. Recommendation will be drawn from the

discussion in order to improve the potential for use of solar energy in Malaysia.

3.4 Questionnaire Study

The most important part in this study is questionnaire. The main purpose is

to identify the level of awareness on solar energy in study area which is in Kuala

Lumpur from various levels of income including high income, middle income and

low income level. It also surveys the interest of the respondents in order to see

whether there is a potential for solar technology. From this survey, the

understanding or prediction of potential level and the willingness to pay can be

made.

There are several parts in the questionnaire. The questionnaire consists of

3 main sections. Details of the sections and their topic are shown in table 3.1. Full

version of questionnaire used for this study can be referring in Appendix X.

29

Table 3.1: Sections in the questionnaire

Section Topic

A Demographics/ Background of Respondents

B Awareness and Knowledge on Solar Energy

C Willingness-to-pay

Part A of the questionnaire is on the background of the respondents. The

data obtained from this section are gender, age, racial background, level of

education, marital status, religious background, occupation, income and monthly

electrical bill.

Section B is more towards general understanding on environment issue

and awareness on solar technology. Respondents are needed to give feedback

based on their knowledge on the issue. It is based on general attitude towards

environment. The question in this part is very simple, quick and easy to answer.

The questions are in form of open ended question and closed ended question.

Moving to part C, it focuses more on willingness to pay aspect. This section is

important to evaluate the value of WTP in study area.

For the questionnaire distribution, a size of 120 respondents is targeted.

Personal interviews or in-person interviews method is the most effective way of

doing a survey as the availability of the information on the questions needed by

the respondents are high through interactive communication with the interviewer.

The survey covers low to high income through random selection of respondents.

30

3.5 Case Study

The objective of the case study is to evaluate problems associated with

solar technology. In this case study, the emphasis is on two types of solar

technology which are solar water heater and solar photovoltaic panels to generate

electricity. The respondents involved in this case study is those who are currently

using any of the two solar technologies mentioned earlier. The size of respondents

for case study however is smaller than the size of respondents for the

questionnaire distribution. This is due to difficulties of finding or locating the

residential areas or homes that utilizes solar energy.

Figure 3.2: Houses that utilizes part of their electricity from solar energy.

31

3.6 Data Interpretation

For some questions, Likert scale is used to indicate respondents’ level of

awareness and level of knowledge. Five level of scale are used in this

questionnaire. A Likert scale is a psychometric scale commonly used in

questionnaires, and is the most widely used scale in survey research. When

responding to a Likert questionnaire item, respondents specify their level of

agreement to a statement. The scale is named after its inventor, psychologist

Rensis Likert.

The following table presents the format of a typical five-level Likert item.

These scales are ranging from one to five, which represent the lowest and highest

strength respectively:

Table 3.2: Five-level Likert Scale

Scale Level

1 Strongly disagree

2 Disagree

3 Neutral

4 Agree

5 Strongly agree

32

3.7 Expected Findings

Although the use of solar energy is not new in this country, the level of

usage is still in low compared to other countries. From this study, the expected

findings to be obtained are:

1. The level of awareness among the public in the study area is moderate.

2. There is a potential for use of solar energy in the study area.

3. There is a significant difference for willingness-to-pay value between

respondents with high income and respondents with lower income.

CHAPTER 4

RESULT AND ANALYSIS

4.1 Introduction

In this chapter, all the data obtained is being analyzed and processed. All

the data is analyzed using SPSS and there are also data that is being analyzed

manually. The findings is discussed and presented in this chapter. The data

analysis is divided into two separate sections. The first section focused on

descriptive statistical analysis whereas the second part is on inferential analysis.

At the final part of this chapter, the findings and conclusion is presented.

4.2 Descriptive Statistical Analysis

There are three sections in the questionnaire. The first section is on

demographics or background of the respondents. The data obtained from this section

are gender, age, racial background, level of education, marital status, religious

background, occupation, income and monthly electrical bill.

34

4.2.1 Background of respondents

Figure 4.1 presents the percentage of respondents based on gender that

contributes to the survey. The result shows that the number of female respondents is

higher by two percent in the study area. Figure 4.2 describes the distribution of

respondents by age. The highest percentage is between the ages of 26 to 35 years old,

followed by 36 to 55 years old, 21 to 25 years old, above 55 years old and lastly 17

to 20 years old.

Figure 4.1: Percentage of respondents based on gender

Figure 4.2: Age of respondents

48

49

50

51

Gender

Male, 49

Female, 51

Per

cen

tage

, %

1%

17%

43%

35%

4%

17-20 21-25 26-35 36-55 Above 55

35

Figure 4.3: Racial background of respondents

Racial background in Figure 4.3 shows that the majority of the respondents

are Malays (71.67%), followed by Chinese (14.17%), Indian (7.5%) and others

(6.67%) respectively as Malays are the majority in Malaysia. According to Figure

4.4, most of the respondents graduated from high school. Forty-four respondents

graduated with a university degree (36.67%), twenty-two respondents with a diploma

(18.33), and forty-six respondents who is working after high school (38.33%).

