A green loan in Malaysia is a financial product specifically designed to fund environmentally beneficial projects — and solar energy systems are the most popular qualifying use. With Bank Negara Malaysia (BNM) actively incentivising green lending and multiple banks competing for solar borrowers, 2026 is one of the best years to finance a solar installation. This guide covers every major green loan option, compares rates and terms, and shows you exactly how to apply.
What Is a Green Loan in Malaysia?
A green loan is a lending product where the proceeds are used exclusively for projects with a clear environmental benefit. In Malaysia, Bank Negara Malaysia's Climate Change and Principle-based Taxonomy (CCPT) framework defines what qualifies as a "green" or "climate-supporting" project for lending purposes.
Solar photovoltaic (PV) systems are classified as a Tier 1 green project under CCPT — meaning they meet the highest standard for environmental benefit and unlock the most favourable financing terms from BNM-supervised banks.
For borrowers, the practical benefit of a green loan versus a standard personal or business loan is threefold:
- Lower interest/profit rates: Banks offer preferential rates for green projects, often 0.5%–1.5% below standard loan rates
- Government-subsidised facilities: BNM operates specialised green financing facilities that banks can access to fund these loans at reduced cost
- Longer tenure options: Green loans frequently offer 10-year tenures versus 5–7 years for standard personal loans
BNM Green Technology Financing Scheme (GTFS): The Foundation
The Green Technology Financing Scheme (GTFS) is Bank Negara Malaysia's flagship programme to accelerate green investment. Managed by the Credit Guarantee Corporation (CGC), GTFS provides participating banks with a government guarantee on green loans — reducing the bank's risk and enabling them to offer lower rates to borrowers.
GTFS Key Features
- Government guarantee: CGC guarantees 60% of each GTFS loan, reducing bank credit risk
- Guarantee fee: 0.5% per annum, typically absorbed by the bank and not charged to the borrower
- Maximum loan per borrower: RM 100 million (for large commercial/industrial projects)
- Eligible sectors: Solar PV, energy efficiency, electric vehicles, green building, waste management
- Participating banks: Maybank, CIMB, RHB, Bank Islam, HSBC, Standard Chartered, AmBank, Hong Leong Bank, and others
BNM Low Carbon Transition Facility (LCTF)
Alongside GTFS, BNM operates the Low Carbon Transition Facility (LCTF), specifically targeting SMEs transitioning to low-carbon operations. This is the most impactful green loan for Malaysian businesses installing commercial solar:
- Subsidised rate: Maximum financing rate of 3.5% p.a. (well below market)
- Facility size: RM 1 billion total (first-come, first-served across all participating banks)
- Maximum per SME: RM 10 million
- Eligible SMEs: Revenue below RM 50 million, registered with SSM, minimum 2 years operation
- Eligible projects: Solar installation at business premises, energy efficiency upgrades, EV fleet
Important: LCTF funds are finite and allocated on a first-come-first-served basis. If you are an SME considering commercial solar, apply as early as possible in 2026 to access the 3.5% rate before the facility cap is reached.
