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Industry Guide

LSS5: Large Scale Solar Programme Malaysia

Malaysia's fifth Large Scale Solar programme is the primary mechanism for deploying utility-scale solar. This guide covers the bidding process, eligibility requirements, and what LSS5 means for corporate renewable energy buyers.

Overview

What Is LSS5?

LSS5 is Malaysia's fifth Large Scale Solar competitive bidding programme, administered by the Energy Commission (Suruhanjaya Tenaga) under the Ministry of Energy Transition and Water Transformation (PETRA). It procures utility-scale solar power — projects larger than 1 megawatt — from independent power producers (IPPs) through a long-term Power Purchase Agreement (PPA) with Tenaga Nasional Berhad (TNB).

The LSS programme is Malaysia's primary mechanism for adding large-scale solar capacity to the national grid. Each edition of the programme allocates a fixed quota of solar capacity to be developed, with projects competing on tariff price, technical capability, and financial strength.

LSS5 represents a significant expansion in Malaysia's renewable energy ambition, aligning with the National Energy Transition Roadmap (NETR) target of 70% renewable energy capacity by 2050. Corporate buyers, in particular, benefit from LSS5 as more utility-scale solar supply creates additional options for green electricity procurement through CGPP and CRESS.

History

The LSS Programme: From LSS1 to LSS5

LSS12016354 MW

First competitive solar bidding in Malaysia. Established the framework for utility-scale solar PPAs with TNB.

LSS22017465 MW

Expanded capacity with stronger competition. Tariff rates declined significantly, demonstrating solar cost reduction.

LSS32019491 MW

Awarded in 2019; all projects are now operational (Petra, October 2025).

LSS42020823 MW

Largest LSS programme to date at time of launch. Awarded record-low solar tariffs, signalling maturity of the Malaysian solar market.

LSS520241,920 MW

Awarded in 2024; projects are at earlier stages of development. LSS6 (1,975 MW) was approved in September 2025. Capacities are awarded figures per the Ministry of Energy Transition and Water Transformation (Petra), October 2025.

Process

How LSS Bidding Works

The LSS programme uses a sealed competitive bidding process. Developers submit proposals with a proposed tariff (in RM/kWh). Lower tariffs receive higher scores, but technical and financial evaluation also forms a significant part of the assessment. The full process runs as follows:

01

Expression of Interest

Energy Commission releases an EOI notice. Interested developers submit company profiles, financial statements, and preliminary project details.

02

Request for Proposal (RFP)

Qualified applicants receive the RFP document. This contains detailed bidding requirements, tariff structure, technical specifications, and submission deadlines.

03

Technical Evaluation

Projects are assessed on site identification, land rights status, grid connection feasibility study (GCS), and technical design capability.

04

Financial Evaluation

Financial capability is assessed through audited accounts, bank statements, and letter of support from financiers. Tariff bid is evaluated against benchmark.

05

Award & PPA Execution

Successful bidders receive a Letter of Award (LOA). PPA is then negotiated with TNB and executed — typically a 21-year agreement.

06

Construction & COD

Projects must achieve Commercial Operations Date (COD) within the stipulated timeframe (typically 24–30 months from LOA). Delays may result in penalties or cancellation.

Frameworks

LSS5 vs CGPP vs CRESS

Malaysia's renewable energy supply framework for corporations involves three distinct but interconnected mechanisms. Understanding how they relate is critical for both solar developers and corporate RE buyers.

AspectLSS5CGPPCRESS
Full NameLarge Scale Solar 5Corporate Green Power ProgrammeCorporate Renewable Energy Supply Scheme
PurposeBuild utility-scale solarCorporates buy RE from IPPsCorporates buy RE through TNB
BuyerTNB (utility)Corporates directlyCorporates via TNB
SellerSolar IPP developersSolar IPPsTNB (procures from LSS)
PPA TypePhysical PPA with TNBVirtual PPA (VPPA)Power wheeling PPA
RE CertificatesNo (TNB keeps RECs)Yes (buyer gets RECs)Yes (buyer gets RECs)
Min Project SizeAbove 1 MWNot stated here; confirm with the programme operatorNo minimum stated
Best ForSolar developers / IPPsRE100 corporate targetsScope 2 reduction

Eligibility

Who Can Participate in LSS5?

