In recent years, the strategic goals of many countries have included the achievement of high photovoltaic (PV) integration in electrical grids. Therefore, many governments have introduced incentive-based policies in an effort to encourage the private sector to invest in PV-related projects. However, these kinds of projects require a positive net present value (NPV) in order to be sponsored by non-governmental organisations. In this study, the authors investigate the impact of haze on PV systems in Malaysia due to open burning in Sumatra. As a developing country, Malaysia is aiming to increase the installation of renewable-energy (RE) sources, and thus it has implemented a feed-in tariff (FiT) mechanism. As the efficiency of PV cells increases and the cost/Wp decreases with time, the expected NPV, return-on-investment and payback period for PV systems installed in 2015 is expected to be significantly reduced. The FiT rate in Malaysia is significantly higher and the purchase agreement is longer compared with many similar countries; these make Malaysia a preferred choice for PV system investments. However, environmental disturbances such as haze have a negative impact on the yield of PV systems. During the months of September to October 2015, the transboundary haze episode in Kuala Lumpur reduced the power produced from PV systems by 17.8%. This study shows the impact of haze on PV systems, and analyses the effect of haze on the Malaysian RE action plan. This study proposes a method to estimate the reduction in power yield during the haze.