All Major Malaysian Banks: Green Loan Comparison for Solar 2026
Here is a comprehensive comparison of every major bank offering green loans for solar energy in Malaysia as of February 2026:
| Bank | Product Name | Rate (p.a.) | Max Tenure | Max Amount | Islamic Option | GTFS/LCTF Access |
|---|---|---|---|---|---|---|
| Maybank | Green Personal Financing / HouzKEY Green | 4.0%–5.0% | 10 years | RM 100,000 | Yes (Maybank Islamic) | Yes |
| CIMB | Green Personal Financing / SME LCTF | 3.5%–4.5% | 10 years | RM 100,000 (personal) / RM 10M (SME) | No (CIMB Islamic separate) | Yes (LCTF for SME) |
| RHB | RHB Green Home Financing | BR + 1.0%–1.5% | 10 years | RM 150,000 | Yes (RHB Islamic) | Yes |
| Bank Islam | Personal Financing-i / SME Green Financing-i | 3.99%–4.99% | 10 years | RM 150,000 (personal) / RM 20M (SME) | Yes (fully Islamic) | Yes (LCTF) |
| HSBC | HSBC Green Loan | 3.75%–4.75% | 10 years | RM 200,000 | Yes (HSBC Amanah) | Yes |
| Hong Leong | HL Green Home Financing | BR + 0.95%–1.4% | 35 years (property) | Up to property value | Yes (HLB Islamic) | Yes |
| Standard Chartered | Green Personal Loan | 4.5%–5.5% | 7 years | RM 250,000 | No | Yes |
| Public Bank | Personal Financing (Green Add-on) | 5.0%–6.5% | 5 years | RM 150,000 | No | Indirect |
| AmBank | AmGreen Financing | 4.88%–5.99% | 7 years | RM 150,000 | Yes (AmBank Islamic) | Yes |
Rates as of February 2026. All rates are indicative and subject to individual credit assessment. Islamic rates shown are profit rates under Murabahah/Tawarruq structures. BR (Base Rate) as of February 2026: ~2.75%–3.00% across major banks.
Best Bank for Each Borrower Type
With nine banks offering green loans, the right choice depends on your specific situation:
Best for Lowest Rate (SME): CIMB or Bank Islam via LCTF
Both CIMB and Bank Islam can access BNM's LCTF facility at 3.5% p.a. for qualifying SMEs. If you are a Muslim business owner, Bank Islam's LCTF product gives you Islamic compliance at the same rate. If you are non-Muslim or indifferent to Shariah compliance, CIMB's SME green financing is equally competitive.
Best for Highest Loan Amount (Residential): HSBC
HSBC's RM 200,000 ceiling for personal green loans is the highest in the market. For large residential systems (12kWp–20kWp) costing RM 80,000–RM 150,000, HSBC gives the most headroom without requiring property collateral.
Best for Islamic Compliance: Bank Islam
Bank Islam is Malaysia's oldest and most established Islamic bank. Their Shariah Advisory Board has extensive experience in Islamic green financing. For Muslim homeowners who want complete Shariah compliance across all aspects of their solar financing, Bank Islam is the strongest choice. Read our detailed Bank Islam solar financing guide for full product details.
Best for Existing Property Homeowners: Hong Leong Bank
Hong Leong's home financing product allows you to refinance existing property equity to fund solar at home financing rates — significantly lower than personal loan rates. If your property has appreciated substantially since you bought it, this could unlock solar financing at just BR + 0.95% (approximately 3.7% p.a. in 2026).
Best for CIMB Customers: CIMB Green Personal Financing
Existing CIMB account holders benefit from faster processing times, pre-filled application forms, and relationship manager familiarity. If you already bank with CIMB, their 3.5%–4.5% green financing is a strong starting point. See our detailed CIMB solar loan guide for full documentation requirements.
Government Incentives That Work Alongside Green Loans
Malaysia's government provides several incentives that reduce the net cost of your solar installation. Understanding how these interact with your green loan is critical to maximising your financial return.
Solar ATAP (Accelerated Transition Action Programme)
Solar ATAP is a self-consumption and export credit programme that improves solar ROI:
- Export credits: Earn ~RM 0.218/kWh for excess energy exported to TNB grid
- Eligibility: All residential and commercial solar owners registered with SEDA
- Application: Handled by your SEDA-registered solar contractor
- Impact on loan: Solar ATAP bill credits reduce your monthly electricity costs. A typical 6kW system saves RM 350–500/month, which helps offset your loan repayments and makes you cashflow-positive from month one.
Read our complete Solar ATAP programme guide for full eligibility details and application process.
