TL;DR
- Malaysia’s NETR targets 40% renewable energy by 2035 and 70% by 2050. The 31% milestone was achieved in 2025.
- The right scheme depends on your situation. Rooftop owners choose between Solar ATAP and SelCo. Businesses without panels use CRESS or GET.
- GITA, GITE, and GTFS 5.0 all expire on 31 December 2026. Act within the window to recover part of your solar investment through the tax system.
- Households above 600 kWh per month pay a monthly fuel adjustment on every unit consumed. Solar offsets it in the same billing period.
- For any solar contractor, check for SEDA GCPV certification, CIDB grade, in-house chargemen, and grid approval experience before committing.
Malaysia crossed the 31% renewable energy milestone in 2025. What the headlines rarely explain is what that shift means for your electricity bill, your business costs, and the decisions now in front of you.
The shift toward renewable energy in Malaysia is driven by 3 pressures: energy security, rising fossil fuel costs, and binding international climate commitments. The grid now draws from solar, hydro, biomass, and biogas.
Malaysia’s renewable energy roadmap sets confirmed National Energy Transition Roadmap (NETR) targets of 40% by 2035 and 70% by 2050. Government policy documents set the framework, but do not tell you which scheme fits your situation. This article does.
The Renewable Energy Mix: Sources, Shares and Outlook
The Malaysian energy transition is not a solar-only story. The national mix draws from several sources, each playing a different role depending on geography, dispatchability, and grid function.
The table below covers each source contributing to Malaysia’s renewable energy mix, its current share, and where it is headed.
| Source | Role | Installed Capacity / Share (2026) | Outlook |
| Solar PV | Distributed and utility-scale | Surpassed 5.7 GW (end-2025) | Fastest-growing |
| Hydropower | Baseload (primarily Sarawak) | Largest RE baseload in East Malaysia | Stable |
| Biomass | Dispatchable complement | Moderate; palm oil and timber sectors | Steady; growing off-grid role |
| Biogas | Dispatchable complement | Small; agricultural and waste-based | Expanding |
| Floating Solar | Emerging pilot | Not yet at commercial scale | Under evaluation |
| Green Hydrogen | Emerging pilot | Not yet at commercial scale | Long-term; export focus |
| Coal | Transitional (phasing out) | Significant current share | Phase-out by 2044 |
| Natural Gas | Transition fuel | Active; grid stability | Retained medium-term |
Floating solar and green hydrogen remain at pilot stage. The direction is settled. What is still open is when you act.
The scheme that applies to you depends on which part of this mix you can participate in.
Which Renewable Energy Scheme in Malaysia Is Right for You?
The right scheme depends on whether you are installing panels, exporting to the grid, or procuring renewable energy without physical generation on-site. The schemes divide into 3 groups:
- Rooftop Installers: Solar ATAP and SelCo.
- Businesses Without Panels: CRESS, GET, and mREC.
- Utility-Scale and Large Commercial: LSS and CGPP.
The table below compares each active scheme by who it is open to, what it does, and its key conditions.
| Scheme | Open To | What It Does | Key Condition or Limit |
| Solar ATAP (Accelerated Transition Action Programme) | Residential and commercial rooftop owners | Export excess generation to grid for bill credits | Launched 1 January 2026; not available in Sarawak |
| SelCo (Self Consumption) | Residential and commercial | Full self-consumption; no export | No grid export permitted |
| CRESS (Corporate Renewable Energy Supply Scheme) | Businesses and corporates | Procure renewable energy via virtual power purchase agreement (PPA) without installing panels | Requires subscription to a CRESS-registered generator |
| GET (Green Electricity Tariff) | Businesses and corporates | Pay a premium on TNB bills for certified renewable electricity | Satisfies Scope 2 reporting; no physical generation required |
| mREC (Malaysian Renewable Energy Certificate) | Businesses and corporates | Purchase certificates representing renewable generation | For ESG and sustainability reporting only |
| LSS (Large Scale Solar) | Utility-scale developers | Long-term PPA with TNB under competitive tender | LSS6 mandates battery energy storage system (BESS) integration for all new awards |
| CGPP (Corporate Green Power Programme) | Large commercial and industrial users | Direct bilateral green power procurement from Independent Power Producer (IPP) | Subject to TNB wheeling charges and grid approval |
The table above tells you what each scheme does. What it cannot tell you is whether your roof, your meter type, or your TNB account category makes one the obvious choice. Book a free consultation with Northern Solar for a conversation about your specific setup, not a rerun of the same guide you just read.
What the Numbers Actually Look Like for Malaysian Businesses
2 structural cost pressures are now running simultaneously, and both are permanent.
- The Energy Commission confirmed the RP4 base tariff at 45.4 sen/kWh, effective 1 July 2025 through 31 December 2027, the first significant revision in over a decade. A carbon pricing mechanism targeting high-emission sectors, including energy, is also in development.
- Malaysia’s National Sustainability Reporting Framework mandates ESG disclosure. Renewable energy procurement reduces Scope 2 emissions, making rooftop solar, CRESS, or GET a compliance tool as much as a cost one, supporting IFRS S2 alignment.
