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Investment Analysis 2026

Solar Panel ROI Malaysia 2026:
Is It Really Worth It? (We Do The Math)

The honest, number-by-number breakdown of solar panel return on investment in Malaysia — including payback period, IRR, NPV, 25-year savings, and how it compares to FD, ASB, REITs and stocks.

14 min readBy Chandra Rau, CEO, Trexon Energy · SEDA-registered InstallerUpdated 2026

The Bottom Line: Quick Answer

Before we get into the full analysis — here are the headline numbers for Malaysia 2026.

5–7 yrs
Residential Payback
RM300–600 bills
~6.4 yrs
Commercial Payback
MV General, no GITA
2.5–3.8×
25-Year Return
your investment
9–18%
Effective IRR
no tarif rise

"Solar is a long-term investment driven by sunlight, not market performance — with returns shown here on the Trexon RP4 savings basis."

— Chandra Rau, Trexon Energy

How to Calculate Solar ROI

Three metrics every solar buyer should understand before signing a contract.

01

Simple Payback Period

Payback = System Cost ÷ Annual Savings

The simplest metric. If your 6.20 kWp system costs RM16,999 and saves about RM230/month (RM2,760/year), your payback is 16,999 ÷ 2,760 = 6.2 years. Limitation: ignores the time value of money and assumes constant savings.

02

IRR — Internal Rate of Return

IRR = Discount rate where NPV = 0

IRR is the annualised percentage return treating solar like a financial investment. Solar IRR of 15% means it's equivalent to putting your money in an instrument that compounds at 15%/year for 25 years, and the savings are not taxed. Compare it with current published FD, ASB or EPF rates.

03

NPV — Net Present Value

NPV = Sum of (Annual Savings / (1+r)^year) − System Cost

NPV discounts future savings to today's value. At a 6% discount rate, RM400 savings in Year 10 is worth only RM223 in today's money. If NPV is positive, the investment creates value above your hurdle rate. Positive NPV at 6% means solar beats the opportunity cost of investing elsewhere at 6%.

Interactive ROI Calculator

Enter your details below. Results update in real time.

6 kWp6.82 kWp20 kWp

Leave blank to use Trexon standard pricing

0%

Our tables assume 0%; set your own assumption

Jinko N-type warranty: 0.4%/year after year 1

Your ROI Dashboard

6.9 yrs
Simple Payback
12.2%
IRR
RM10K
NPV @ 6%
RM210
Monthly Savings
RM50K
25-Year Total Savings
RM32K
25-Year Net Profit

25-Year Cumulative Savings

Payback: Year 8
System cost
1
5
10
15
20
25
Post-payback savingsPre-payback savings

ROI by System Size — Malaysia 2026

Simplified estimates based on Trexon's catalogue prices, 3.5 sun-hours a day and the RP4 domestic tariff (from 1 Jul 2025), for a typical bill for each system size.

SystemCost (RM)Monthly SavingsPayback25-yr ReturnIRR
5.58 kWp (RM200 bill)RM15,999RM143/mo9.3 yrsRM39,4809%
5.58 kWp (RM300 bill)RM15,999RM184/mo7.2 yrsRM44,76012%
6.20 kWp (RM400 bill)RM16,999RM230/mo6.2 yrsRM56,40015%
7.44 kWp (RM500 bill)RM17,999RM291/mo5.2 yrsRM69,12018%
8.68 kWp (RM600 bill)RM21,999RM346/mo5.3 yrsRM81,12017%

* Estimates on the RP4 domestic tariff (from 1 Jul 2025), before AFA, the 1.6% RE Fund and service tax; Solis catalogue prices; 3.5 sun-hours a day; about 40% of solar used at home and the rest exported and credited at the 27.03 sen Energy Charge (capped at what you import) for 10 years (the Solar ATAP term); typical bills of RM200, RM300, RM400, RM500 and RM600; no tariff increase or degradation.

6 Factors That Affect Your Solar ROI

The numbers above are benchmarks. Your actual ROI depends on these six variables.

Electricity Tariff Rate

Higher monthly bills = faster payback. A household paying RM500/month benefits far more than one paying RM150/month. Under the RP4 tariff each kWh you no longer buy saves 44.43 sen (54.43 sen above 1,500 kWh a month), and lower grid use can move you into a higher Energy Efficiency Incentive band.

