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RP4 Tariff Restructuring Active: Effective 1 Jul 2025 — Dec 2027. Review your bill now.
Industrial Cost Reduction Report — RP4 Framework

TNB Tariff RP4:
Your Factory's RM89.27/kW
Problem.

Under TNB's Regulatory Period 4 tariff restructuring (effective July 2025), Medium Voltage General users pay a Maximum Demand charge of RM89.27/kW (RM29.43 capacity + RM59.84 network). For a typical 500kW factory, that is RM44,635 per month in fixed demand charges — before consuming a single kWh. Solar cuts the energy part of the bill; reducing the MD charge reliably needs a peak-shaving battery (BESS).

2026 guide 16 min read For: Plant Managers, CFOs, Facility Engineers
RP4 Key Figures
MV General Energy Charge
29.83 sen/kWh
TNB schedule from 1 Jul 2025
MV General MD Charge
RM89.27/kW
capacity RM29.43 + network RM59.84
AFA (October 2026)
+3.61 sen/kWh
set monthly
MV Time of Use Peak Energy
31.32 sen/kWh
off-peak 27.23 sen/kWh
Energy Charge saving (500 kWp solar)
RM15,661
per month, no MD saving counted

01Current TNB Medium Voltage Tariff Components

From 1 July 2025, TNB bills non-domestic Medium Voltage users under an unbundled schedule. Most Malaysian factories with demand above 1 MW are supplied at medium voltage, so the MV General tariff below is the starting point for most factory bills.

Under RP4, the bill is split into an energy charge per kWh, capacity and network charges per kW of Maximum Demand, and a fixed monthly retail charge. Understanding each component is critical to identifying where solar provides the greatest financial impact.

TNB Medium Voltage General Tariff — effective 1 July 2025 (RP4)
Tariff ComponentRateDescription
Energy Charge29.83 sen/kWhCharged on every kWh drawn from the grid
Capacity Charge (Generation)RM29.43/kWCharged on your monthly Maximum Demand (kW)
Network Charge (Transmission + Distribution)RM59.84/kWCharged on your monthly Maximum Demand (kW) — cables, substations, transformers
Retail ChargeRM200/monthFixed monthly charge per account
AFA (October 2026)+3.61 sen/kWhAutomatic Fuel Adjustment; set monthly
MD Charge Total (Capacity + Network)RM89.27/kWCombined charge on every kW of Maximum Demand

Solar impact on unbundled tariffs: Onsite solar generation directly reduces the per-kWh Energy Charge and the fuel surcharge. The Capacity and Network Charges are billed per kW of Maximum Demand, so solar reduces them only when it lowers the peak recorded by the MD meter. The Retail Charge stays the same.

02TNB Medium Voltage & High Voltage Tariff Categories

Since 1 July 2025, TNB's non-domestic tariffs are structured by supply voltage and by whether you choose a General or Time of Use (ToU) rate. These categories replaced the old commercial (C1, C2) and industrial (E1, E2, E3) tariff names. Most Malaysian factories with demand between 1–10 MW are supplied at Medium Voltage (MV). Understanding which category you are on determines your MD charge exposure.

TariffTypical UserMD Charge (RM/kW)Energy / Peak (sen/kWh)Off-Peak (sen/kWh)
MV GeneralFactories, cold storage and commercial buildings supplied at medium voltageRM 89.2729.83 sen—
MV Time of UseMV users who choose peak/off-peak pricing (MD charged on peak-period MD)RM 97.0631.32 sen27.23
HV GeneralLarge industrial sites supplied at high voltageRM 31.2143.03 sen—
HV Time of UseHV users who choose peak/off-peak pricingRM 44.8244.52 sen40.43

Critical: Medium Voltage users carry the heaviest MD charges — RM89.27/kW on MV General and RM97.06/kW on MV Time of Use, roughly three times the RM31.21/kW HV General rate. MV retail charge is RM200/month; HV is RM250/month. If your factory is supplied at medium voltage (most factories above 1MW demand are), Maximum Demand reduction is your single largest cost-reduction opportunity.

03Maximum Demand Explained: The RM89.27/kW Penalty

Maximum Demand (MD) is the single most misunderstood item on a Malaysian industrial electricity bill. It is not based on your total consumption — it is based on your peak consumption in any 30-minute window during the billing month.

