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Configure solarMalaysia'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
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
First competitive solar bidding in Malaysia. Established the framework for utility-scale solar PPAs with TNB.
Expanded capacity with stronger competition. Tariff rates declined significantly, demonstrating solar cost reduction.
Included a dedicated quota for Sabah under SESB. First programme to include floating solar category.
Largest LSS programme to date at time of launch. Awarded record-low solar tariffs, signalling maturity of the Malaysian solar market.
Aligns with NETR targets. Expected to include provisions for hybrid solar-storage, floating solar, and agrivoltaics categories.
Process
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:
Energy Commission releases an EOI notice. Interested developers submit company profiles, financial statements, and preliminary project details.
Qualified applicants receive the RFP document. This contains detailed bidding requirements, tariff structure, technical specifications, and submission deadlines.
Projects are assessed on site identification, land rights status, grid connection feasibility study (GCS), and technical design capability.
Financial capability is assessed through audited accounts, bank statements, and letter of support from financiers. Tariff bid is evaluated against benchmark.
Successful bidders receive a Letter of Award (LOA). PPA is then negotiated with TNB and executed — typically a 21-year agreement.
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
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.
| Aspect | LSS5 | CGPP | CRESS |
|---|---|---|---|
| Full Name | Large Scale Solar 5 | Corporate Green Power Programme | Corporate Renewable Energy Supply Scheme |
| Purpose | Build utility-scale solar | Corporates buy RE from IPPs | Corporates buy RE through TNB |
| Buyer | TNB (utility) | Corporates directly | Corporates via TNB |
| Seller | Solar IPP developers | Solar IPPs | TNB (procures from LSS) |
| PPA Type | Physical PPA with TNB | Virtual PPA (VPPA) | Power wheeling PPA |
| RE Certificates | No (TNB keeps RECs) | Yes (buyer gets RECs) | Yes (buyer gets RECs) |
| Min Project Size | Above 1 MW | Above 3 MW supply | No minimum stated |
| Best For | Solar developers / IPPs | RE100 corporate targets | Scope 2 reduction |
Eligibility
Engineering, procurement, and construction companies with experience in utility-scale solar development. Must demonstrate track record of completed projects.
Existing IPPs or new entrants with financial backing and energy project development experience. Can be Malaysian or foreign-owned (with Malaysian entity).
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.
Infrastructure funds, green bond investors, and project finance institutions frequently co-invest in LSS projects. Minimum paid-up capital and demonstrated liquidity required.
Corporate 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 lock in CGPP agreements early benefit from price certainty for 10–21 years, protecting against future electricity price increases.
FAQ
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.
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 programmes such as NEM (Net Energy Metering) or SELCO.
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.
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.
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.
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.
Whether you're a developer pursuing an LSS5 bid or a corporate looking to procure renewable energy under CGPP or CRESS, Trexon can guide you through the process.