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Configure solarMost Malaysians overpay on their electricity bills without knowing it. This guide decodes every line item — residential tiers, commercial MD charges, the ICPT surcharge, kVARh penalty — and shows exactly how solar eliminates the most expensive components first.
By Chandra Rau, MIT • SEDA-registered energy consultant
TNB charges residential consumers on a progressive block tariff — the more you use, the higher the rate per kWh. This means your LAST kilowatt-hour costs nearly 3x more than your first. Solar eliminates the expensive top tiers first.
| Usage Block | Rate (sen/kWh) |
|---|---|
| 1 – 200 kWh | 21.80 sen |
| 201 – 300 kWh | 33.40 sen |
| 301 – 600 kWh | 51.60 sen |
| 601 – 900 kWh | 54.60 sen |
| 901+ kWh | 57.10 sen |
When your solar system generates 300 kWh/month, it offsets your top-tier consumption first — the 51.60-57.10 sen/kWh blocks. Each solar kWh you self-consume is worth 50+ sen vs. the grid's 21.80 sen for base-tier users. This is why ROI is dramatically better for heavy users.
Typical 500 kWh/month household — solar offsets top tiers first
Enter your monthly bill or kWh usage to see your tier breakdown and solar savings potential.
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Energy Charges (by tier)
Estimate based on TNB Tariff A 2026. Actual bill may vary.
Commercial consumers on medium voltage supply face a dual-component bill: energy charges (kWh) AND a Maximum Demand charge (kW). The MD charge is often larger than the energy charge for many businesses — and most owners don't notice it.
A Petaling Jaya office complex with a 200 kW maximum demand (Tariff C1) pays:MD alone: 200 kW x RM30.30 = RM6,060/month = RM72,720/yearThat is before a single kWh of energy is billed. Solar reduces grid demand during peak hours, directly shrinking the recorded MD and this monthly charge.
Full guide: How to reduce TNB MD penalty by 20%Industrial consumers face the highest tariffs in Malaysia — especially E2 factories with peak/off-peak rates. E2 facilities that run during daytime peak hours align perfectly with solar generation, making solar the highest-ROI energy intervention available.
| Tariff | MD Charge (RM/kW/mo) | Peak (sen/kWh) | Off-Peak (sen/kWh) |
|---|---|---|---|
| E1 General (MV Industrial) | 35.50 | 33.70 | N/A (flat) |
| E2 Peak/Off-Peak (MV Industrial)Best for Solar | 97.06 | 36.40 | 22.20 |
| E3 High Voltage Industrial | 80.90 | 34.80 | 21.50 |
E2 factories benefit MOST from solar because peak solar generation (9AM-4PM) coincides exactly with the expensive peak tariff window. Every solar kWh is worth the full peak rate.
Solar does not just reduce your kWh — it strategically targets every expensive component of your TNB bill. Here is the full picture.
| Bill Component | Residential | Commercial | Industrial |
|---|---|---|---|
| Energy charges (kWh) | Reduces top tiers first | Reduces peak kWh | Reduces peak kWh |
| Maximum Demand (MD) | N/A (no MD for Tariff A) | Reduces MD by 10-25% | Reduces MD by 15-30% |
| ICPT surcharge | Proportional reduction | Proportional reduction | Proportional reduction |
| kVARh reactive penalty | N/A | No direct impact | No direct impact |
| Service Tax (SST 6%) | Exempt | Reduced (lower taxable base) | Reduced (lower taxable base) |
TNB tariffs have risen steadily since 2014 as Malaysia reduces energy subsidies. With fuel costs rising and subsidy rationalisation ongoing, tariffs are expected to continue increasing. Solar locks in your energy cost for 25 years.
| Year | Base Rate (1-200 kWh) | ICPT Change |
|---|---|---|
| 2014 | 21.8 sen/kWh | +16.9% |
| 2015 | 21.8 sen/kWh | 0% |
| 2017 | 21.8 sen/kWh | 0% |
| 2019 | 21.8 sen/kWh | 0% |
| 2021 | 21.8 sen/kWh | 0% |
| 2023 | 21.8 sen/kWh | +ICPT |
| 2024 | 21.8 sen/kWh | +ICPT |
| 2025 | 21.8 sen/kWh | +ICPT |
| 2026NOW | 21.8 sen/kWh | +ICPT 3.70 |
Every year TNB raises rates, your solar system becomes more valuable. A RM45,000 solar system installed in 2026 will be saving you at projected 2030 tariff rates — not 2026 rates.
* Projections based on 3-5% annual effective rate increase (ICPT + base adjustments). Not a guarantee. Source: Trexon Energy analysis.
Use our solar calculator to get a personalised bill reduction estimate based on your actual TNB tariff tier, usage pattern, and roof size.