How TNB Measures Maximum Demand

TNB installs a peak-demand meter that continuously samples your power draw. Every 30 minutes, it records the average kW consumption for that interval. The highest single 30-minute average across the entire month becomes your “Maximum Demand” — and you are billed at RM89.27 for every kW of that peak, for the entire month.

Worked Example: Injection Moulding Factory, Klang
Factory baseline load (overnight)120 kW
Peak machine start-up (10am, 30-min average)560 kW
Average load (rest of day)280 kW
Total energy consumed (24h × 30 days)252,000 kWh
MD Charge (560 kW × RM89.27)RM 49,991/month
Energy Charge (252,000 × 29.83 sen, MV General)RM 75,172/month
MD as % of total bill39.9% of bill

Common MD Spike Causes in Malaysian Factories

Machine start-up sequences
Motor inrush current creates 2–5× normal draw for 15–30 min
Air compressor cycling
Compressed air systems often create sharp 30-min demand spikes
Injection moulding heating cycle
Resistance heaters draw peak power during heat-up phase
HVAC system activation
Chiller and cooling tower start-up at shift beginning
Welding and cutting equipment
High-current arc processes with intermittent but extreme peaks
Conveyor system start-up
Static friction load significantly higher than running load

04What Solar Does to Maximum Demand: 500 kWp Example

A rooftop solar system's peak generation occurs between 10am and 2pm, when many Malaysian factories are busy. On a clear day the solar output lowers the grid draw, but MD is the highest 30-minute reading of the whole month: one cloudy half-hour during production can set the same MD as before. That is why Trexon's solar-only proposals count savings on energy and AFA only, and treat MD as unchanged.

Daily Load Profile: Solar on a Clear Day

Typical 500kW factory on the MV General tariff (8am–6pm operation)

6am7891011121pm23456pm
MD Peak (500kW) — set by any cloudy half-hour
Grid Draw (kW)
Solar Generation (kW)
MD Peak

Savings Calculation: 500 kWp Solar System

Factory Maximum Demand
500 kW
MV General tariff
Energy displaced by solar
52,500 kWh
500 kWp × 105 kWh/kWp, all used on site
Energy Charge saving
RM 15,661
52,500 kWh × 29.83 sen
AFA saving (not counted)
upside
AFA changes monthly — excluded from the total
MD saving from solar alone
RM 0
not counted: one cloudy half-hour sets MD
Monthly Solar Savings
energy charge only, no MD saving counted
RM 15,661
per month
Total Monthly Savings: 500 kWp System on MV General Tariff (Before vs. After Solar)
Cost ComponentBefore SolarAfter SolarMonthly Saving
MD Charge (MV General, RM89.27/kW)RM 44,635RM 44,635— (needs BESS)
Energy (29.83 sen × 105,000 kWh; solar displaces 52,500 kWh)RM 31,322RM 15,661RM 15,661
Retail Charge (MV)RM 200RM 200—
AFA (October 2026: 3.61 sen)RM 3,791RM 3,791— (AFA not counted)
Total Monthly BillRM 79,948RM 64,287RM 15,661

05Peak Shaving with Battery Storage (LFP BESS)

For factories where MD spikes occur outside solar hours — early morning shift start-ups, night shifts, or on overcast days — Lithium Iron Phosphate (LFP) Battery Energy Storage Systems can reduce MD when they are sized and operated for peak shaving; the result depends on your load profile and the battery size. Solar alone cannot do this reliably.

Solar-Only Peak Shaving

Cuts energy (kWh) charges during daylight hours, but does not reliably reduce MD: one cloudy half-hour during production sets the month's MD.

Lower upfront cost (no battery)
Simpler O&M, longer lifespan
Cloudy days reduce effectiveness
Cannot manage pre-dawn peaks

Solar + LFP Battery

Charges from solar during midday; discharges to shave peaks at any hour. Can reduce MD when sized and operated for peak shaving; results depend on your load profile.