Figure 4.4: Education background of respondents

Malay, 71.67

Chinese, 14.1

Indian, 7.50

Others, 6.67

- 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00

Percentage,%

1.67 5.00

38.33

18.33

36.67

Primary School High School (PMR)

High School (SPM-STP)

University Diploma

University Degree

Percentage of respondents

36

Figure 4.5: Marital status of respondents

Figure 4.6: Religious background of respondents

Figure 4.7: Occupation of respondents

35%

65%

Single

Married

Muslim

Christian

Budhism

Hinduism

76.67

10.83

5.83

6.67

Percentage of respondents, %

53.3

25.0

15.8

0.85

Public Sector Private Sector Self-employed Unemployed Others

Percentage of respondents, %

37

From the marital status of respondents as shown in Figure 4.5, the majority of

the respondents are married with a percentage of 65%, whereas 35% of the

respondents are single. Figure 4.6 shows the religious background of respondents

with a majority of Muslims (76.67%), followed by Christians (10.83%), Hinduism

(6.67%) and Buddhism (5.83%). The result shows a high number of Muslims as the

majority of the respondents are Malays. For the occupation of the respondents,

53.3% of the respondents are working in a public sector or government, 25%

respondents are working in a private sector, 15.8% are self-employed, 0.8% is

unemployed and 5% others. Self-employed respondents mainly run their own

business and the 5% which is others are either retired or housewives.

Figure 4.8: Personal income of respondents

In Figure 4.8, the majority of the respondents are with personal income

between RM1,001 to RM2,000 with a percentage of 31%. However, respondents

with an income between RM2,001 to RM3,000 is slightly behind with a percentage

of 29%. These are followed respectively by 17% of income between RM3,001 to

RM4,000, 10% of income more than RM5,000, 7% of income between RM4,001 to

RM5,000 and lastly 6% of personal income less than RM1,000.

6%

31%

29%

17%

7% 10%<1000

1001-2000

2001-3000

3001-4000

4001-5000

>5000

38

Figure 4.9: Family income of respondents

Data obtained for the family income of respondents as shown in Figure 4.9,

shows that family income between RM3,001 to RM6,000 is the highest with 39.2%,

RM1,001 to RM3,000 with a percentage of 30%, RM8,000 to RM10,000 with

10.8%, RM6,001 to RM8,000 with 9.2%, more than RM10,000 with a percentage of

7.5% and lastly a family income less than RM1,000 with 3.3%. The 3.3% represent

single respondents.

Figure 4.10: Monthly electrical bill of respondents

0.0 10.0 20.0 30.0 40.0

<1,000

1,001-3,000

3,001-6,000

6,001-8,000

8,000-10,000

>10,000

Percentage of respondents, %

Fam

ily In

com

e, R

M

33%

35%

31%

1%

<RM100

RM101-RM200

RM201-RM500

RM501-RM1,000

39

Figure 4.9 presents the monthly electrical bill of respondents. 35% of the

respondents spent between RM101 to RM200 for their electrical bill every month. A

percentage of 33% of respondents spent less than RM100 every month, 31% Spent

RM201 to RM300 for their electrical bill and only 1% of respondents pay more than

RM500 for their electrical bill every month.

The following, Table 4.1 presents the summary of background of the

respondents.

Table 4.1: Background of the respondents

Gender Male

49%

Female

51%

- - - -

Age 17-20

0.8%

21-25

17.5%

26-35

42.5%

36-55

35%

Above

55

4.2%

-

Race Malay

71.67%

Chinese

14.17%

Indian

7.5%

Others

6.67%

- -

Education P.School

1.67%

PMR

5.0%

SPM/STP

38.33%

Diploma

18.33%

Degree

36.67%

-

Status Single

35%

Married

65%

- - - -

Religion Muslim

76.67%

Christian

10.83%

Buddhism

5.83%

Hinduism

6.67%

- -

Occupation Public

53.3%

Private

25%

Self-

employ.

15.8%

Unemploy.

0.8%

Others

5%

-

Income

(RM)

<1000

6.67%

1001-

2000

30.83%

2001-3000

29.17%

3001-4000

16.67%

4001-

5000

6.67%

>5000

10%

F.Income

(RM)

<1000

3.3%

1001-

3000

30%

3001-6000

39.2%

6001-8000

9.2%

8000-

10K

10.8%

>10K

7.5%

Bill (RM) <100

33.3%

101-200

35%

201-500

30.8

501-1000

0.8%

- -

40

4.2.2 Awareness and Knowledge of Solar Technology

This section of the questionnaire is to evaluate the knowledge and awareness

of the public at the study area on the solar technology. Issues are based on their

knowledge and awareness on renewable energy or clean energy focusing on solar

energy and environmental. Their opinion on solar technology is essential to improve

the potential of usage in this country.

Figure 4.11: Interest in a photovoltaic (solar electric) system.

The percentage of respondents interested in photovoltaic system is high

which is 83%, as shown in the pie chart in Figure 4.11. As solar technology is new in

this country, most of the public is eager to know about the new technology. This

indicates that the awareness on solar energy in this country is high. However, 17% of

the respondent responded negatively towards the technology.

17%

83%

No Yes

41

Figure 4.12: Energy generated from oil, nuclear power and coal causes

environmental pollution.

In Figure 4.12, a number of 97 respondents which represent 80.8% of the

total respondents know that energy generated from oil, nuclear power and coal

causes environmental pollution. However, another 19.2% of the respondents

responded ‘No’ to the question which indicates they do not know that it may cause

degradation to the environment. Informing the public on the environmental effect of

generating energy from non-renewable energy such as coal and oil is important to

increase their awareness on the environment. Their interest on clean or renewable

energy including solar technology may increase as they know that fossil based

energy generation causes negative implication on the environment.

No Yes

19.2

80.8

Percentage of respondents, %

42

Figure 4.13: Information on environmental pollution can be informed effectively.

Table 4.2: Analysis for information on environmental pollution can be informed

effectively.

