Malaysia’s Rooftop Solar Policy Update: Certainty and Fairness for All Users
The Malaysian government has reaffirmed its commitment to supporting rooftop solar adoption while introducing new tariff and incentive adjustments to ensure a fairer system for all electricity consumers.
In a statement released by the Ministry of Energy Transition and Water Transformation (PETRA), it was announced that households using rooftop solar will continue to enjoy kWh-to-kWh offsetting for their energy bills. This policy certainty is a boost for homeowners who have invested in solar systems under previous schemes.
These changes come as Malaysia rolls out a new electricity tariff structure designed to balance energy charges and non-energy components, ensuring a sustainable and equitable energy transition for all.
Key Takeaway: kWh-to-kWh Offsetting Continues for Households
The government clarified that household users of rooftop solar can continue to use solar energy generated to offset both energy and non-energy charges on their bills.
This applies to:
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All residential rooftop solar owners previously benefiting from the Net Energy Metering (NEM) 2.0 scheme (2019–2020)
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Low-voltage users registered under NEM 2.0
This announcement addresses market uncertainty and offers homeowners reassurance that their solar investments remain financially sound even as tariff structures evolve.
Understanding the New Electricity Tariff Structure
Beginning July 1, Malaysia’s new electricity tariff framework breaks charges into:
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Energy charges: The cost of the actual electricity consumed
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Non-energy components: Covering network and capacity charges
This modernised structure ensures that grid costs are fairly shared among all users, including those who partially or fully self-generate.
Adjustments to Incentives for Energy Efficiency
While the kWh-to-kWh offset remains, the government also announced adjustments to energy efficiency incentives.
Previously, households enjoyed discounts ranging from half a sen to 25 sen per kWh, based on usage. Under the new framework:
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Incentive rates and calculations will be “adjusted appropriately” to ensure fairness
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The goal is to prevent cross-subsidisation where non-solar users indirectly bear grid costs
This balanced approach seeks to encourage solar adoption while maintaining fairness for all consumers.
Commercial and Industrial Users: Changes Under NEM 2.0 and 3.0
For medium and high-voltage users (typically businesses and factories) under NEM 2.0:
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Excess solar generation can now offset up to 25% of their network and capacity charges
For NEM 3.0 commercial and industrial users:
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Excess energy can offset the average system marginal price
These adjustments promote a more sustainable grid, while still rewarding businesses for their renewable energy investments.
Uniform Settlement Period for Rooftop Solar Programmes
Another significant update is the standardisation of the settlement period for all rooftop solar programmes to 12 months.
This move aims to:
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Make billing simpler and more predictable for users
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Help households and businesses better manage their electricity expenses throughout the year
For solar owners, a clear annual cycle improves financial planning and return-on-investment calculations.
Options for Expired NEM Users
For existing rooftop solar users whose offsetting period has expired, the government offers flexible next steps:
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Switch to the Solar for Self-Consumption (SelCo) programme
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Join the Community Renewable Energy Aggregation Mechanism (CREAM) programme
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Install energy storage systems
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Participate in future government-backed solar programmes
These options ensure that no existing solar owner is left behind as Malaysia modernises its renewable energy framework.
New Installations: 100% Offset Through SelCo
PETRA also highlighted that new rooftop solar installations under the SelCo programme can offset 100% of a user’s own electricity consumption.
This programme is ideal for:
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Homeowners looking for energy independence
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Businesses seeking to hedge against future energy price volatility
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Property developers wanting to enhance green credentials in new projects
Malaysia’s 2050 Renewable Energy Ambition
These policy updates are part of Malaysia’s broader goal to achieve a 70% renewable energy mix by 2050.
By:
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Encouraging distributed generation like rooftop solar
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Balancing grid costs fairly across all users
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Offering predictable incentives and programme options
…the government aims to make Malaysia’s energy system cleaner, more resilient, and equitable.
What This Means for Property Owners and Developers
For homebuyers:
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Rooftop solar remains a smart investment for lower energy bills and energy security.
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Properties with installed solar can command higher resale value thanks to growing demand for sustainable homes.
For developers:
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Incorporating rooftop solar and green features enhances project attractiveness to ESG-conscious buyers.
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Aligns with Low Carbon Cities Framework guidelines for approvals and incentives.
For commercial landlords:
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Solar installations can reduce operational costs, improve tenant retention, and support green leasing strategies.
Conclusion: Rooftop Solar Remains Central to Malaysia’s Green Future
Malaysia’s rooftop solar policy update offers certainty for existing users, flexibility for future adopters, and fairness for all electricity consumers.
As the nation accelerates toward its 2050 renewable energy targets, property owners and developers have a clear signal: investing in rooftop solar is not only sustainable but financially wise.
