In January 2026, Tenaga Nasional Berhad implemented the Regulatory Period 4 (RP4) tariff revision, increasing average residential electricity rates by 13.64% — from RM 0.3995 to RM 0.4540 per kWh on a consumption-weighted basis. For most homeowners, this means RM 60–150 more on their monthly bill. But for solar owners and those considering solar, this change fundamentally improves the financial case for going solar.
The RP4 Tariff Structure: Full Breakdown by Block
TNB Tariff A (domestic) is a tiered block tariff — you pay different rates depending on how many kWh you consume each month. The RP4 revision widened the gap between low-consumption and high-consumption rates, making high electricity users the biggest losers on grid power and the biggest winners from solar.
| Consumption Block | Old Rate (RP3) | New Rate (RP4) | Increase | % Change |
|---|---|---|---|---|
| First 200 kWh (1–200) | RM 0.219/kWh | RM 0.244/kWh | +RM 0.025 | +11.4% |
| Next 100 kWh (201–300) | RM 0.334/kWh | RM 0.379/kWh | +RM 0.045 | +13.5% |
| Next 300 kWh (301–600) | RM 0.516/kWh | RM 0.589/kWh | +RM 0.073 | +14.1% |
| Next 300 kWh (601–900) | RM 0.546/kWh | RM 0.623/kWh | +RM 0.077 | +14.1% |
| Above 900 kWh | RM 0.571/kWh | RM 0.652/kWh | +RM 0.081 | +14.2% |
| Fixed Charge (per month) | RM 7.20 | RM 7.20 | RM 0 | 0% |
Source: ST (Suruhanjaya Tenaga) Tariff Determination RP4, effective January 2026. Rates shown are before-GST residential Tariff A rates.
What the Tariff Increase Means for a Typical Malaysian Household
Let us run the numbers on three common household consumption profiles to show exactly how much more you are paying under RP4.
| Household Type | Monthly kWh | Old Monthly Bill (RP3) | New Monthly Bill (RP4) | Extra Per Month | Extra Per Year |
|---|---|---|---|---|---|
| Small terrace (2 aircons) | 450 kWh | RM 168 | RM 191 | +RM 23 | +RM 276 |
| Medium semi-D (3 aircons) | 700 kWh | RM 305 | RM 348 | +RM 43 | +RM 516 |
| Large bungalow (4+ aircons) | 1,100 kWh | RM 540 | RM 616 | +RM 76 | +RM 912 |
The tariff increase hits harder for higher consumers because more of their consumption falls in the upper tiers where the absolute rate increase is largest (RM 0.081/kWh vs RM 0.025/kWh in Tier 1).
How Higher TNB Tariffs Accelerate Solar Payback
Every sen increase in TNB's tariff makes solar more valuable. Here is why: your solar system saves you money by displacing grid electricity you would otherwise buy. When grid electricity costs more, every kWh your solar panels produce is worth more to you.
Under Solar ATAP, your excess solar generation is exported back to TNB at a fixed rate (currently RM 0.218/kWh — this export rate is set separately from the retail tariff). The real savings come from self-consumption — using your own solar power instead of buying from the grid at retail rates. To understand exactly how the self-consumption-first billing model works — and how it carried over from the old NEM 3.0 scheme into today's Solar ATAP — read our NEM 3.0 to Solar ATAP guide for sizing principles. For full details on the government incentive that further cuts your upfront cost, read our Solar ATAP incentive guide.
Key Principle: Solar ROI improves every time TNB raises tariffs, because the value of each kWh your panels generate (measured in displaced grid electricity cost) increases in direct proportion to the tariff.
Before vs After ROI: 5kW System
A 5kWp solar system in Malaysia generates approximately 570–620 kWh per month (based on 4.5–4.8 peak sun hours). Assuming 60% is self-consumed and 40% is exported to TNB under Solar ATAP.