Medium for information on environmental pollution Average

Points

Answer >3

Common knowledge 3.28 81

Media (television, radio, internet etc.) 3.78 112

Formal education material 3.47 94

Three options are given to measure the effectiveness of each option in

informing the public on environmental pollution which are common knowledge,

media, and formal education material. From Figure 4.13, it shows that 62.5% of the

respondents strongly agree that media can reach the public effectively. This is

followed by formal education material (40%) and common knowledge (31.7%). The

result shows that awareness on the environmental pollution can be effectively spread

by media such as television, radio, internet and newspaper.

0.8

0

20.8

38.3

40.0

0.8

0.8

5.0

30.8

62.5

0.8

4.2

27.5

35.8

31.7

Disagree Strongly

Tend to disagree

Neutral

Tend to Agree

Agree Strongly

Common knowledge Media (TV, radio, newspaper, internet) Formal education material

43

Figure 4.14: Sustainable energy / clean energy / renewable energy sources (RES),

do not pollute the environment or harm people (do not release CO2

emissions)

A percentage of 48.3% of respondents strongly agree that renewable energy

sources (RES), do not pollute the environment or harm people as presented in Figure

4.14. 41.7% of respondents tend to agree on this statement. However, another 10% of

respondents are neutral on the subject. It shows that they are not aware that

renewable energy is also known as clean energy because it does not cause pollution

to the environment.

Disagree Strongly

Tend to disagree

NeutralTend to Agree

Agree Strongly

0.0 0.010.0

41.748.3

Percentage of respondents, %

44

Figure 4.15: A solar device does not stop working in cloudy weather or in winter

when the solar radiation is mainly indirect / reduced (it also works

with diffused light)

Figure 4.15 show that 14.2% of respondents strongly agree that solar device

does not stop working when the solar radiation is reduced. Another 47.5% tend to

agree with the statement and 23.3% neutral which explains they do not know

whether it works with diffused light or not. 5.8% tend to disagree and 9.2% strongly

disagree. A solar device does not stop working when the solar radiation is reduced.

However, the efficiency of the device is lower than the efficiency with average

daylight.

Figure 4.16: Awareness on MBIPV (Malaysian Building Integrated Photovoltaic)

0.0

20.0

40.0

60.0

Disagree Strongly

Tend to disagree

NeutralTend to Agree Agree

Strongly

9.25.8

23.3

47.5

14.2

Percentage of respondents, %

No, 87.5%

Yes, 12.5%

45

MBIPV (Malaysian Building Integrated Photovoltaic) is a new programme in

Malaysia whereas home owners or developers who are interested in installing

photovoltaic system will be given rebates and incentives. A very high percentage of

respondents are not aware of this programme referring to Figure 4.16. 87.5% of

respondents responded ‘No’. However, 12.5% of the respondents have heard about

this programme. In order for the public to know about this programme, mass media

play a big role to inform the public on the advantages of the programme. This will

increase the number of people involved. Thus, more public will use solar energy and

the awareness level in this country will also be increasing.

Figure 4.17: Renewable energy installation in respondents’ city / town / village

According to Figure 4.17, 79% of respondents claimed that there is no

renewable energy installation in their area. However, 21% of the respondents

claimed to have renewable energy installation. These technologies includes solar

water heater at residential areas, photovoltaic panels to generate electricity, and

telephones along the highway that utilized solar energy. Although 21% is a small

number, still it shows that the public is aware of solar energy in their areas.

79%

21%

No Yes

46

Figure 4.18: Support needed to improve knowledge about renewable energy

technologies (RETs).

Table 4.3: Analysis for support needed to improve knowledge about renewable

energy technologies (RETs).

Support needed Average

Points

Answer >3

Linking up with local wnvironmental/NGOs 3.41 93

Seminars/Lectures 3.35 87

Places to visit 3.52 100

Practical Project Ideas 3.32 85

Test-books, Books, Magazines 3.48 93

The public needs support to improve their knowledge on renewable energy

technologies. There a five options given to the respondents as shown in Figure 4.18.

The highest respond is to have a place to visit to learn more on renewable energy

technologies with a percentage of 43.3%. Having a place to visit not only can

0.8

0.8

20.8

35.0

42.5

0.0

2.5

26.7

40.8

30.0

0.8

1.7

14.2

40.0

43.3

0.8

4.2

22.5

36.7

35.8

0.0

1.7

22.5

40.8

35.0

Disagree Strongly

Tend to disagree

Neutral

Tend to Agree

Agree Strongly

Linking up with local environmental/NGOsSeminars/LecturesPlaces to VisitPractical Project IdeasText-books, Book, Magazines

47

educate the public, it also makes learning enjoyable. From the analysis, it shows that

this option have the highest point as the average point is 3.52.

Reading materials also get a high respond after place to visit with 42.5% and

an average point of 3.48. However, according to the bar chart, 4.2% of respondents

tend to disagree with attending seminar or lectures to update their knowledge.

Usually for seminars and lectures, public have to pay to take part. This may be one of

the reasons why the public are not in favour with this option. The lowest point is

contributed by practical project ideas. Public are not interested to be involved in this

idea as it seem to be difficult for public that do not have much knowledge on solar

technology.

Figure 4.19: Homebuilders should offer solar power as an option for all new homes

From Figure 4.19, 47.5% of respondents strongly agree on the idea for

homebuilders to offer solar power as an option for all new homes. 30.8% tend to

agree with the idea and Neutral for 14.2% of respondents. However, 7.5% of the

respondents tend to disagree with the idea. This presents a total of 78.3% of

respondents with a positive attitude towards the idea of offering solar power as an

option for new homes. Compared to Roper Survey that was carried out in America in

Disagree Strongly

Tend to disagree

Neutral Tend to Agree

Agree Strongly

0.0

7.5

14.2

30.8

47.5

Percentage of respondents, %

48

2007, the respond to this idea is less in our country. 87% of Americans agree with

this option. Therefore, it shows that a developed country is more advance in green

technology.

