Your TNB electricity bill just got permanently more expensive. The 14.2% tariff increase implemented in 2025 as part of Malaysia's electricity market restructuring is not a temporary adjustment — it is the new baseline. And with further incremental increases expected through 2027, every Malaysian homeowner and business owner needs a plan. Solar is the most effective hedge against rising electricity costs available today.
What Changed: The 2025 TNB Tariff Restructuring
Malaysia's Energy Commission (Suruhanjaya Tenaga) implemented the new Incentive-Based Regulation (IBR) tariff structure in 2025. The restructuring was driven by two forces: the removal of electricity subsidies for non-household users, and the introduction of an unbundled tariff system that separates generation, transmission, and distribution costs.
The headline figure: a 14.2% average increase across commercial and industrial tariff categories. But the real impact varies significantly by user type and consumption pattern.
New TNB Tariff Breakdown: 2026 Rates
Domestic (Residential) Tariffs
Residential tariffs use a progressive block structure. The increases are modest for lower-consumption households but steeper for heavy users.
| Consumption Block | Old Rate (2024) | New Rate (2025–2026) | Change |
|---|---|---|---|
| First 200 kWh/month | 21.8 sen/kWh | 23.5 sen/kWh | +7.8% |
| 201–300 kWh/month | 33.4 sen/kWh | 37.2 sen/kWh | +11.4% |
| 301–600 kWh/month | 51.6 sen/kWh | 58.9 sen/kWh | +14.1% |
| 601–900 kWh/month | 54.6 sen/kWh | 62.5 sen/kWh | +14.5% |
| Above 900 kWh/month | 57.1 sen/kWh | 65.5 sen/kWh | +14.7% |
Commercial Tariffs (Tariff C1, C2)
Commercial users face both energy charge increases and a restructured Demand (MD) charge — the latter being the most significant change for any business with large loads.
| Tariff Component | Old Rate (2024) | New Rate (2026) | Change |
|---|---|---|---|
| Energy Charge (C1) | 43.5 sen/kWh | 49.7 sen/kWh | +14.3% |
| MD Demand Charge (C1) | RM 30.30/kW | RM 37.85/kW | +24.9% |
| Energy Charge (C2 — MV) | 36.2 sen/kWh | 41.0 sen/kWh | +13.3% |
| MD Demand Charge (MV/HV) | RM 71.60/kW | RM 89.27/kW | +24.7% |
The MD (Maximum Demand) charge at RM 89.27/kW for medium voltage users is the single largest bill driver for most Malaysian factories. This is the charge billed on your peak demand moment each month — not your total consumption. Solar panels generate during the day, directly reducing your peak demand window and cutting this charge dramatically.
Before and After: Bill Impact by Customer Type
Residential Example: 450 kWh/Month Usage
| Bill Component | Before (2024) | After (2026) | Monthly Increase |
|---|---|---|---|
| First 200 kWh | RM 43.60 | RM 47.00 | +RM 3.40 |
| Next 100 kWh (201–300) | RM 33.40 | RM 37.20 | +RM 3.80 |
| Next 150 kWh (301–450) | RM 77.40 | RM 88.35 | +RM 10.95 |
| Total Monthly Bill | RM 154.40 | RM 172.55 | +RM 18.15 (+11.8%) |
Commercial Example: Shoplot, 3,500 kWh/Month, 18kW Peak Demand
| Bill Component | Before (2024) | After (2026) | Monthly Increase |
|---|---|---|---|
| Energy charge | RM 1,522.50 | RM 1,739.50 | +RM 217 |
| MD charge (18kW) | RM 545.40 | RM 681.30 | +RM 135.90 |
| Service charge | RM 7.20 | RM 7.20 | — |
| Total Monthly Bill | RM 2,075 | RM 2,428 | +RM 353 (+17%) |
Industrial Example: Food Factory, 85,000 kWh/Month, 350kW Peak Demand
| Bill Component | Before (2024) | After (2026) | Monthly Increase |
|---|---|---|---|
| Energy charge (MV rate) | RM 30,770 | RM 34,850 | +RM 4,080 |
| MD charge (350kW × rate) | RM 25,060 | RM 31,245 | +RM 6,185 |
| Other charges | RM 1,200 | RM 1,200 | — |
| Total Monthly Bill | RM 57,030 | RM 67,295 | +RM 10,265 (+18%) |
For that food factory, the tariff increase alone costs RM 123,180 per year more than in 2024. A well-sized solar installation at that factory would cost approximately RM 1.2M–1.8M — and pay for itself in under 4 years factoring in the MD charge reduction.
How Solar Cuts Both Energy and MD Charges
Most people understand that solar reduces your kWh consumption from TNB. Fewer understand the MD charge mechanism — and it is where the biggest savings live for commercial users.
Reducing Energy Charges
Solar panels generate electricity during daylight hours (roughly 7am–6pm in Malaysia, peak production 9am–3pm). This is precisely when most businesses run at full load. A 200kW system generating 800–1,000 kWh/day directly offsets grid consumption during the most expensive peak hours.
Reducing MD Charges
The MD charge is calculated based on your highest 30-minute peak demand reading in the billing month, measured in kW. If your factory's highest peak is 350kW and solar is simultaneously generating 150kW, your effective peak demand drops to 200kW. This is a reduction of 150kW × RM 89.27 = RM 13,390 per month off the MD charge alone.
This is why solar payback periods for commercial users in Malaysia are often 3–5 years — significantly faster than residential. See our B2B solar case studies for industry-specific ROI data.
Will TNB Tariffs Increase Further?
The Energy Commission's IBR framework is designed to allow periodic tariff adjustments aligned with actual cost of electricity supply. Under the NETR roadmap, Malaysia is transitioning toward market-based electricity pricing through 2030. This means:
- Subsidies for commercial and industrial users will continue to be reduced
- Fuel cost pass-through mechanisms will adjust rates quarterly based on gas and coal prices
- The Imbalance Cost Pass-Through (ICPT) surcharge can add or reduce bills by 3–7% each 6-month review period
The direction of travel is clear: grid electricity costs in Malaysia are rising, structurally, over the medium term. Solar locks in your cost of electricity generation at today's rates for 25+ years.
Calculate Your Solar Hedge
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 instant projection of:
- Recommended system size for your consumption
- Monthly bill reduction with solar
- MD charge reduction (commercial users)
- Payback period under current tariff rates
- 25-year cumulative savings
For businesses with TNB bills above RM 10,000/month, a dedicated assessment from Trexon's commercial team will provide even more precise modelling — including GITA tax deduction analysis and financing options that make solar cashflow-positive from Month 1.
The tariff increase is already in effect. Every month you stay on the grid without solar, you pay the new, higher rates. Calculate your savings now and stop subsidising TNB when you could be generating your own power.