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Energy Cost GuideUpdated October 2026

ICPT and AFA Malaysia 2026: The Fuel Adjustment on Your TNB Bill (And How Solar Reduces It)

Since July 2025 the ICPT has been replaced by the Automatic Fuel Adjustment (AFA), set monthly from fuel prices and exchange rates as determined by the Energy Commission. In October 2026 the AFA is +3.61 sen/kWh, and TNB forecasts +4.27 (November), +4.46 (December) and +7.59 (January 2027). Domestic customers using up to 800 kWh a month are exempt until 31 December 2026. Here is what that means and how solar reduces it.

14 min readBy Chandra Rau, CEO, Trexon EnergyBased on TNB AFA data (October 2026)

Current AFA (Oct 2026)

+3.61 sen/kWh

Replaced the ICPT in July 2025

Domestic Exemption

≤800 kWh

Until 31 Dec 2026

TNB Forecast (Jan 2027)

+7.59 sen/kWh

Monthly reset

Solar AFA Cost

RM0

Per solar kWh

What Are ICPT and AFA?

ICPT (Imbalance Cost Pass-Through) was the mechanism that passed fuel cost variances to consumers under the Incentive Based Regulation (IBR) framework. Since July 2025 it has been replaced by the Automatic Fuel Adjustment (AFA), which does the same job on a monthly basis.

Set monthly from fuel prices and exchange rates, as determined by the Energy Commission (Suruhanjaya Tenaga)

Can rise or fall from month to month as fuel prices and exchange rates move

Charged per kWh; domestic customers using up to 800 kWh a month are exempt until 31 December 2026

October 2026: +3.61 sen/kWh (TNB forecast: November +4.27, December +4.46, January 2027 +7.59)

Simple Example: How the AFA Adds to Your Bill

You use 1,000 kWh in October 2026. Your bill includes:

Energy + Capacity + Network (1,000 kWh × 44.43 sen)RM444.30
Energy Efficiency Incentive (1,000 kWh × 0.5 sen)- RM5.00
Retail Charge+ RM10.00
AFA (1,000 kWh × 3.61 sen)+ RM36.10
Total (before RE Fund and service tax)RM485.40

The AFA is about 7.4% of this bill.

AFA Cost Calculator

Enter your monthly electricity consumption to see how much the AFA adds to your bill — and how much solar would save.

502,000 kWh
10%100%

Monthly AFA Cost

RM32.49

Annual AFA Cost

RM389.88

25-Year AFA Cost (illustrative)

RM14,214.74

Annual AFA Saving with Solar

RM272.92

Based on an AFA of 3.61 sen/kWh (October 2026). The 25-year figure assumes a 3% annual increase, which is an assumption, not a forecast. Domestic customers up to 800 kWh a month are exempt until 31 December 2026.

Why the AFA Moves Month to Month

Because the AFA is reset every month from fuel prices and exchange rates, your effective rate per kWh can change from month to month.

Fuel prices and exchange rates

Monthly
AFA reset

The AFA is set monthly from fuel prices and exchange rates, as determined by the Energy Commission. In October 2026 it is +3.61 sen/kWh.

TNB's forecast

+7.59
sen/kWh, Jan 2027 forecast

TNB forecasts +4.27 sen/kWh for November 2026, +4.46 for December and +7.59 for January 2027.

The exemption ends on 31 December 2026

31 Dec
2026 exemption ends

Domestic customers using up to 800 kWh a month are exempt from the AFA only until 31 December 2026.

How Solar Reduces Your AFA Cost

Every kilowatt-hour your solar panels generate is a kilowatt-hour you do not buy from TNB, which means no AFA on that energy. Where the AFA applies, solar saves you the base rates plus the AFA.

True Value of Each Solar kWh

ComponentRate (sen/kWh)What Solar Does
Energy + Capacity + Network (domestic, up to 1,500 kWh/month)44.43Fully displaced
AFA (October 2026)3.61Fully displaced (where the AFA applies)
Total Displacement Value48.04About 8% MORE than the base rates alone

Where the AFA applies, it adds about 8% to the avoided cost of every solar kWh.

Without Solar

  • •Pay the AFA on every kWh bought from the grid (above the exempt threshold)
  • •AFA rises → your bill rises automatically
  • •No protection against AFA changes
  • •1,000 kWh/mo household: RM36.10/mo in AFA

With Solar

  • •No AFA on every solar kWh self-consumed
  • •AFA rises → your solar advantage grows larger
  • •Reduces your exposure to future AFA changes
  • •Example: 1,000 kWh/mo offset saves RM36.10/mo in AFA alone

25-Year Cumulative AFA Cost: With vs Without Solar (illustrative)

Illustrative: assumes the AFA stays at 3.61 sen/kWh and rises 3% a year (an assumption, not a forecast), for a 900 kWh/month household that is charged the AFA.

Year 1
RM389.88
RM116.96
Year 5
RM2,069.93
RM620.98
Year 10
RM4,469.54
RM1,340.86
Year 15
RM7,251.34
RM2,175.40
Year 20
RM10,476.22
RM3,142.87
Year 25
RM14,214.74
RM4,264.42
Without Solar (pays the AFA every month)
With Solar (no AFA on solar generation)

AFA for Businesses

Businesses pay the AFA on every kWh they buy from the grid, so the larger the consumption, the larger the monthly AFA bill.

Business TypeMonthly AFAAnnual AFA
Retail shop (5,000 kWh/mo)RM180.50RM2,166.00
Office building (30,000 kWh/mo)RM1,083.00RM12,996.00
Hotel (100,000 kWh/mo)RM3,610.00RM43,320.00
Factory (250,000 kWh/mo)RM9,025.00RM108,300.00
Large industrial (500,000 kWh/mo)RM18,050.00RM216,600.00

For Malaysian Manufacturers: AFA + MD Charges

Factories face both the AFA on energy consumption AND Maximum Demand charges of RM89.27/kW/month (MV General). A 500kW factory using 250,000 kWh a month may pay about RM9,025/month in AFA (250,000 × 3.61 sen) plus RM44,635/month in MD charges (500 kW × RM89.27). Solar reduces the grid energy you buy (cutting the AFA), but it does not reliably reduce MD, because one cloudy half-hour can still set the month's MD.

Frequently Asked Questions

ICPT (Imbalance Cost Pass-Through) was the mechanism TNB used to pass fuel cost variances to consumers. Since July 2025 it has been replaced by the Automatic Fuel Adjustment (AFA), which is set monthly from fuel prices and exchange rates, as determined by the Energy Commission.

Reduce Your AFA Cost. Start Generating Your Own Power.

Every kWh your solar system supplies is a kWh you do not buy from TNB, so you do not pay the AFA on it. Get a free quote from Trexon — we use your bill data to calculate your savings.

Padlock on a gate with a solar-roofed house behind