Figure 4.20: Solar power can be used to turn the lights on and heat water

Figure 4.20 shows the opinion of the respondents on the statement that solar

power can be used to turn the lights on and heat water. A majority of the respondents

strongly agree with the statement followed by 38.3% of the respondents with tend to

agree. 11.7% of respondents are neutral and 6.7% tend to disagree. The 6.7% of

respondents do not know that solar power can be used to turn the lights one and heat

water. This shows that Malaysian is aware of the usage of the technology. This also

indicates that the level of knowledge and awareness is high.

Figure 4.21 shows the distribution of public opinion on the ability of solar

energy to power electric devices such as computers or appliances. The number of

respondents that tend to disagree is higher in comparison with the statement in Figure

4.20 as it focused more on electricity generation to power electrical devices with a

percentage of 8.3%.

Disagree Strongly

Tend to disagree

NeutralTend to Agree Agree

Strongly

0.0 6.7 11.7

38.3 43.3

Percentage of respondents, %

49

Although there are still a number of respondents that do not know or do not

agree with the statement, the percentage of respondents that tend to agree (40.8%)

and strongly agree (29.2%) is considered high.

Figure 4.21: Solar can power electric devices such as computers or appliances

Figure 4.22: Primary motivation for installing solar power

0.0

8.3

21.7

40.8

29.2

Disagree Strongly

Tend to disagree

Neutral

Tend to Agree

Agree Strongly

Percentage of respondents, %

0.0 20.0 40.0 60.0 80.0

Tend to disagree

Neutral

Tend to Agree

Agree StronglyTo save the environment

It is a secure source of energy

To reduce oil dependency

To reduce overall energy usage

Decrease in monthly energy bills

50

Table 4.4: Primary motivation for installing solar power in percentage

Primary motivation

Agree

Strongly

Tend to

agree

Neutral Tend to

Disagree

Disagree

Strongly

A decrease in monthly energy

bills

71.7 21.7 5.8 0.8 0

To reduce overall energy

usage

62.5 30 6.7 0.8 0

Reduce oil dependence 49.2 32.5 16.7 1.7 0

It is a secure source of energy 45 35.8 18.3 0.8 0

To save the environment 60.8 30.8 8.3 0 0

Table 4.5: Average point

Primary motivation Average Points Answer >3

A decrease in monthly energy bills 4.64 112

To reduce overall energy usage 4.54 92.5

Reduce oil dependence 4.30 98

It is a secure source of energy 4.25 97

To save the environment 4.52 110

Primary motivation for installing solar power is important to evaluate the

public’s perception on installing solar technology. A high percentage is shown to

decrease monthly energy bills (71.7%), followed by the reduction of overall energy

usage (62.5%), to save the environment (60.8%), to reduce oil dependency (49.2%)

and as a secure source of energy (45%). 35.8% tend to agree that solar energy is a

secure type of energy. However, 1.7% of total respondents claimed that they tend to

disagree in the reduction of oil dependency. The results are summarized in the table

below.

From the analysis of average point for the primary motivation of installing

solar energy in Table 4.5, the highest motivation is a decrease in monthly energy bill.

This is followed by reduction in overall energy usage and to save the environment.

This shows that respondents think that environmental pollution is less important

compared to monetary saving.

51

The respondents are also asked to give recommendation or suggestion on the

solar technology. These are some of the respond:

1. Reduce the cost. (Anonymous)

2. Government should encourage Malaysians to use solar technologies. (Salleh

Mohd Said)

3. To have government support. (Lee Choon Siang)

4. The price must be affordable/ low. (Frankie Liew)

5. It should be introduced more aggressively into the market especially to the

developers and housing industry. (Anonymous)

Figure 4.23: This survey improves respondent knowledge on solar energy

This information below is given to the respondents in order to improve their

knowledge on solar technology.

a. We can save money on electricity and fuels, which can be used for

other purposes (depending on the system)

b. Renewable energy technologies (RETs) are environmentally friendly,

meaning that harmful emissions resulting from the use of energy is

minimised.

2% 0%

10%

59%

29%

Disagree Strongly Tend to disagree Neutral

Tend to Agree Agree Strongly

52

c. RETs are widely available and an established technology.

d. Enthusiasm and motivation shared with others will help to solve the

energy problems facing us today.

e. 1MWh of PV electricity is equivalent to 0.62 tons of CO2 avoided.

f. We can save up to 38% from our monthly bill. (Based on 1500kWh of

monthly usage)

The respondents were asked whether the survey improves their knowledge on

solar energy. Figure 4.23 are the respond to the question. 59% of the respondents

tend to agree that this survey improves their knowledge, 29% strongly agree with the

question, 10% responded to neutral and another 2% strongly disagree. Below are

some of the comments by the respondents:

1. Good information and capacity of saving money (Sarojini A/P Kandiah)

2. It’s a great survey. Most people don’t know anything about the solar

industry. (Siti Rosmawati Bt Abd Rafor)

3. Survey is too technical to understand. (Nurrul Saliha Saleh)

4. This is a new technology in the market; i have a little knowledge about solar

technology. (Anonymous)

5. This survey provides knowledge about solar power. (Nurshafidah Roslim)

6. In fact, this survey make me realise the important of solar technology and

this technology is ought to be given more exposure to the public. The

government should subsidize the cost of installation for interested

household. (Salleh Mohd Said)

7. Informative. (Kam soon Wah)

8. The survey is good for the solar technology in this country. (Rosli)

9. This survey makes me think of an alternative to electricity. (Frankie Liew)

10. Good information. (Poh Chang Kee)

11. Good to find the level of awareness among Malaysian on solar energy. (Siti

Maznah)

12. This survey acts as an eye-opener on the use of solar power. The result

should be presented to proper authority to improve the percentage of user.