Solar ATAP (Net Energy Metering)
Solar ATAP is not a grant but a billing mechanism that dramatically improves solar ROI. Under Solar ATAP:
- Excess solar energy exported to the TNB grid earns a credit of RM 0.218 per kWh
- Credits offset your monthly TNB bill (up to 100% — you will never receive a cash payment, only bill offsets)
- A typical 6kW system on Solar ATAP achieves RM 350–RM 500/month in bill savings and export credits combined
- Over 10 years, Solar ATAP credits contribute RM 42,000–RM 60,000 in value to a 6kW system — far exceeding the loan cost
SEDA Registration and 10-Year Solar ATAP Contract
To access Solar ATAP, your installation must be registered with SEDA (Sustainable Energy Development Authority) and you must receive a bidirectional TNB meter. Solar ATAP contracts run for 10 years from the Commencement Date per §4.1 of GP/ST/No. 60/2025. SEDA registration is handled by your solar contractor.
Income Tax Deduction (Green Technology)
Under Malaysia's Green Technology Tax Incentive, companies (Sdn Bhd entities) that purchase and use solar systems are eligible for:
- Green Investment Tax Allowance (GITA): 100% allowance on qualifying capital expenditure against statutory income
- Green Income Tax Exemption (GITE): Exemption on statutory income for companies that generate and sell solar energy
- Applications submitted through MIDA (Malaysian Investment Development Authority)
For individual homeowners, solar installations qualify for a tax relief of up to RM 2,500 under the personal income tax relief for green technology purchases (subject to annual Budget changes).
How to Calculate Your True Cost of Solar Financing
Before choosing a bank, calculate your true cost by factoring in all financing costs against all savings and incentives:
Example: 8kW System, RM 27,000, 7-Year Loan at 4% p.a.
- System cost: RM 27,000
- Financed amount: RM 27,000
- Monthly loan payment (7 years at 4%): RM 323
- Total loan repayment over 7 years: RM 27,132
- Total interest/profit paid: RM 3,132
- Monthly electricity savings (Solar ATAP): RM 580
- Net monthly position (savings minus loan payment): +RM 257 from month 1
- Total savings over 25 years: RM 174,000 (after accounting for panel degradation)
- Net profit after full loan cost: RM 170,868
Use our solar savings calculator to run these numbers for your specific property, system size, and current TNB bill.
Step-by-Step: How to Apply for a Green Loan in Malaysia
Step 1: Determine Your System Size and Budget
Start with a professional solar assessment. Use our calculator to estimate system size based on your monthly TNB bill. For most Malaysian landed homes, a 6kW–12kW system delivers the best return. For commercial premises, book the RM100 priority site visit, fully credited when you proceed — system sizing depends on available roof space, shadow analysis, and peak demand profile.
Step 2: Obtain a Bankable Solar Quotation
Get a written quotation from a SEDA-registered solar contractor. The quotation must include: system size (kWp), panel and inverter specifications with model numbers, installation scope, total price, warranty terms, SEDA application assistance, and TNB meter coordination. Request a Trexon quote — our proposals are specifically formatted to meet bank financing requirements.
Step 3: Compare Green Loan Options
Use the comparison table above to shortlist 2–3 banks. Consider: current account relationship (existing customers get faster processing); whether you need Islamic financing; whether you qualify for LCTF (SME, 2+ years operating); and whether you have property equity to unlock lower home financing rates. Use our financing comparison tool for personalised estimates.
Step 4: Run Your Credit Check
Obtain a free CCRIS report from BNM's eCCRIS portal. Obtain a CTOS report (RM 25.90). Calculate your current Debt Service Ratio (total monthly loan commitments ÷ gross monthly income). Most banks require DSR below 60%–70%. If your DSR is above 65%, consider a joint application with a co-borrower or reduce the financed amount using cash savings.
