Malaysia Solar Incentives 2026:
Every Scheme Explained

Solar ATAP (Solar Accelerated Transition Action Programme) is Malaysia's solar net-billing programme that replaced NEM 3.0 in January 2026. Under ATAP, excess solar energy exported to the grid is credited at the Energy Charge rate for domestic consumers (~RM0.218/kWh) or the Average SMP for non-domestic consumers (~RM0.25/kWh). While the export rate is lower than the old NEM 1:1 offset, self-consumed energy still saves at full tariff rates — making solar highly attractive.

For a typical 10kWp residential system, ATAP can reduce monthly TNB bills by 60–80%. The key to maximising savings under ATAP is self-consumption — every kWh consumed directly saves the full tariff rate (up to RM0.571/kWh), while exported kWh earn the Energy Charge rate (~RM0.218/kWh). Systems sized for 70–80% self-consumption deliver the best ROI.

Who Can Apply

• Residential premises connected to TNB (Peninsular Malaysia) or SESB (Sabah)
• Commercial and industrial premises on applicable tariff bands
• New installations and systems converting from NEM 3.0
• System size: 1kWp to 1MWp (residential typically 3–25kWp)

Application Process

1. Engage a SEDA-registered solar contractor (like Trexon)
2. Submit system design and equipment specs to SEDA
3. SEDA approves and issues the ATAP quota allocation
4. Install system and commission with TNB bidirectional meter
5. TNB activates net billing — credits appear on monthly bill

Financial Impact

With an average payback period of 5–7 years on a residential system and a 25-year panel lifespan, ATAP installations deliver ROI of 300–400% over the system lifetime. Commercial systems with higher daytime consumption can achieve payback in as little as 3–4 years.

The Green Investment Tax Allowance (GITA) is one of the most powerful corporate solar incentives available in Malaysia. Under GITA, companies that invest in qualifying green technology assets — including solar PV systems — receive a 100% Investment Tax Allowance (ITA) on the capital expenditure incurred. This allowance can be offset against up to 70% of statutory income in each assessment year, with the remaining balance carried forward indefinitely.

For a business investing RM500,000 in a rooftop solar system, GITA effectively allows the full RM500,000 to be deducted from taxable income over successive years — delivering a direct tax saving of RM120,000 for companies at the 24% corporate tax rate, on top of the ongoing electricity cost savings.

What Qualifies Under GITA

• Solar PV systems (panels, inverters, mounting structures, wiring)
• Battery energy storage systems (BESS) installed with solar
• Energy management systems and smart meters
• Green buildings certified under GreenRE, GBI, or MyCREST
• EV charging infrastructure installed at business premises
• Biomass, biogas, and other renewable energy equipment

Who Can Apply

• Malaysian-incorporated companies (Sdn Bhd, Bhd)
• Companies that own and operate the green technology asset (not lease)
• Both new installations and qualifying upgrades to existing systems
• Application must be submitted to MIDA before asset commissioning

How to Apply

1. Obtain a Green Technology Verification Certificate from SIRIM or CETREE
2. Submit GITA application to MIDA (Malaysian Investment Development Authority)
3. MIDA issues an Approval Letter specifying the allowable ITA amount
4. Claim the ITA in your corporate tax return (Form C) annually
5. Carry forward unused allowances to subsequent years

GITA + GTFS Stack

GITA is most powerful when combined with GTFS green financing (see below). Use GTFS to fund the capital outlay at subsidised interest rates, then claim GITA on the full project cost — effectively double-dipping on government support for the same investment. This combination can reduce the net effective cost of a commercial solar installation by 40–60%.

The Green Income Tax Exemption (GITE) is the sister incentive to GITA, designed for companies that provide green technology services rather than purchasing green assets themselves. Under GITE, qualifying companies receive an income tax exemption of up to 100% on statutory income derived from green technology services — including solar leasing, solar O&M, energy auditing, and green building consultancy.

GITE is particularly relevant to solar leasing models (also known as Zero CAPEX or Power Purchase Agreements), where a solar company owns the panels and sells electricity to the building owner. The solar company's income from these lease agreements can qualify for full income tax exemption under GITE — making the leasing model commercially viable and allowing building owners to go solar with no upfront investment.

Qualifying Green Technology Services

• Solar PV system leasing and Power Purchase Agreements (PPAs)
• Operation and maintenance of renewable energy systems
• Energy auditing and efficiency advisory services
• Green building design, commissioning, and certification support
• EV charging network operation

Key Conditions

• Company must be verified by the Ministry of Natural Resources and Environmental Sustainability
• GITE application submitted to MIDA before December 31, 2026
• Exemption period: up to 10 years from first year of income
• Separate applications required for each qualifying project or service line

For building owners interested in a zero-CAPEX solar solution, ask Trexon about our solar leasing programme — where the financial benefits of GITE flow through to competitive PPA pricing that can be lower than your current TNB tariff from day one.

The Green Technology Financing Scheme 5.0 (GTFS 5.0) is a government-backed loan guarantee programme administered by the Malaysia Green Technology and Climate Change Corporation (MGTC). The scheme allocates RM1 billion in government-guaranteed financing to help businesses access affordable loans for green technology investments including solar PV systems.

Unlike GITA (which provides tax relief), GTFS directly reduces the cost of capital. The government provides a 2% interest rate rebate and a 60% government guarantee on the loan principal, dramatically lowering the risk profile for lending banks and allowing them to offer more favourable terms to borrowers. For SMEs — which often struggle to secure asset-backed financing for intangible investments — GTFS is a game-changer.

Key Terms

Participating Banks

GTFS 5.0 financing is channelled through approved partner banks and Development Financial Institutions (DFIs) including Maybank, CIMB, RHB, AmBank, Bank Islam, Bank Muamalat, Agro Bank, SME Bank, and EXIM Bank. Each bank sets their own credit assessment criteria, so it's worth comparing offers across institutions.