(Anonymous)

13. Very positive move to improve our environment. (Jamil Yassin)

53

4.2.3 Willingness To Pay (WTP)/Invest/Finance

In this particular section, respondents’ willingness to pay is determined.

There are also questions that mainly aimed to verify the public’s requirement in order

to involve in the new technology. Points of improvement can be made from the result

of the survey in order to enhance the usage of solar power technology.

Figure 4.24: Most important consideration when purchasing an energy installation

Table 4.6: Analysis for most important consideration when purchasing an energy

installation

Primary motivation Average

Points

Answer >3

Quality 4.57 102

Price 4.63 100

Look 4.14 85

Environment 4.37 92

54

Respondents were asked to rank according to their most important

consideration when purchasing an energy installation. There are four criteria which

are quality, price, look and environment. According to the result in Figure 4.23, the

highest consideration is price with the percentage or agrees strongly of 69.2%,

followed by quality with 61.7%. Therefore, if the price of solar technologies is high,

the public will not consider to purchase or install the technology. Low price of solar

technology affects the public interest in purchasing the energy. Quality is also

important as the consumer wants the device to work effectively. 1.9% of respondents

tend to disagree on look as the important criteria when purchasing an energy

installation. Some respondents are more focusing on price, quality and environment

instead of look or aesthetical value of the product.

Figure 4.25 present the respond to the preferences of assistance in obtaining

financing. A majority of respondents with 79% claimed to prefer assistance in

obtaining financing to install a solar device. Another 21% does not prefer assistance

for financing. A large number of respondents will go to financing as they know that

solar technologies are expensive.

Figure 4.25: Preferences in assistance to obtain financing

55

Figure 4.26: Respondents expectation of the price of solar energy installation

Result from Figure 4.26 shows that 58.9% of respondents expect the price of

solar installation (all inclusive) is less than RM5,000. 20.6% of respondents respond

to a price between RM5,000-RM10,000, 7.5% responded to RM10,000-RM20,000,

8.4% responded to RM20,000-RM50,000, and 4.7% responded to more than

RM50,000. Most respondents are not aware that the price of solar energy technology

is costly. That is why their expectation on the price is lower than RM5,000. The price

of solar photovoltaic is much higher than that as it is in the range of RM22,000 to

RM30,000 per kilowatt peak (kWp). 1 kWp of solar energy can produce about 91.67

kWh of electricity (MBIPV).

0.0 20.0 40.0 60.0

<RM5,000

RM5,000-RM10,000

RM10,000-RM20,000

RM20,000-RM50,000

>RM50,000

Percentage of respondents, %

56

Figure 4.27: Willingness to pay

Highest percentage of willingness to pay is 26.2% which is RM5,000

showing majority of the respondents are willing to pay RM5,000 to install solar

energy. 25.2% of respondents are willing to pay RM3,000, 15.9% of the respondents

are willing to pay RM2,000. For RM1,000, a percentage of 15.9% are willing to pay

or invest on this technology. 8.4% of respondents are willing to pay RM10,000 for

solar energy installation. 5.6% of respondents are willing to pay RM4,000. However,

there is a small percentage of respondents who are willing to pay RM125,000 with a

percentage of 1.9%. Lastly, 0.9% of respondents are willing to pay for an installation

worth of RM7,000.

0.0

5.0

10.0

15.0

20.0

25.0

30.0

Percentage of respondents, %

57

Figure 4.28: Respondents expected period of return for investment

In most of the investment we make, we expect the fastest period of return for

our investment. It is proven by the pie chart in Figure 4.28 where 70% of the

respondent expected 5 to 10 year of period of return for their investment on solar

technology. 20% of the respondent respond to 10 to 15 years period of return for the

investment, 6% is expecting 15 to 25 years period of return and another 4%

expecting the period of return of more than 35 years. The higher the price to

purchase and install the technology, the longer the period of return to the consumers.

Figure 4.22: Reconsider to involve in solar energy

70%

20%

6% 0% 4%

5-10 years 10-15 years 15-25 years

25-35 years more than 35 years

No19%

Yes81%

58

The solar market represents a high growth opportunity nationally and

internationally, both currently and into the foreseeable future. The global demand for

electrical energy has experienced significant growth due to growth in populations

and the economic vitality of emerging economies. The BIPV technology cost

reduction in Malaysia of 20% during the period 2005-2010, and a further 30% during

the period 2010-2020 are moderate estimates.

After giving the information above to the respondents, they were asked

whether they would reconsider if they were not planning to involve in solar energy.

The result is presented in Figure 4.29. After knowing that the price will be lower in

the future, 81% of the respondents agree to reconsider the option. However, another

19% responded not to reconsider using solar technology. The country's electricity

tariff, which is among the lowest in the world, is one of the reasons why some of the

respondents think that solar power is not important.

Figure 4.30: Points of improvement to reconsider

Lower initial purchase price

Higher rate of return

Higher subsidies for solar energy

Others

65.4

16.8

16.8

0.9

Percentage of respondents, %

59

The respondents were asked to choose the most important point of

improvement in order to make them reconsider to use solar energy. From Figure

4.30, it is proven that the respondents agree to consider if the initial purchase price is

lower (65.4%). Bothe higher rate of return and higher subsidies scored 16.8%

whereas 0.9% of the respondents chose others. Mr. Lee Choon Siang responded to

others and he suggested that solar power should be more efficient and maintenance

cost should be lower.

