This article first appeared in Enterprise, The Edge Malaysia Weekly on November 13, 2017 - November 19, 2017
Jessie Ambukon’s farm stands out easily from its neighbouring plantations in Tuaran, Sabah. Instead of a flat plain dotted with grass and trees, a 4m-high steel structure covers about three acres of her land. It is topped by gleaming solar panels that can generate up to 1mw of electricity.
The sight is so unusual that it often draws the attention of government officials and visitors, who are curious about what lies under the structure. “They think we have a steel factory and that we are installing cars. They don’t even realise this is a farm. And then they peep under the structure and all they see are goats,” Ambukon laughs.
She works with her husband and four of his associates to run a hybrid farm that generates two streams of income — one from livestock produce and the other from the electricity generated by the array of solar panels.
Ambukon set up Farm Bay Sdn Bhd two years ago to sell live goats, quail eggs and salted eggs. She runs the business herself and has successfully marketed the produce, which can be found in 53 supermarkets in Sabah.
The solar panels are managed by Energy Bay Sdn Bhd, formed by Ambukon’s husband, Aubrey G Sham, and four associates. The energy generated by the panels are fed back into the grid and sold to the local utility through the Feed-in Tariff (FiT) programme set up by Sustainable Energy Development Authority Malaysia (Seda).
When the idea was hatched, it was difficult to get approvals from the local authorities because the hybrid farm was an untested concept. There were many misconceptions about the safety of solar panels as well. But the team went ahead with the project and the attention it garnered helped inform both the authorities and their neighbours how hybrid farms could work.
“This is like a monument. It attracts people from the government to come and look at it because they wonder what is down there. When they recognise that it is actually a farm, they become interested because it is something new. I think we are the first in Tuaran,” says Aubrey.
Increasing electricity supply
One of the reasons Energy Bay decided to set up a solar farm in Sabah is because the state has clear and unpolluted skies, which get a high quality of direct sunlight. Also, it helps address a problem the area faces — electricity outages.
“The utility has been saying there is a need to increase the electricity load in Tuaran. There are some houses where you cannot install more than one air conditioner because there isn’t enough power,” says Energy Bay executive chairman Datuk Verus Aman Sham.
Ambukon, who grew up in Tuaran, agrees. She has had several electrical appliances break down due to the inconsistent electricity supply over the years. “At peak periods, the lighting is dim and we cannot see things clearly. Some people cannot cook in such conditions,” she says.
Building a farm beneath the solar panels addresses the problem of wasted land. Usually, solar panels are mounted on the ground, which renders what is essentially productive land useless. To encourage useful activity beneath solar panels, the federal government has offered an incentive for the adoption of building-integrated photovoltaics (BIPV). Solar farm operators who carry out productive activities beneath these panels are rewarded with a special tariff.
The self-sustaining activity has to be inspected and acknowledged by Seda before the operator qualifies for the special tariff. “We have used every inch of this shaded area for activity. Seda has very strict requirements and it conducts an audit every three months,” says Ambukon.
She had started out by rearing animals on the land. It was only later that the decision was made to build the solar panel structure. At the time, her production was just enough to support her family and the local community. The size of the solar panel structure allowed her to conduct her farming activities under the shade.
“They [the Energy Bay partners] chose the land here because we had already started the farm. So, they did not need to find things to do below the solar panel structure. I decided to help because part of it is developing our land. And I definitely want to expand beyond the local market. If I do this, I will have an opportunity to grow,” says Ambukon.
New concept, new challenges
Setting up the solar panel structure and expanding the farm were not easy. Apart from Verus, who was retired, the other directors of Energy Bay had full-time jobs and two of them were based in Peninsular Malaysia. Ambukon had to temporarily relocate her farm to assist in the supervision of the construction. They also had to make sure the solar farm was up and running within a year, which was the deadline given by the government, after they qualified for the FiT programme in 2015.
“They call it passive income. I say it is in no way passive! For the first six months, it was all hands-on and hard work. Everybody was on the ground and it was really sweat and tears to meet the deadline,” says Aubrey.
There were challenges when it came to obtaining the approvals. The authorities had to come and check whether they had productive activity beneath the solar panels. They also had to deal with zoning issues because the structure was built in their home compound.
“Because solar development is new in Malaysia — and even newer in Sabah; Semenanjung is two years ahead of us — when you go to the council, nobody knows what a solar farm is. They do not know how to process it,” says Verus.
“It is not easy for people to go into it. You must make sure that your land can be utilised for that purpose.”
They managed to set up the solar farm by the deadline, but they only received the approval for the BIPV special tariff this year. The unexpected delay has affected the management of their finances.
