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Finance10 min read

TNB Tariff Increase 2026: What RP4 Changed — And Why Solar Still Pays

TE
Trexon Energy
Solar Advisory
5 March 2026
Trexon Energy profile photo - Solar Advisory
· Solar Advisory·

Search for "TNB tariff increase 2026" and you will read that every bill went up by 14%. For most homes that is not what happened. On 1 July 2025 TNB moved to a new tariff for the regulatory period to 31 December 2027, known as RP4. It split the bill into separate charges, added an Energy Efficiency Incentive for lower-use homes, replaced the old six-monthly ICPT with a monthly Automatic Fuel Adjustment (AFA) and opened a Time-of-Use option. For a home using 450 kWh a month, the base bill went down. This guide shows what changed, who pays more, and why solar still pays under the new tariff.

What Changed on 1 July 2025 (RP4)

  • Unbundled charges: the bill now shows an Energy charge, a Capacity charge, a Network charge and a Retail charge instead of one block rate.
  • Energy Efficiency Incentive (EEI): homes using up to 1,000 kWh a month get a per-kWh deduction. The lower your use, the bigger the deduction per kWh.
  • AFA every month: the Automatic Fuel Adjustment replaced the ICPT. It is set monthly from fuel prices and exchange rates, as determined by the Energy Commission.
  • Time-of-Use (ToU) option: homes can choose a ToU tariff with a cheaper off-peak rate. Peak is 2 pm–10 pm, Monday to Friday.
  • Service tax and RE Fund: 8% service tax applies only to homes using more than 800 kWh a month. The 1.6% RE Fund applies to all customers except homes using 300 kWh or less.

New TNB Tariff Breakdown: 2026 Rates

Domestic (Residential) Tariffs

Since 1 July 2025, domestic customers are billed under the RP4 Domestic General tariff. The old block rates (21.8, 33.4, 51.6, 54.6 and 57.1 sen/kWh) applied until June 2025 and are no longer current.

Component Before 1 Jul 2025 From 1 Jul 2025 (RP4)
Energy Charge21.8–57.1 sen/kWh (block rates)27.03 sen/kWh up to 1,500 kWh/month; 37.03 sen/kWh for all kWh above 1,500
Capacity Charge—4.55 sen/kWh
Network Charge—12.85 sen/kWh
Retail Charge—RM10/month (waived at up to 800 kWh/month until 31 Dec 2026)
Energy Efficiency Incentive—Deducted for up to 1,000 kWh/month (25.0 sen/kWh at 1–200 kWh, tapering to 0.5 sen/kWh at 901–1,000 kWh)
Time-of-Use option—Energy 28.52 sen peak / 24.43 sen off-peak (up to 1,500 kWh/month)

Who Pays More and Who Pays Less?

Comparing the base charges only (before AFA, RE Fund and service tax), most homes pay slightly less under RP4 than under the old blocks:

Monthly use Old block tariff RP4 (from 1 Jul 2025) Difference
300 kWhRM 77.00RM 65.79−RM 11.21
600 kWhRM 231.80RM 212.58−RM 19.22
900 kWhRM 395.60RM 400.87+RM 5.27
1,500 kWhRM 738.20RM 676.45−RM 61.75
2,000 kWhRM 1,023.70RM 1,098.60+RM 74.90

Bills rise for very high users because 37.03 sen applies to every kWh once use passes 1,500 kWh a month. Homes above 800 kWh also pay the 8% service tax, and the AFA can add to any bill that is not exempt. So the honest answer to "how much more do I pay?" is: it depends on your usage and on the AFA each month, not on a fixed 14% rise.

Residential Example: 450 kWh/Month Usage

Bill Component Before 1 Jul 2025 (block tariff) From 1 Jul 2025 (RP4) Change
Energy chargeRM 154.40 (200 × 21.8 + 100 × 33.4 + 150 × 51.6 sen)RM 121.64 (450 × 27.03 sen)—
Capacity + Network charges—RM 78.30 (450 × 17.40 sen)—
Energy Efficiency Incentive—−RM 65.25 (450 × 14.5 sen)—
Total Monthly Bill (estimate)RM 154.40RM 134.69−RM 19.71 (−12.8%)

Commercial & Industrial Tariffs (old B/C1/C2/D/E1/E2 → Low, Medium and High Voltage)

The old tariff names (B, C1, C2, D, E1, E2, E3) no longer exist. Businesses are now billed as Non-Domestic Low Voltage, Medium Voltage (MV) or High Voltage, each with a General or ToU option.