Step 5: Prepare Your Documents
Standard documents for all banks:
- NRIC (colour copy)
- Latest 3 months' salary slips or 6 months' bank statements (self-employed)
- Latest income tax return with LHDN acknowledgement
- Solar system quotation from SEDA-registered contractor
- TNB bill for installation address
- For SME: SSM registration, 2 years audited accounts, director's NRIC and CCRIS
Step 6: Submit Applications Simultaneously (Compare Offers)
There is no penalty for applying to multiple banks simultaneously. A hard CCRIS inquiry from a bank has only a minor short-term impact on credit scoring. Submit applications to your top 2–3 choices and compare the actual Letter of Offer terms — the quoted rate and the offered rate sometimes differ.
Step 7: Accept the Best Offer and Proceed to Installation
Once you accept a Letter of Offer, the bank disburses funds (typically 5–10 working days). Your solar contractor then schedules installation. Most residential systems are physically installed in 1–3 days. SEDA and TNB meter commissioning follows in 3–6 weeks.
Common Mistakes to Avoid with Green Loans for Solar
- Not asking for GTFS/LCTF specifically: Bank staff sometimes offer standard personal loans rather than green products unless you ask. Always mention "Green Technology Financing Scheme" or "Low Carbon Transition Facility" explicitly.
- Comparing flat rates, not effective rates: A 3.5% flat rate is not the same as a 3.5% effective annual rate (EAR). Always ask for the EAR or compare using the ELR (Effective Lending Rate) disclosed in the Loan/Financing Offer Letter.
- Not factoring Solar ATAP credits into cashflow: Solar ATAP export credits start earning from the day your system is connected and the bidirectional meter is installed. Factor these monthly savings into your cashflow planning alongside your loan repayments.
- Choosing the cheapest contractor to reduce loan amount: The cheapest quote often means lower panel quality, shorter warranties, or an unregistered contractor. A contractor who cannot complete SEDA registration leaves you unable to access Solar ATAP — eliminating the primary financial benefit of going solar.
- Not checking LCTF availability: LCTF is a finite pool. Call your bank before applying to confirm LCTF funds are still available in 2026.
Frequently Asked Questions: Green Loans for Solar Malaysia
Can I use a green loan to add a battery to an existing solar system?
Yes. Battery storage systems (lithium-ion, LFP) qualify as green technology under BNM's CCPT framework. Most banks will finance battery additions as a standalone green loan or as an addition to an existing solar loan top-up. Minimum loan amounts (typically RM 5,000–RM 10,000) apply.
Is there a minimum solar system size for green loans?
Banks do not impose a minimum system size directly. However, minimum loan amounts (RM 5,000–RM 10,000 depending on the bank) mean that very small systems (1kW–2kW costing RM 4,500–RM 8,500) may not qualify or may require topping up to the minimum. A 3kW system at RM 12,000–RM 14,000 comfortably meets most minimum thresholds.
Will solar increase my property value and affect my green loan eligibility?
Research from Malaysia's property market shows solar installations add 2%–5% to residential property valuations. This can increase your available equity for home equity-based green loans. However, a solar installation alone will not trigger a bank-initiated property revaluation — you would need to request a revaluation if you want to capitalise on this.
Can foreign nationals or permanent residents apply for green loans in Malaysia?
Permanent Residents (PR) are eligible for most green loan products, subject to the same income and credit criteria as Malaysian citizens. Work permit holders (Employment Pass) are generally not eligible for unsecured personal financing. Some banks offer secured financing (with property collateral) to EP holders on a case-by-case basis.
Take the Next Step: Get a Free Green Loan-Ready Solar Quote
Understanding green loans is step one. The next step is knowing exactly how much your system will cost and how much you will save — so you can approach your bank with confidence.
Trexon prepares complete solar proposals that include: system design, component specifications, generation estimates, savings projections, Solar ATAP export credit estimates, and full financial analysis. Our proposals are accepted by all major Malaysian banks without additional technical queries.
Browse our solar packages to find the right system for your property, use our savings calculator to model your returns, or go straight to our financing page to compare bank options.
Ready to start? Request your free solar quote from Trexon today. Our consultants will assess your property, recommend the optimal system size, and guide you through the green loan application process — from first call to TNB meter commissioning.