The cost pressures above are structural. So is the government support designed to offset them? 3 incentives make solar adoption particularly favourable for businesses in 2026:
| Incentive | What It Does | Who Applies To | Deadline |
| GITA (Green Investment Tax Allowance) | Up to 100% capital allowance on solar expenditure, offset against up to 70% of statutory income per year | Apply to MIDA or MGTC before qualifying expenditure is incurred | 31 December 2026 |
| GITE (Green Income Tax Exemption) | Up to 70% income tax exemption on statutory income from qualifying solar leasing projects | Projects meeting MIDA's approved capacity thresholds | 31 December 2026 |
| GTFS 5.0 (Green Technology Financing Scheme 5.0) | Government guarantee of 60% to 80% on green technology loans via participating financial institutions | Businesses applying through registered financial institutions | 31 December 2026, subject to allocation |
GITA and GTFS 5.0 together reduce tax liability and improve loan terms, and all 3 close on 31 December 2026.
Can Going Solar Actually Lower Your TNB Bill?
For homeowners, the answer is yes, and the mechanism is more direct than most people realise.
- The Automatic Fuel Adjustment (AFA) replaced the ICPT mechanism in July 2025. It recalculates monthly; adjustments up to 3 sen/kWh are automatic, with larger changes requiring Cabinet approval. Households at 600 kWh or less are exempt. Above that, every unit consumed carries the AFA, and every unit your solar panels generate offsets it directly.
- The SuRIA Home programme pays RM600 per kWac, up to a maximum of RM3,000, directly to your bank account after TNB commissioning. It runs until 31 December 2026 or until the RM150 million allocation is fully utilised, whichever comes first.
- Solar ATAP is the export pathway; SelCo keeps all generation on-site.
- Your property type determines system capacity, cost, and payback.
Before your consultation, have these ready:
- Last 3 months of TNB bills (average monthly kWh)
- Property type and usable roof area
- Electrical supply type (single-phase or three-phase)
- Whether you want to export surplus generation (Solar ATAP) or keep it on-site (SelCo).
If you have those 4 things ready, you have everything Northern Solar’s sales team needs to give you a real answer. Their first conversation is a sizing conversation, not a sales pitch. Reach out to Northern Solar when you are ready.
How the Renewable Energy Market in Malaysia Actually Works
Whether you are a homeowner or a business, the next decision is which type of company you engage to design, build, and maintain your solar installation. The market has 3 distinct layers.
| Layer | Role | Who They Serve |
| Independent Power Producer (IPP) | Owns and operates large-scale generation assets under government concession | Government and TNB under long-term PPAs |
| Engineering, Procurement, Construction, and Commissioning (EPCC) Contractor | Engineers, procures, constructs and commissions solar systems | Residential, commercial and industrial buyers |
| O&M Provider | Maintains systems post-commissioning | Existing solar asset owners |
Residential and commercial buyers typically engage an EPCC contractor. The right one manages the full scope under a single engagement: design, grid approvals, commissioning, and ongoing maintenance.
For any green energy company in Malaysia, prioritise:
- Sustainable Energy Development Authority (SEDA) Grid-Connected Photovoltaic (PV) certification
- Construction Industry Development Board (CIDB) contractor grade
- In-house licensed chargemen
- A track record of managing grid interconnection approvals end-to-end.
A company that only supplies hardware and subcontracts the rest introduces coordination risk at every handover.
Frequently Asked Questions About Renewable Energy in Malaysia
The questions below cover the most common decisions readers face before choosing a scheme or contractor.
What is Malaysia’s renewable energy target for 2030?
The NETR confirms 40% by 2035. Government officials have indicated 35% by 2030 as an interim marker, not yet a formal NETR milestone.
What replaced NEM 3.0 in Malaysia?
NEM 3.0 closed in June 2025. Solar ATAP launched on 1 January 2026, allowing rooftop owners to export excess generation to the grid for regulated bill credits.
What is the difference between Solar ATAP and SelCo?
Solar ATAP sends surplus generation to the TNB grid in exchange for bill credits. SelCo keeps everything on-site with no export. Solar ATAP does not apply in Sarawak, which runs its own scheme under Sarawak Energy.
How does CRESS work for businesses?
CRESS lets businesses procure renewable energy via a virtual PPA without installing panels on their premises.
What is the Solar ATAP export credit rate for residential homes in Malaysia?
Solar ATAP uses a regulated bill credit structure set by the Energy Commission. Rates vary by system size and consumer category; confirm yours with your EPCC contractor or SEDA Malaysia.
Take the Next Step on Renewable Energy in Malaysia with Northern Solar
The schemes are clear. The incentives have a deadline. The tariff is locked in until December 2027. The decision that remains is yours, and it starts with a real conversation, not a quote.
Northern Solar is a government-registered EPCC provider, publicly listed on Bursa Malaysia’s ACE Market, with certified engineers handling the full scope across residential, commercial, and utility-scale projects throughout Malaysia. As one team under one engagement, there is no handover risk.
Speak to Northern Solar and get your site assessment, the first real number in the process.