How to Access GTFS

1. Obtain a MGTC Green Technology Verification for your solar project
2. Apply through any participating bank, citing GTFS 5.0 as the funding scheme
3. Bank submits guarantee application to CGC (Credit Guarantee Corporation)
4. Loan approved with 2% government-subsidised interest rebate
5. Draw down funds to pay your solar contractor directly

The Corporate Renewable Energy Supply Scheme (CRESS) allows large electricity consumers to directly purchase renewable energy — including solar — to meet their sustainability targets and power purchase commitments. The scheme has attracted commitments totalling 1.3 GW of renewable capacity and RM3.5 billion in expected investment, making it one of the largest corporate green energy programmes in Southeast Asia.

Under CRESS, qualifying corporations can enter long-term Power Purchase Agreements (PPAs) with renewable energy generators. The renewable electricity is wheeled through TNB's grid to the corporate buyer's premises. This is distinct from rooftop solar — CRESS allows companies to source large volumes of renewable power even without suitable rooftop space, and to meet 100% renewable electricity targets across multiple facilities simultaneously.

Who CRESS Is For

• Large corporations with annual electricity consumption exceeding 1 GWh
• Multinational companies with RE100 or Science Based Targets (SBTi) commitments
• Export-oriented manufacturers facing supply chain sustainability pressure
• Companies building ESG credentials for investors and customers

Key Benefits

• Renewable Energy Certificates (RECs) for verified green electricity claims
• Long-term price stability vs. volatile fossil fuel tariffs
• Supports Scope 2 emission reductions under GHG Protocol
• Access to dedicated renewable capacity — not just carbon offsets

For corporations that also own factory or warehouse rooftops, CRESS complements on-site solar perfectly — use rooftop ATAP for daytime self-consumption and CRESS to cover balance loads and night-time demand with verified green electricity.

Sarawak operates its own Net Energy Metering (NEM) programme administered by SESCo (Sarawak Energy Berhad), separate from SEDA's Solar ATAP programme on the peninsula. Sarawak residents benefit from SESCo's NEM framework, which provides bill credits for exported solar energy at rates comparable to Peninsular Malaysia. Sarawak also benefits from higher solar irradiance (averaging 4.8–5.2 kWh/m²/day) compared to the Peninsula.

For a typical 6–10kWp residential system, Sarawak solar payback periods are often competitive due to higher generation yields. SESCo's electricity tariffs differ from TNB's — consult a SESCo-registered contractor for current applicable export rates and ROI calculations specific to your location in Sarawak.

Eligibility Requirements

• Sarawak residential or commercial premises connected to SESCo grid
• Property must be owned (not rented) for residential claims
• System size: typically 3kWp to 12kWp for residential subsidy tier
• Installation must be by a SESCo-approved solar contractor
• Application submitted before installation commences

How Sarawak NEM Works

Sarawak operates its own Net Energy Metering programme administered by SESCo, separate from SEDA's ATAP programme on the peninsula. Export rates and billing structures differ slightly — consult with a SESCo-registered contractor for the current applicable rates in your area. SESCo's electricity tariffs are also structurally different from TNB's, which affects the ROI calculation for Sarawak installations.

Malaysia's Carbon Tax, effective from January 2026, imposes a levy of RM35–45 per tonne of CO2 equivalent on the iron and steel sector and energy-intensive industries. While technically a compliance cost rather than a direct solar incentive, carbon tax is the strongest market force making solar economically compelling for manufacturers — and savvy businesses are treating it as exactly that.

A factory consuming 5 million kWh annually from grid electricity (coal-heavy mix) generates approximately 3,000–4,000 tonnes of CO2e. At RM40/tonne, that is RM120,000–160,000 per year in carbon tax liability. A 1MWp rooftop solar system generating 1.4 million kWh annually eliminates roughly 900 tonnes of CO2e — saving RM36,000/year in carbon tax alone, stacked on top of the electricity cost savings.

Sectors Affected (Phase 1)

• Iron and steel manufacturing (primary affected sector)
• Energy sector — power generation companies
• Cement and glass production (expected Phase 2)
• Export-oriented manufacturers subject to EU CBAM (Carbon Border Adjustment Mechanism)

Solar as a Carbon Tax Mitigation Tool

Onsite solar generation directly reduces grid electricity consumption, which is the primary source of Scope 2 emissions for most manufacturers. Every kWh generated on-site reduces the carbon tax liability proportionally. For energy-intensive facilities, the carbon tax savings alone — before counting electricity cost reduction — can justify a significant portion of the solar investment ROI.

Companies subject to carbon tax can also combine solar with GITA (100% ITA), GTFS green financing, and CRESS to build a comprehensive decarbonisation strategy that satisfies regulators, reduces operating costs, and meets ESG investor requirements.

Under Malaysia's Budget 2025 and 2026 personal income tax incentives, individual taxpayers can claim up to RM2,500 income tax relief for the purchase and installation of a home EV charging unit. This relief is available from YA 2024 through YA 2026 and applies to any EV-certified home charger installed at your primary residence.

The smart play is to combine the EV charger tax relief with a home solar system. With Solar ATAP generating free daytime electricity and a home charger on a time-of-use tariff, EV owners can charge their vehicles at near-zero cost using surplus solar generation — effectively driving on sunlight while also claiming the RM2,500 tax relief on the charger hardware.

Eligibility

• Malaysian individual taxpayer (not companies — this is personal income tax)
• Purchase and install a certified home EV charger at residential premises
• Charger must be purchased new (not second-hand)
• Claim via annual tax return (e-BE/BE form under Special Tax Relief)