Academic journal article Global Business and Management Research: An International Journal

Factors Influencing Malaysian Consumers' Intention to Purchase Green Energy: The Case of Solar Panel

Academic journal article Global Business and Management Research: An International Journal

Factors Influencing Malaysian Consumers' Intention to Purchase Green Energy: The Case of Solar Panel

Article excerpt

Introduction

Malaysia is aiming to become a developed country in 2020. To achieve a sustainable development and a better quality of life, Malaysia has launched its latest plan, i.e. the 10th Malaysia Plan, to support, enhance and further grow the renewable energy market and industry in 2020. Some of the plans include the implementation of Feed in Tariff (FiT) system (a system that enables power provider to buy electricity produced from renewable energy resources at a fixed price for a specific period) as well as to encourage more Foreign and Domestic Direct Investment (FDI and DDI) by the MNCs and local players in renewable energy.

According to International Energy Agency (2011), solar energy has many technological applications; amongst them are solar photovoltaics (PV) that is also known as solar panel, solar hot water and concentrated solar power. PV contains PV modules that are normally electronically connected and placed on a supporting structure. The modules transform light energy (photons) from the sun into electricity through the photovoltaic effect either through on-grid or off-grid PV solar system. On-grid system is the most commonly used where electricity generated from the system is connected to the national grid. On the contrary, the off-grid system is used primarily to store electricity and is more commonly used in remote areas (Adam, 2013).

The advantage of promoting solar panel use in Malaysia is due to its tropical climate which means that the country can harness the sun's radiation to an average of 400-600 MJ/m2 per month (Mekhilef et al., 2012). Sabah, Penang, Kedah, Perak, Perlis and Kelantan are the few identified states with highest solar radiation in the country and thus, presents the biggest potential for solar panel adoption.

Although the Malaysian government is promoting the use of clean source of energy such as solar energy, the application of the green product is still very much at infancy stage in the country. Despite the government's effort to encourage solar panel usage and to develop the industry, several issues may have affected on solar photovoltaic (PV) market and industry in Malaysia in one way or another. The issues pertaining to perceived government policy, perceived high initial costs and maintenance, lack of product knowledge and experience, solar panel aesthetics, social influence, demographic factors such education level and income as well as lack of environmental attitude and concern may be part of the barriers to the adoption of domestic solar panel in Malaysia (Nik Abdul Aziz and Abdul Wahid, 2015; Faiers and Neame, 2006; Farhar & Coburn, 2000; Zhang et al., 2012; Tsoutsos & Staltiboulis, 2005; Sovacool, 2009). These issues may have become the bottleneck that affect the sustainability of businesses in this industry, particularly the Malaysian based industry players. While the use of solar panel for companies may directly support the solar panel industry's growth in Malaysia, it is important to note the limitation the industry faces if the product's usage is not expanded to include the individual consumers. It is believed that individual consumers' segment is vital to ensure the industry's survival, hence an understanding on how the various factors identified in this study may impact on the consumers' purchase intention of the product. The study will provide insights that may lead towards the creation and/or refinement on relevant policies, incentives, and strategies alike to spur the growth of the industry

Literature Review

Theory of Reasoned Action (TRA) and Diffusion of Innovation Theory (DIT)

Many studies have applied Fishbein and Ajzen's (1975) Theory of Reasoned Action or TRA as the basis of their investigation in line with the theory's main aim which is to forecast and gain insight into individual's intention to behave such as intention to purchase; it has been vast applied in many disciplines such as psychology, health, consumer behaviour, education and management. …

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