4.3 Case Study

This case study was focusing to find the problems associated with solar

technology. The result from this case study can be used to improve and expand the

usage of the technology in our country. The respondents aimed are the ones that have

already installed and used the technology. For this case study, there are thirteen

respondents. The case study concentrates on the usage of solar water heater and

photovoltaic (solar panels) to generate electricity.

Figure 4.31 below shows the percentage of respondents according to the type

of the technology they are using. 61.5% of the respondents are using solar water

heater (8 respondents). Another 38.5% (5 respondents) are using photovoltaic panels

to generate electricity. Users that are using photovoltaic are not easy to find as

photovoltaic panel usage is new in our country comparing to the usage of solar water

heater. However, there are houses in Precinct 16, Putrajaya that uses this technology

to generate electricity.

60

Figure 4.31: Type of solar technology installed

The installation of solar water heater by the user dated as early as in the

1990’s up to the year 2009. Whereas for photovoltaic system, the users installed it

between the year of 2007 to 2008.

Figure 4.32: Exposure on the technology

The pie chart in Figure 4.32 shows how the user knows about the technology.

69% of the user claimed media such as television, radio, newspaper or the internet

exposed them to the technology.

Solar water heater

Photovoltaic to generate electricity

61.5

38.5

Percentage of respondents, %

8%

69%

23%

Formal education material

Media (TV, radio, newspaper, internet)

Others

61

23% of the user responded to others where they know it from agents

promoting their products and also recommendation from the architect. A percentage

of 8% claimed to get the knowledge from formal education material.

Figure 4.33: Number of users on their estimation of return period for the

investment

Figure 4.33 shows the users estimation of the return period for the investment

of solar technology. For solar water heating technology, 1 respondent estimated the

return period for the investment between 5 to 10 years. Four users estimated the

return period of 10 to 15 years. Another 2 users estimated return period between 15

to 25 years. For photovoltaic panel user, 1 user estimated the return period for the

investment between 5 to 10 years, three users estimated the return period of 10 to 15

years and 1 user estimated the return period for the investment on solar photovoltaic

to be between 15 to 25 years.

1

4

2

1

3

1

5-10 years 10-15 years 15-25 years

Solar water heater Photovoltaic

62

Figure 4.33: Problems associated with solar energy.

The main problems associated with solar energy are stated in Figure 4.33. As

shown in the result, two users strongly agree that lack of expertise is a problem in

solar industry in Malaysia. Eleven users tend to agree with the statement; cloudy

areas may not get enough sun exposure, seven users tend to agree with lack of

expertise and maintenance of equipment, and 4 tend to agree with proper disposal of

the panel. Nine users claimed neutral on proper disposal of the panels, three users on

maintenance of equipment, and both two users for cloudy areas may not get enough

sun exposure and lack of expertise.

However, three users responded tend to disagree with the statement that

maintenance of equipment is one of the problems of solar technology and two users

tend to disagree with lack of expertise in solar industry in our country. The highest

problem is associated with cloudy areas may not get enough sun exposure as shown

in Table 4.7.

0

2

11

0

2 2

7

23 3

7

00

9

4

00

2

4

6

8

10

12

Tend to disagree Neutral Tend to Agree Agree Strongly

Cloudy areas may not get enough sun exposure

Lack of expertise

Maintenance of equipment

Proper disposal of the panels

63

Table 4.7: Problems associated with solar energy.

Problems associated with solar energy Average

Points

Answer >3

Cloudy areas may not get enough sun exposure 3.85 11

Lack of expertise 3.70 9

Maintenance of equipment 3.31 7

Proper disposal of the panel 3.31 4

4.4 Reliability Test

Reliability test were carried out for both data obtained from the survey (future

user) and also the case study (existing user). Alpha (Cronbach) model is used for the

reliability test. This model is a model of internal consistency, based on the average

inter-item correlation.

The value of Cronbach's Alpha in Table 4.8 for both is high and above 0.7

(0.822 for future user and 0.871 for existing user) which indicates that the data are

reliable.

Table 4.8: Reliability Statistics

Test Cronbach's Alpha Cronbach's Alpha

Based on

Standardized Items

N of Items

Future User 0.822 0.843 35

Existing User 0.857 0.871 32

64

4.5 Inferential Statistical Analysis

Analysis is based on bivariate correlation and regression to produces a linear

equation.

4.5.1 Bivariate

The Bivariate Correlations procedure computes Pearson's correlation

coefficient with their significance levels to measure how variables or rank orders are

related.

4.5.1.1 Interest

Table 4.9 shows that income, family income and monthly bill shows

significant correlation with interest (p<0.01) whereas education is significant at a

95% confidence level (p<0.05).

65

Table 4.9: Data correlation

Variables

Interest

Pearson

Correlation Sig.(2-tailed)

Gender -0.009 0.924

Age 0.115 0.238

Race 0.150 0.123

Education 0.233* 0.016

Marital Status 0.030 0.762

Religion 0.012 0.904

Income 0.395** 0.000

Family Income 0.491** 0.000

Monthly Bill 0.379** 0.000

Note: ** Correlation is significant at the 0.01 level (2-tailed)

* Correlation is significant at the 0.05 level (2-tailed)

Dependent variable (Interest)

4.5.1.2 Willingness-to-pay (WTP)

As for WTP, income have significant correlation with WTP (p<0.01) and

both education and family income have significant correlation with WTP (p<0.05) as

shown in Table 4.10.

4.5.2Regression

Regression is for modeling and analysis of numerical data consist of

independent and dependent variables. Linear regression is to adjust the values of

slope and intercept to find the line that best predict Y from X from the linear

equation Y = mX + C, where the Y is represent with dependent variable, m is the

slope value, X is the independent variable and c is the constant value which is the

intercept of the linear graph at y-axis.