| Metric | Before RP4 (RP3 rates) | After RP4 (2026 rates) | Improvement |
|---|---|---|---|
| Monthly generation | 590 kWh | 590 kWh | — |
| Self-consumed (60%) | 354 kWh × RM 0.516 avg = RM 183 | 354 kWh × RM 0.589 avg = RM 208 | +RM 25/mo |
| Exported (40%) | 236 kWh × RM 0.218 = RM 51 | 236 kWh × RM 0.218 = RM 51 | — |
| Total monthly savings | RM 234/month | RM 259/month | +RM 25/mo |
| System cost (installed) | RM 19,000 | RM 19,000 | — |
| Payback period | 6.8 years | 6.1 years | -8 months |
| 25-year net gain | RM 51,200 | RM 58,700 | +RM 7,500 |
Before vs After ROI: 8kW System
| Metric | Before RP4 (RP3 rates) | After RP4 (2026 rates) | Improvement |
|---|---|---|---|
| Monthly generation | 944 kWh | 944 kWh | — |
| Self-consumed (60%) | 566 kWh × RM 0.546 avg = RM 309 | 566 kWh × RM 0.623 avg = RM 353 | +RM 44/mo |
| Exported (40%) | 378 kWh × RM 0.218 = RM 82 | 378 kWh × RM 0.218 = RM 82 | — |
| Total monthly savings | RM 391/month | RM 435/month | +RM 44/mo |
| System cost (installed) | RM 27,000 | RM 27,000 | — |
| Payback period | 5.8 years | 5.2 years | -7 months |
| 25-year net gain | RM 90,300 | RM 103,500 | +RM 13,200 |
Before vs After ROI: 10kW System
| Metric | Before RP4 (RP3 rates) | After RP4 (2026 rates) | Improvement |
|---|---|---|---|
| Monthly generation | 1,180 kWh | 1,180 kWh | — |
| Self-consumed (60%) | 708 kWh × RM 0.558 avg = RM 395 | 708 kWh × RM 0.637 avg = RM 451 | +RM 56/mo |
| Exported (40%) | 472 kWh × RM 0.218 = RM 103 | 472 kWh × RM 0.218 = RM 103 | — |
| Total monthly savings | RM 498/month | RM 554/month | +RM 56/mo |
| System cost (installed) | RM 32,000 | RM 32,000 | — |
| Payback period | 5.4 years | 4.8 years | -7 months |
| 25-year net gain | RM 117,400 | RM 134,200 | +RM 16,800 |
Will TNB Raise Tariffs Again?
Under the Incentive-Based Regulation (IBR) framework, Suruhanjaya Tenaga (ST) reviews tariffs every five years — the next revision (RP5) is due in 2031. However, there is also a Cost Pass-Through (CPT) mechanism that allows TNB to request fuel cost adjustments every 6 months if coal and gas prices deviate significantly from the regulated baseline.
The trajectory is clear: as Malaysia reduces its dependence on gas subsidies and coal, electricity prices will continue rising toward cost-reflective levels. Independent energy analysts project residential tariffs could reach RM 0.55–0.65 per kWh on average by 2030 — a potential further 20–40% increase from current RP4 rates.
Every future tariff increase directly improves the ROI of any solar system installed today.
How to Lock In Maximum Savings Before RP5
The best time to install solar is always before the next tariff increase — because you start displacing more expensive electricity immediately. Here is what to do now:
- Calculate your current bill baseline: Use our Solar Savings Calculator to enter your latest TNB bill and see your ROI projection at current RP4 rates.
- Size your system for future consumption: If you plan to buy an EV or add an air conditioner, size for future demand — the marginal cost per additional kWp is much lower when bundled into the initial installation.
- Understand system cost: Read our complete solar panel cost guide for Malaysia 2026 to know what a fair installed price looks like for your system size.
- Check Solar ATAP eligibility: Under Solar ATAP, you can also earn export credits for excess electricity. Understanding how this interacts with your tariff block is critical for sizing your system correctly.
The Bottom Line on TNB RP4 and Solar ROI
The 13.64% TNB tariff increase under RP4 is the single biggest positive development for solar ROI in Malaysia in the past five years. Systems that previously had a 6–7 year payback now pay back in 5–6 years. Over a 25-year system life, a 10kW system owner benefits from an additional RM 16,800 in cumulative extra savings compared to pre-RP4 projections — just from the tariff change alone, with no change in system size or cost.
If you were on the fence about solar, the 2026 tariff revision has made the decision significantly clearer. Use our calculator to see your personal numbers, or book the RM100 priority site visit, fully credited when you proceed, for an on-site assessment and quote.