High impact

System Size vs Consumption Match

Oversizing your system (generating more than you consume) wastes potential savings — excess power is exported at the Energy Charge (27.03 sen/kWh) and any credit left at the end of the billing period is forfeited. The optimal system size covers 80–100% of daytime consumption.

High impact

Roof Orientation & Shading

South-facing roofs in Malaysia capture the most solar energy (100%), then east (about 93%) and west (about 91%); north is about 87%. Heavy shading from trees or buildings can reduce output by 20–40%.

Medium impact

Financing Method

Cash purchase delivers the highest lifetime ROI. A 0% card instalment of up to 24 months is effectively zero-interest (same ROI as cash). Bank loans and BNPL add interest, which reduces net profit; check the lender's current rate.

High impact

Tariff Changes

RP4 base rates apply from 1 Jul 2025 to 31 Dec 2027, and the fuel surcharge (AFA) changes monthly. Our tables assume no tariff increase. If tariffs rise, every kWh of solar saves more and payback shortens; use the calculator slider to test it.

Medium impact

Panel Degradation Rate

The Jinko N-type panels in Trexon's packages are warranted to lose no more than 1% in year 1 and 0.4% a year after that — at least 87.4% of rated output at year 30. Older or budget panels can degrade faster. Always verify the manufacturer's linear power warranty.

Low-medium impact

Solar vs Other Malaysian Investments

Where does solar rank when compared to conventional Malaysian investment vehicles?

Fixed Deposit (FD)
2.5–3.5%
Low
ASB Dividend (unit trust; not guaranteed)
4–5%
Low
REITs
5–8%
Medium
KLCI Stocks
6–10%
High
Solar (IRR)
9–18%
Low
Key insight: Solar savings are not taxed and depend on sunlight and your own usage. Other rates shown are indicative ranges; check current published rates. Solar is illiquid: you cannot sell it like a unit trust.
InvestmentAnnual ReturnTax on ReturnsGuaranteed?Risk Level
Fixed Deposit (FD)2.5–3.5%None (exempt)Government-backedLow
ASB Dividend (unit trust; not guaranteed)4–5%None (exempt)Government-backedLow
REITs5–8%CGT may applyNoMedium
KLCI Stocks6–10%CGT may applyNoHigh
Solar (IRR)9–18%None (tax-free)No — estimate (depends on sun and usage)Low

2 Financing Scenarios Compared

The financing method you choose significantly affects your monthly cash flow — but has minimal impact on 25-year lifetime ROI.

Cash Purchase

Upfront
RM16,999
Monthly repayment
RM0 repayment
Savings Month 1
RM230
Payback
6.2 years
25-yr Net Profit
RM39,401
Fastest payback
Highest 25-yr return
No interest cost
Immediate positive cash flow
Requires upfront capital
Opportunity cost of cash

0% Card Instalment (24 months)

Upfront
RM2,000 booking
Monthly repayment
RM708/mo for 24 months
Savings Month 1
RM230
Payback
6.2 years
25-yr Net Profit
RM39,401
Start with a RM2,000 booking
No interest on the plan
Same 25-year return as cash
Affin, AmBank, HSBC, RHB, Standard Chartered, Alliance, OCBC, UOB
Instalment is higher than the saving for 24 months
Needs enough credit card limit
Missed payments incur card charges

Illustrative ROI: 2 Malaysian Scenarios (Not Trexon Projects)

Illustrative scenario 1 — not a Trexon project
Double-storey terrace house, RM400 TNB bill
System
6.20 kWp
Financing
0% card instalment (24 months)
Before (TNB bill)
RM400/month
After (TNB bill)
~RM170/month
Monthly Savings
~RM230/month
Payback Period
~6.2 years
25-Year Total Return
~RM56,400

Estimates on RP4 domestic tariffs with no tariff increase; not a guarantee.

Illustrative scenario 2 — not a Trexon project
Bungalow, 1,500 kWh a month (~RM711 bill)
System
9.92 kWp
Financing
Cash purchase
Before (TNB bill)
~RM711/month
After (TNB bill)
~RM337/month
Monthly Savings
~RM374/month
Payback Period
~5.3 years
25-Year Total Return
~RM82,320

Estimates on RP4 domestic tariffs with no tariff increase; not a guarantee.

Frequently Asked Questions

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Stepping-stone path leading up to a house with solar panels