66

Table 4.10: Data correlation

Variables

WTP

Pearson

Correlation Sig.(2-tailed)

Gender 0.188 0.052

Age 0.172 0.076

Race -0.005 0.959

Education 0.218* 0.024

Marital Status -0.002 0.982

Religion -0.041 0.676

Income 0.385** 0.000

Family Income 0.217* 0.025

Monthly Bill 0.145 0.135

Note: ** Correlation is significant at the 0.01 level (2-tailed)

* Correlation is significant at the 0.05 level (2-tailed)

Dependent variable (WTP)

4.5.2.1 Interest

From the model summary, there are two models obtained from SPSS. The

first model is with Income as the independent variable whereas model two with

income and gender as the independent variables. From the model summary, we can

choose the best model. The best model is the model with highest R square value.

Model one’s R square value is 0.148. However, model two have a higher R square

value which is 0.193. This indicates that model two is the best model for dependent

variable which is interest.

67

Table 4.11: Model Summary

Model R R

square

Adjusted

R square

Std.

error of

the

estimate

Change statistic

R

square

change

F

change

df1 df2 Sig. F

change

1 0.385a 0.148 0.140 0.37005 0.148 18.256 1 105 0.000

2 0.439b 0.193 0.178 0.36189 0.045 5.791 1 104 0.018

a. Predictors: (Constant), Income

b. Predictors: (Constant), Income, Gender

From Table C1 in Appendix C, Anova (analysis of variance between groups)

shows that both models have a significance value of 0.000. This shows that both

model are significance with p<0.01 significance level. Below are the models for

dependent variable interest.

Table 4.12: Model for Interest

Model Linear Regression

Model 1 Interest = 1.429 + 0.125 (I)

Model 2 Interest = 1.159 + 0.129 (I) + 0.169 (G)

As mention earlier, due to higher R square, model two is the best model.

Therefore, the linear regression for interest as the dependent variable is:

Interest = 1.159 + 0.129 (I) + 0.169 (G) (4.1)

Where, I = Income; G = Gender

68

4.4.2.2 Willingness-to-pay (WTP)

There is also a linear regression for WTP. As shown in the Table 4.13, there

are two models obtained from SPSS. The first model is with family income as the

independent variable whereas model two with family income and gender as the

independent variables. Model one’s R square value is 0.241 and model two have a

higher R square value which is 0.272. From this result we can conclude that the best

model is model 2.

Table 4.13: Model Summary

Model R R

square

Adjusted

R square

Std.

error of

the

estimate

Change statistic

R

square

change

F

change

df1 df2 Sig. F

change

1 0.491a 0.241 0.234 3280.40 0.241 33.360 1 105 0.000

2 0.521b 0.272 0.258 3228.75 0.031 4.386 1 104 0.039

a. Predictors: (Constant), Family Income

b. Predictors: (Constant), Family Income, Status

From Table 1 in Appendix B, Anova (analysis of variance between groups)

shows that both models have a significance value of 0.000. This shows that both

model are significance with p<0.01 significance level. Below are the models for

dependent variable WTP.

Table 4.14: Model for WTP

Model Linear Regression

Model 1 WTP = 1650.057 (FI) – 748.299

Model 2 WTP = 874.752 + 1898.77 (FI) – 1459.587 (MS)

69

Due to higher R square, model two is the best model. Therefore, the linear

regression for WTP as the dependent variable is:

WTP = 874.752 + 1898.77 (FI) – 1459.587 (MS) (4.2)

Where, FI = Family Income; MS = Marital Status

CHAPTER 5

DISCUSSION AND CONCLUSION

5.1 Introduction

This chapter presents the discussion and conclusion on the outcome of the

project. Discussion is divided into three sections. This chapter also summarizes

the thesis by determining how the objectives in Chapter 1 have been fulfilled. The

objectives of this project are to to evaluate the level of awareness of solar energy,

to study the potential for use of solar energy and to evaluate willingness-to-pay

for solar energy. Therefore, the first section will be the discussion and conclusion

for evaluation of awareness level on solar energy. The second part of the

discussion will be on the potential for use of solar energy that involves the interest

level of the respondents in study area. Last part will be on the evaluation of

willingness-to-pay for solar energy where the average value of WTP will be

presented.

71

5.2 Level of awareness of solar energy

As stated in Chapter 1, the first objective is to evaluate the level of

awareness of solar energy. This study shows that, based on the answer and

opinion from the respondent, the level of awareness is high. 81.6% respondents

agree that solar power can be used to turn the lights on and heat water. This

indicates that a majority of the respondents knows that solar energy can also be a

source of energy for electricity. 19.2% of the respondents do not know that energy

generated from oil, nuclear power and coal causes environmental pollution. This

shows that there are still a small number of respondents that are not exposed by

the environmental impacts of electricity generation from fossil based or non-

renewable sources such as coal, oil and gas.

However, 83% of the respondents show interest in photovoltaic system. A

majority of the respondents agree that solar device will not stop working in cloudy

weather when the solar radiation is mainly indirect or reduced. A solar device

does not stop working when the solar radiation is reduced. However, the

efficiency of the device is lower than the efficiency with average daylight. The

latest solar photovoltaic technology is the thin film technology. The capability of

thin film technology solar cells to work under low light condition makes

photovoltaic usage more efficient and more power could be obtained from

sunlight.