Tariff (from 1 Jul 2025) Energy charge Maximum Demand (MD) charge Retail charge
Low Voltage General27.03 sen/kWh, plus capacity 8.83 sen and network 14.82 sen (50.68 sen/kWh in total)—Monthly retail charge
MV General29.83 sen/kWhRM 89.27/kW (capacity RM 29.43 + network RM 59.84)RM 200/month
MV Time of Use31.32 sen peak / 27.23 sen off-peakRM 97.06/kW (peak-period MD)RM 200/month

Do not compare the old MD rate with the new one on its own. Under RP4 the network cost moved out of the energy charge and into the MD charge, so the MD line went up while the energy line went down. Compare your whole bill for the same month before and after July 2025.

Industrial Example: Food Factory, 85,000 kWh/Month, 350kW Peak Demand (MV General)

Bill Component Calculation RP4 amount
Energy charge85,000 kWh × 29.83 senRM 25,355.50
MD charge350 kW × RM 89.27RM 31,244.50
Retail chargeFixedRM 200.00
Total before AFA and RE Fund—RM 56,800.00

The 8% service tax applies only to domestic customers using more than 800 kWh a month, so it is not charged on non-domestic bills. The 1.6% RE Fund and the monthly AFA are added on top.

Why Solar Still Pays Under RP4

For Homes

Every kWh of solar you use at home is a kWh you do not buy. Under RP4 it avoids the energy, capacity and network charges: 44.43 sen/kWh (27.03 + 4.55 + 12.85), plus the AFA when it applies to your account. Solar you export earns a Solar ATAP credit at the Energy Charge, 27.03 sen/kWh. Unused export credit is forfeited at the end of each billing period, so the system should be sized to your own use. Using less grid power can also move you into a higher EEI band, which the estimates below include.

Monthly bill System (Solis inverter) Estimated saving Estimated new bill Simple payback
RM 300 (about 739 kWh)5.58 kWp, RM 15,999about RM 184/monthabout RM 116about 7.2 years
RM 500 (about 998 kWh)7.44 kWp, RM 17,999about RM 291/monthabout RM 209about 5.2 years

Estimate on the RP4 domestic tariff (from 1 Jul 2025), before AFA, the 1.6% RE Fund and service tax; 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 under Solar ATAP; no tariff increases. Your bill and roof will change the figures.

For Businesses

A 200 kWp system generates about 252,000 kWh a year (3.5 sun-hours a day). If all of it is used on site under MV General, it avoids about RM 75,200 a year in energy charges (29.83 sen/kWh). At RM 2,400/kWp (RM 480,000 + SST), simple payback is about 6.4 years. GITA Asset gives an allowance of 60% of qualifying capex, set off against up to 70% of statutory income; at the 24% tax rate that is worth up to RM 69,120 once fully used, which brings payback to about 5.5 years. The system must be commissioned and the MGTC application submitted by 31 December 2026, subject to MGTC verification. On the Low Voltage tariff (50.68 sen/kWh) the same system avoids about RM 127,700 a year, a payback of about 3.8 years.

What Solar Does Not Do: The MD Charge

The MD charge is set by your highest 30-minute demand in the month. One cloudy half-hour during your peak load is enough to set that month's MD, so solar on its own does not reliably reduce it. The figures above count no MD saving. Cutting MD needs load management or a battery energy storage system, which is a separate design.

Will TNB Tariffs Increase Further?

The RP4 base rates apply for the regulatory period from 1 July 2025 to 31 December 2027. What changes every month is the AFA:

  • October 2026: +3.61 sen/kWh
  • TNB forecast: November 2026 +4.27 sen, December 2026 +4.46 sen, January 2027 +7.59 sen
  • Homes using up to 800 kWh a month are exempt from the AFA until 31 December 2026

We do not predict tariffs. What solar changes is how many kWh you buy, whatever the rate turns out to be.

Calculate Your Solar Savings

The fastest way to understand your exact savings is to use our Trexon Solar Savings Calculator. Input your monthly TNB bill, select your tariff category, and get an estimate of:

  • Recommended system size for your consumption
  • Monthly bill reduction with solar
  • Payback period under current tariff rates
  • Long-term savings

For businesses, send 12 months of TNB bills, a roof plan, the single-line diagram and a meter photo, and we will build a site-specific model, including the GITA Asset estimate and financing options.

RP4 is already in effect. Calculate your savings now and get a free quote based on your own bill.

See your estimated savings

Get a free, no-obligation solar quote online.

Tags
#TNB Tariff#Electricity Bill#Tariff Increase#Solar Savings#MD Charge#Commercial Solar#Malaysia Energy
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TE
Trexon Energy
Solar Advisory
Solar Energy Expert
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