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B2B Energy Cost GuideTNB RP4 tariff, 2026

TNB Maximum Demand Charge: How Malaysian Factories Can Reduce MD Charges

TNB maximum-demand charges are tariff-specific and can be a major hidden cost on a factory bill. Medium voltage customers should use the rate printed on their current bill (RM89.27/kW on MV General since 1 July 2025). Learn 5 practical strategies used by Malaysian manufacturers to cut maximum demand by 15–30%.

16 min readBased on the TNB RP4 tariff schedule (1 July 2025)By Chandra Rau, CEO, Trexon Energy • SEDA-registered solar installer (RPVSP)
RM89.27*
Illustrative MV General rate
Verify against your bill
RM535K
Annual MD cost
500kW factory
20–30%
MD reduction possible
Illustrative scenario, solar + BESS
~5.5 yrs
Typical solar payback
With GITA, MV General

What Is TNB Maximum Demand (MD)?

Maximum Demand is the highest 30-minute average power draw recorded on your meter during the billing period. TNB charges you for this peak capacity reservation — regardless of whether you actually use it consistently.

Typical TNB Bill Breakdown — 500kW Factory

Maximum Demand ChargeBIGGEST LINE ITEMSee calculator*/mo
kWh Energy ChargesRM29,200/mo
Power Factor PenaltyRM6,900/mo
Taxes & LeviesRM5,160/mo

Illustrative MV General input only. Actual MD rate varies by tariff, voltage, billing schedule and power factor; verify the current bill.

30-Minute Windows

TNB averages your power draw every 30 minutes. The single highest 30-min reading each month becomes your MD.

One Spike = One Month

A single simultaneous machine startup sets your MD for 30 days — even if it never happens again that month.

Separate From kWh

MD charges are capacity reservation fees — you pay them regardless of actual energy consumed that month.

Interactive MD Cost Calculator

Enter your current Maximum Demand to see exactly what you are paying — and how much you can save.

50 kW2,000 kW
Monthly MD Cost
RM44,635
Annual MD Cost
RM535,620
Monthly Savings
RM8,927
Annual Savings
RM107,124

Illustrative only — enter the MD rate shown on your current TNB bill

Example: model a 500kW factory using its current tariff bill

The annual result depends on the tariff-specific RM/kW rate and interval data. Treat any saving as a modeled scenario until the bill and load profile are checked.

5 Practical MD Reduction Strategies for Malaysian Factories

These strategies are ranked from lowest cost to highest ROI. Implement them in order for the fastest payback.

Strategy 1

Load Staggering

Sequence machine startups over 5–10 minute intervals instead of simultaneous starts. One production line firing up all motors at once can spike your MD for the entire month. This is the highest-leverage, zero-cost intervention available to any factory.

Investment
RM0 — process change only
MD Savings
5–10% MD reduction
Payback
Immediate
Strategy 2

Power Factor Correction

Install automatic capacitor banks at your main distribution board to bring power factor above 0.95. Poor PF inflates your apparent (kVA) demand and current, and TNB charges a separate power factor penalty below 0.85. The MD charge itself is based on kW, so PF correction mainly removes the penalty.

Investment
RM15,000–40,000
MD Savings
Removes the PF penalty
Payback
12–24 months
Strategy 3

Variable Speed Drives (VSD/VFD)

Install VSD on your largest motor loads: HVAC fans, compressors, conveyor belts, and pumps. A VSD reduces motor startup inrush current from 6–8x rated to 1.5x rated, directly cutting your MD spike. VSD also save 20–40% on motor energy consumption.

Investment
RM5,000–20,000 per motor
MD Savings
10–20% MD reduction
Payback
18–36 months
Strategy 4

Solar Peak Shaving

A rooftop solar system generates power during daylight hours (9am–4pm), offsetting your grid draw during production. But MD is set by the single highest 30-minute window in the month, so one cloudy half-hour can erase the reduction: solar alone does not reliably cut MD. Its main saving is on energy (kWh) charges; pair it with BESS to target MD.

Investment
~RM2,400/kWp (before SST)
MD Savings
Energy (kWh) savings; MD cut needs BESS
Payback
~6.4 years (~5.5 with GITA), MV General
Strategy 5

BESS Peak Shaving

Battery Energy Storage Systems charge during off-peak hours (11pm–7am) at cheaper off-peak tariff rates and discharge during your peak demand window. Unlike solar, BESS works regardless of weather and can be programmed to target your specific MD spike times; response time is confirmed in the system design.

Investment
RM80,000–500,000
MD Savings
15–30% MD reduction
Payback
Site-specific; GITA Tier 1 (100%)
StrategyMD SavingCostPayback
Load Staggering5–10%RM0Immediate
Power Factor CorrectionPenalty onlyRM15K–40K12–24mo
VSD on Motors10–20%RM5K–20K/motor18–36mo
Solar Peak ShavingNot reliable alone~RM2,400/kWp~6.4yr
BESS Peak Shaving15–30%RM80K–500KSite-specific

Before vs After: 24-Hour Factory Load Profile

This chart shows how solar + BESS peak shaving flattens a typical Selangor factory load curve. The red dotted line is the old MD peak. The green bars show the new reduced demand profile.

Without Solar+BESSWith Solar+BESSSolar window (8am–4pm)
750kW600kW450kW300kW150kW0
Old MD peak
12a
2a
4a
6a
8a
10a
12p
2p
4p
6p
8p
10p

Solar peak shaving zone (8am–4pm): average demand reduced from 88% to 62% of installed capacity — a sustained 30% MD reduction during the critical billing window.

GITA Tax Treatment for BESS: 100% Allowance (Tier 1)

BESS is a GITA Asset Tier 1 item: an allowance of 100% of qualifying capex, set off against up to 70% of statutory income each year. Solar PV is Tier 2 (60%). Commission the system and submit the application to MGTC by 31 December 2026. Subject to MGTC verification; confirm the tax treatment with your adviser.

1

Check GITA eligibility

Confirm the applicable GITA Asset category, certification and application route with MGTC and your tax adviser

2

Offset 70% Income

Apply the ITA against up to 70% of your company statutory income each year until the allowance is fully utilised

3

Model the tax treatment

An allowance percentage is not a cash-cost reduction. Model utilisation, statutory income, tax rate and timing with your tax adviser.

Example: RM200,000 BESS investment

Gross BESS investmentRM200,000
GITA Asset Tier 1 allowance (100%)RM200,000 allowance
Tax saving at 24% rateUp to RM48,000
Net effective investmentRM152,000

How Trexon Helps You Reduce MD

Trexon delivers an integrated solar + BESS + energy efficiency solution specifically engineered for maximum demand reduction at Malaysian factories.

MD Baseline Review

As part of your free quote, we review 12 months of TNB bills to identify your MD pattern, peak hours, and quick wins that need no capital.

Solar System Design

Rooftop solar sized to your daytime load, cutting energy (kWh) charges during your production hours.

BESS Peak Shaving

LFP battery systems with automatic demand limiting that targets your MD peak windows.

Power Factor Correction

Automatic capacitor banks that maintain PF above 0.95, eliminating power factor penalties and reducing kVA and losses.

Real-Time Monitoring

Live demand, solar output, and BESS state-of-charge — visible in the supplier's monitoring portal.

GITA Application Support

Our team can help prepare the evidence pack; MGTC and your tax adviser must confirm eligibility and the current application route.

Frequently Asked Questions

Ready to Cut Your MD Charges?

Get a free quote from Trexon. Send 12 months of TNB bills and we calculate your savings potential before any commitment.

Outdoor transformer substation at a factory with a solar roof behind