Solar Developers & EPCs

Engineering, procurement, and construction companies with experience in utility-scale solar development. Must demonstrate track record of completed projects.

Independent Power Producers (IPPs)

Existing IPPs or new entrants with financial backing and energy project development experience. Can be Malaysian or foreign-owned (with Malaysian entity).

Land Owners

Land owners can participate by partnering with a solar developer. The developer handles the technical and financial aspects while the land owner contributes the site.

Financial Investors

Infrastructure funds, green bond investors, and project finance institutions frequently co-invest in LSS projects. Minimum paid-up capital and demonstrated liquidity required.

Key Requirements

  • Malaysian-incorporated company (Sdn. Bhd. or Bhd.)
  • Minimum paid-up capital as specified in RFP (typically RM 500,000 to RM 2M)
  • Proven financial capability via audited accounts and bank references
  • Land rights documentation (lease, purchase, option agreement)
  • Grid Connection Study (GCS) from TNB confirming connection feasibility
  • No adverse record with Energy Commission or other government agencies

Corporate Buyers

Impact on Corporate RE Buyers

LSS5 projects feed electricity into the national grid managed by TNB. While corporate buyers do not purchase directly from LSS projects under the LSS framework, the additional capacity created by LSS5 directly expands the supply available under CGPP (virtual PPA) and CRESS.

For multinationals with RE100 targets — committing to 100% renewable electricity — CGPP virtual PPAs backed by LSS5 supply provide a credible, verifiable path to Scope 2 emissions reduction. The Renewable Energy Certificates (RECs) issued under CGPP are recognised by major sustainability frameworks including GRI, TCFD, and CDP.

As LSS5 adds gigawatts of new solar supply over 2024–2026, CGPP tariffs are expected to remain competitive. Corporates who sign CGPP agreements early may gain price certainty, depending on the contract terms.

FAQ

Frequently Asked Questions

What is LSS5?

LSS5 is Malaysia's fifth Large Scale Solar competitive bidding programme administered by the Energy Commission (Suruhanjaya Tenaga). It procures utility-scale solar power from independent power producers (IPPs) under long-term Power Purchase Agreements (PPAs) with TNB.

What is the minimum project size for LSS?

LSS projects must be larger than 1 megawatt peak (MWp). Typical LSS project sizes range from 10MWp to 200MWp. Projects below 1MWp fall under other routes such as Solar ATAP (self-consumption; non-domestic premises capped at 100% of the site's maximum demand (MD) in kWac, with a ceiling of 1,000 kWac).

How are LSS projects selected?

LSS projects are awarded through a competitive bidding process. Developers submit bids with a proposed tariff (RM/kWh). Lower tariff bids receive higher scores. Technical capability, land rights, financial capacity, and grid connection feasibility are all evaluated.

What is the PPA duration for LSS projects?

LSS Power Purchase Agreements are typically 21 years in duration. The fixed tariff agreed at bid award is locked in for the full PPA term, providing revenue certainty for project financing.

How does LSS5 relate to CGPP and CRESS?

LSS sells electricity to TNB (the utility). CGPP and CRESS allow corporations to procure renewable energy directly. LSS projects supply electricity that flows through TNB's grid to CGPP/CRESS corporate buyers via a Virtual PPA structure.

Can foreign companies participate in LSS5?

Yes, foreign companies can participate in LSS5 as long as they incorporate a Malaysian company for the project. The bidding entity must be a registered Malaysian company with the required financial and technical capability demonstrated in the bid submission.

Solar for Your Own Premises

LSS5 bids are made by developers through the Energy Commission. If your company wants rooftop or on-site solar for its own premises under Solar ATAP, send us your bills and roof plan for a free quote.

Utility-scale solar plant with transmission pylons in the distance