The whole system had cost RM10.5 million to set up — RM8.6 million came from a bank loan while RM1.9 million was from the shareholders. “We are already in the main part of the project, but without the special tariff, it is a non-viable venture,” says Energy Bay technical director Sim Guo Jong.
The FiT quota will give them a return of 92 sen per kWh. With the BIPV, it will go up to RM1.0855 per kWh. The amount of sunlight that can be successfully converted into electricity and fed to the grid will also have to be factored into their calculations.
“The sun rises at 6am and sets at 6pm. So, technically, we have 12 hours [to harvest sunlight]. But in reality, we only have about 3.5 hours because of the passing clouds,” says Aubrey.
Energy Bay finance director William Lean says the farm can generate roughly 4,000kWh per day — enough electricity for about 290 houses. The company makes about RM130,260 from the FiT programme and BIPV, RM100,000 of which goes towards their loan payments.
“One of the issues with cash flow was the delay in getting the special tariff. I think it is unrealistic to expect that once you build the solar panels, you will have full activity beneath it immediately. We took 1½ years to achieve this. In the meantime, we struggled a little in terms of cash flow,” says Lean.
Exporting livestock produce
During this time, Ambukon started to make a name for herself by expanding her farming activities. Even before her husband and his associates had the idea of setting up the solar panels, she was already running a farm on the land, but it was not for commercial purposes.
Ambukon had grown up in a farming family in Tuaran, where she and her siblings learnt to manage animals from a young age. It was a small farm, so they only produced enough for the family and community to consume.
She continued this activity after her parents gave her the farm. But the animal population began to increase and she was interested in a more commercial venture. Energy Bay’s proposal for the solar farm showed her just how to go about doing it.
“I decided to enter a new market, so I would have to produce more, promote more and let people know that this is the product of farming under solar panels,” says Ambukon.
She set up different sections for her 4,500 ducks and 1,600 quails. She also built compartments for her employees to produce salted eggs, which are her most popular products. The extra space allowed her to increase the daily egg production from 200 to 1,900.
Ambukon participates in exhibitions and makes contacts to sell her products in more places. “If I double the production, I also need to double the market. Our next target is Peninsular Malaysia. That is why I applied for the halal certification for our egg yolk products,” she says.
She wants to export duck egg yolk products, but she still has to figure out how to transport them while maintaining their freshness. “I think the eggs can last two weeks to a month, but we need to put them into a chiller so that they last even longer. The logistics is really important,” says Ambukon.
“That is why there are a lot of things to learn and this takes time. I need to find a proper channel and make money as well. All this is not cheap.”
Innovative solar farms
The FiT programme will pay Energy Bay a premium rate for 21 years. After that, the company will decide if it will renew its power purchase agreement with the utility or sell the electricity generated at another price.
“Even when it is not operational, Farm Bay can still use the solar panels as a shade. The technology is changing a lot. So after 21 years, we may change to something better,” says Verus.
The concept of having productive activities beneath the solar panels is beginning to take off. People are experimenting with activities that can be performed below solar panels, including mushroom and bee farming. Some are using the space for entertainment purposes, building mazes and even futsal courts beneath the structures.
“Nearby, there are three solar plants. Ours is unique because it is a hybrid farm. The others have yam plantations,” says Sim.
The Energy Bay directors hope to educate Malaysians on how hybrid farms can be operated and on the importance of renewable energy. “Two or three groups have expressed interest in visiting the farm. Groups can hold vocational or educational programmes here,” says Verus.
“Ultimately, we would like to turn this into a tourist destination. We can organise visits for students and other groups because they want to know what solar is, why the government is pushing for solar energy and how solar farms can help small and medium enterprises or rural businesses.”
Sunshine state
Malaysia has a lot of potential when it comes to generating solar energy. And Sabah is the best place in the country to do this because of the amount of sunlight it receives.
According to a report by an energy and resources group with the University of California, Berkeley, Malaysia receives insolation (a measure of solar radiation) of between 4 and 6kWh/m2 per day. Sabah receives insolation of 5kWh/m2.
Kota Kinabalu, in particular, is an ideal spot to capture solar energy. It receives an average solar radiation of 1,900kWh/m2 annually — the highest of all cities in Malaysia. This is followed by Bayan Lepas and George Town in Penang and Taiping, Perak, according to a report by the Sustainable Energy and Environment Forum.
The solar potential has been recognised by the federal and state governments. Earlier this year, solar photovoltaic plants that can produce up to 58mw of electricity were approved for construction in Kudat, Sabah. The power generated will be distributed across the state.
Meanwhile, the Ministry of Energy, Green Technology and Water plans to set up a research centre for wind and solar energy in the area to ramp up renewable energy generation. The additional sources of energy will be welcomed in the state, where outages often occur. This is especially true in eastern Sabah, which heavily depends on diesel-powered plants, according to newspaper reports.
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