Some segment of the public has recently expressed concern over the decision taken by the government to cut electrical subsidies to the T20 group. Using income as the sole indicator of T20 classification is misleading. Moreover, it’s not always realistic to base the distribution of subsidies solely on the quantity of power consumed. This situation raises a few questions on whether it is appropriate to rely only on the distribution of electricity subsidies merely on the amount of household monthly power consumption or whether it is proper to classify a household’s income as T20 based on the monthly electricity usage.
The increase in the cost of living and the price of commodities, including basic needs, put more pressure on the consumer. Currently, the rise in living cost does not correlate to the increase in income. According to the Malaysia Department of Statistics Analysis of the 2022 Annual Consumer Price Index, the cost of the following items have risen: food and beverage (5.8%), transportation (4.7%), and housing (3.5%). These are all necessities. According to Job Street Malaysia’s 2022 Salary Report, salary increases in Malaysia have averaged 3.2 per cent yearly. Is the rise in income enough to compensate for the higher cost of living and increased price of consumer goods?
It is critical to find a solution to the above-mentioned problem. What are the feasible alternatives to help consumers cope with the rising cost of electricity bills? Although this issue appears specifically to the T20 group, in the near future, every segment of society may no longer receive subsidy assistance due to the extremely high cost of supplying electricity and its relation to various environmental issues.
Bearing that in mind, our government should not eliminate subsidies before establishing a more comprehensive household or consumer support system. Not only the support system will help consumers manage increasing electricity bills but it will also contribute to environmental conservation, particularly in the current climate change challenges.
In this sense, our government should encourage Malaysian households to install solar PV systems. This effort will help lower electricity expenses and reduce carbon emissions that contribute to global warming. However, the cost of establishing a solar PV system is high, and not accessible to all level of households. As a result, a mechanism must be devised to ensure that all stakeholders would benefit from this system.
In this context, we should consider forming an energy endowment or energy waqf to fund the installation of solar PV systems. This could be accomplished by establishing a cash waqf fund that can be used to build clustered solar PV installations. In this sense, all levels of communities might contribute appropriately to the fund. Businesses, banks, and other organisations could also donate to this fund as part of their CSR programmes. The fundamental benefit of waqf is that it benefits communities of all races and religions. As a result, the advantages of this initiative are open and diversified.
The Federal Government should lead the proposed energy waqf fund, with assistance from the State Governments. Although the concept presented in this article is straightforward, it needs to be polished further. Following an in-depth discussion among various waqf stakeholders in Malaysia, the development and implementation of the energy waqf could be streamlined even further.
Simultaneously, educating Malaysian households to use electricity wisely and efficiently is essential. They should also have the option of using energy-efficient electrical appliances as part of energy conservation measures. Consumers should be able to choose from a range of five-star energy-efficient electrical appliances such as refrigerators, televisions, and air conditioners. The application of such technology could aid in the reduction of electricity consumption. However, five-star electrical products are costly, and not all customers can afford them. Although using five-star electrical appliances will benefit consumers in the long run, the increased cost of these types of equipment may prevent many consumers from purchasing them.
In this context, a mechanism to encourage consumers to utilise five-star or energy-efficient electrical appliances must be devised. A government body, Malaysian Sustainable Energy Development Authority (SEDA), once offered an RM400 rebate for the purchase of any energy-efficient electrical equipment. Additional approaches, such as discount cards or no-interest payment plans, should be explored to provide better chances for consumers to purchase energy-efficient appliances. Malaysia must adjust its focus in the future to exclusively offer five-star electrical equipment produced and manufactured locally at a reasonable price. Reduced electricity subsidies will have a minimal effect on households if a good support system is in place. There may be many other alternative ways to consider, besides those covered in this article. Malaysia has plenty of professionals, experts and specialists who can help establish an adequate support system to reduce the impact of subsidy cuts. An efficient support system not only allows consumers to enjoy cheaper electricity prices, but also encourages environmental conservation by lowering carbon emissions and helps to mitigate the negative impacts of climate change.