the use of willingness-to-pay (wtp) method to...
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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.
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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.
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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.
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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
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(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
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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
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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
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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
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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
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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
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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.
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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)
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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
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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.
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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
REFERENCES
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