73.8% agree that homebuilders should offer solar power as an option for

new homes. In comparison with the result of survey in America, the result is

slightly behind as 87% of Americans are in favour of this option. This result is

obtained from the Roper Survey which was carried out in 2007. It shows that a

developed country possesses a higher awareness on the green technology if being

compared to a developing country.

72

5.3 The potential for use of solar energy

Based on the analysis, 83% of the respondents show interest in

photovoltaic system. This shows that there is a potential for solar energy in study

area. The country's electricity tariff, which is among the lowest in the world, is

one of the reasons why some of the respondents think that solar power is not

needed. This study shows that interest in solar technology depends on personal

income and gender. Those with higher personal income are more interested in this

technology. Knowing that solar energy installation is costly, respondents with

higher income are more interested if compared to those with lower income. It also

shows that female have higher interest in solar energy compared to male.

65.4% of the respondents agree the most important point of improvement

in order to make them reconsider to use solar energy is lower initial purchase

price. The BIPV technology cost reduction in Malaysia of 20% during the period

2005 to 2010, and a moderate estimation of a further 30% during the period 2010

to 2020. From this information, it is projected that the number of people interested

in photovoltaic will increase in the future as the purchase price of the technology

reduces. From the case study, the main problem associated with solar energy is

cloudy areas may not get enough sun exposure. Currently in Malaysia, among the

types of solar photovoltaic installed are mono-crystal and multi-crystal. The latest

technology is the thin film technology or also known as amorphous crystals can

overcome this problem as it have no difficulties work under low light condition.

73

5.4 Willingness-to-pay for Solar Technology

Figure 5.1: Willingness to pay

Based on the WTP result as shown in Figure 5.1, the range of WTP is

from RM 1,000 to RM 25,000. The mod of WTP value is RM 5,000 and the mean

value is RM 4,160. The concept of willingness to pay is explained to the

respondents as some of the respondents do not understand the idea of willingness

to pay. Description of WTP to the respondents is the maximum amount a person

would be willing to allocate for a solar technology installation at their home for

electricity generation.

Currently in Malaysia, the price of building integrated photovoltaic is in

the range of RM 22,401 to RM 31,410 per kilowatt peak as shown in Figure 2.7 in

Chapter 2. One kilowatt peak of energy produced by solar building integrated

photovoltaic system produces about 91.67 kilowatt hour of electricity (MBIPV,

2008). The current price of installation is relatively high in comparison with the

price the respondents at the study area are willing to pay. This may affect the

interest of the public to utilize solar energy. As the price is high, only those with

high income are willing to spend more if compared with those with lower income.

0.0

5.0

10.0

15.0

20.0

25.0

30.0

Percentage of respondents, %

74

It is proven with the result of this study where the value of WTP is higher

for those with higher family income whereas, those with lower income are willing

to pay smaller amount of money for solar technology. The study shows that the

value of WTP depends on the family income and marital status. The WTP is

higher for those with high family income and single respondents. It can be

expressed through the linear equation below:

WTP = 874.752 + 1898.77 (FI) – 1459.587 (MS) (5.1)

Where, FI = Family Income; MS = Marital Status

The constant value for marital status is with a negative sign. As single is rated

as one and married is rated as two, the negative sign indicates that single respondents

tend to pay a higher amount of money for solar technology installation for their

home. Married respondents especially those with children need to budget their

expenditures for their basic needs and personal expenses. This is one of the reasons

why married respondents are less interested in spending more on solar technology.

As for single respondents, their monthly expenses are less than those who are

married. This is one of the reasons why single respondents are willing to pay more

than married respondents.

5.5 Conclusion

The result from the discussion shows that the public’s level of awareness is

high. The respondents are aware that solar energy can be used to generate electricity.

It is also shown that more people will use solar energy as the initial purchase price

for solar technology is lower.

75

There is a potential for solar energy to develop in study area as the interest on

the technology is high whereby a majority of the respondents are interested in solar

photovoltaic system to generate electricity. This study shows that interest in solar

technology depends on personal income and gender. Those with higher personal

income are more interested in this technology. It also shows that female have higher

interest in solar energy compared to male. This is proven through the equation

Interest = 1.159 + 0.129 (I) + 0.169 (G) where I represents income and G represents

gender.

Through this study, result shows that people with higher family income and

single are likely to show willingness to pay more for solar technology. The linear

equation for WTP is obtained where WTP = 874.752 + 1898.77 (FI) – 1459.587

(MS). FI represents family income and MS represents marital status. Result shows

highest WTP of RM 5,000 (mod). There is a high potential for solar energy if the

price is RM 4,140 (mean). The range of WTP is between RM 1,000 to RM 25,000.

From the case study, the main problem faced by the current users associated with

solar energy is cloudy areas may not get enough sun exposure where it can be

overcome by using the thin film technology.

5.6 Limitation of the Study

The outcome of this study is limited to the study area which is in Kuala

Lumpur. Therefore, the awareness and opinion on solar technology may differ

than other places in Malaysia especially if compared to rural areas as Kuala

Lumpur is an urban city. The result may change in the future as it is also related to

the price trend of photovoltaic where it is predicted to be lower in the future.

76

5.7 Recommendation

To ensure that the performance of the study is improved in terms of

accuracy and data acquisition, some recommended solutions are suggested:

1. Survey should be carried out in other study areas which include urban

areas and rural areas so that comparison can be made. From the result, a

comprehensive relationship can be established.

2. A more thorough study should be carried out for more details and

information on the potential of solar technology in Malaysia. The

respondents should be informed with the current pricing of solar

technology.

3. For future study, it is recommended to include a marketing survey to

observe the current price trend of solar technology.

4. Carry out a very detailed study about solar panel energy payback period so

that the public are knowledgeable.

.

77

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