Reduces MD when sized and operated for peak shaving
Manages night shift peaks
Off-peak charging arbitrage possible
Higher capex (BESS RM1,300–2,100/kWh, quoted per site)
BESS Sizing Guide for MD Reduction
MD Reduction TargetBESS Power (kW)BESS Capacity (kWh)CostMD Savings/mo
100 kW reduction100 kW200 kWhQuoted per siteRM 8,927
200 kW reduction200 kW400 kWhQuoted per siteRM 17,854
300 kW reduction300 kW600 kWhQuoted per siteRM 26,781
500 kW reduction500 kW1,000 kWhQuoted per siteRM 44,635

06AFA: A Variable Cost That Solar Avoids

Since July 2025 the Imbalance Cost Pass-Through (ICPT) has been replaced by the Automatic Fuel Adjustment (AFA), set monthly from fuel prices and exchange rates as determined by the Energy Commission. In October 2026 the AFA is +3.61 sen/kWh, adding RM3,610 per 100,000 kWh consumed.

Recent and Forecast AFA Rates (TNB)
PeriodAFA (sen/kWh)Annualized Cost (per 1 GWh)
Sep 2026 3.67 senRM 36,700
Oct 2026 ← Current3.61 senRM 36,100
Nov 2026 (TNB forecast) 4.27 senRM 42,700
Dec 2026 (TNB forecast) 4.46 senRM 44,600
Jan 2027 (TNB forecast) 7.59 senRM 75,900
Solar Avoids the AFA

Solar energy has no fuel cost. Every kWh generated by your rooftop solar system and used on site displaces one kWh from the grid at the full tariff rate including the AFA. As fuel prices and exchange rates move, the AFA moves with them; solar-displaced kWh become more valuable when the AFA rises.

Industrial Energy Insight // Trexon Engineering Team

“The MD charge is the silent killer of Malaysian factory profitability. Many factories we speak to have never analyzed their 30-minute demand profile. When you see the chart, it becomes clear which part of the bill solar can cut and which part needs a peak-shaving battery.”

TE
Trexon Industrial Engineering Team
Trexon Energy — Industrial Solar & BESS

07Frequently Asked Questions

What is TNB Maximum Demand (MD) and how is it calculated?
Maximum Demand (MD) is the highest average power consumption recorded over any single 30-minute interval within a billing month. TNB measures this with a peak-demand meter and bills it at RM89.27/kW under the Medium Voltage General tariff. A factory with a 500kW peak pays RM44,635/month in MD charges alone — regardless of total energy consumed in the rest of the month.
What is the TNB AFA and will it increase in future?
The Automatic Fuel Adjustment (AFA) replaced the ICPT in July 2025 and is set monthly from fuel prices and exchange rates. In October 2026 it is +3.61 sen/kWh (TNB forecast: November +4.27, December +4.46, January 2027 +7.59). Solar energy has zero fuel cost, so solar savings become more valuable whenever the AFA rises.
Does a 500 kWp solar system reduce my Maximum Demand?
Not reliably. MD is the highest 30-minute reading of the month, and a single cloudy half-hour during production can set it, so Trexon's solar-only proposals model no MD saving. In the 500 kWp example on this page, solar saves about RM15,700 a month on the energy charge (all output used on site). Cutting MD needs a peak-shaving BESS: shaving 300–400 kW at RM89.27/kW is worth RM26,781–35,708 a month.
What are the TNB Medium Voltage and High Voltage tariff categories?
Since 1 July 2025, the old C1, C2, E1, E2 and E3 names have been replaced. MV General: 29.83 sen/kWh, MD RM89.27/kW. MV Time of Use: 31.32 sen/kWh peak, 27.23 sen/kWh off-peak, MD RM97.06/kW on peak-period MD. HV General: 43.03 sen/kWh, MD RM31.21/kW. HV Time of Use: 44.52 sen/kWh peak, 40.43 sen/kWh off-peak, MD RM44.82/kW. Retail charge is RM200/month (MV) or RM250/month (HV). Most factories between 1–10 MW demand are supplied at medium voltage.
Do I need battery storage (BESS) for peak shaving, or can solar alone do it?
Solar alone does not reliably reduce Maximum Demand: MD is the highest 30-minute reading of the month, so a single cloudy half-hour during production sets the MD for that month. Reliable MD reduction needs a peak-shaving battery (LFP BESS) that discharges when demand rises. Solar still cuts your energy (kWh) charges during daylight hours. BESS is the tool for MD, especially when (1) your peak demand occurs outside solar hours (e.g., night shifts or early-morning machine start-up), or (2) you need to hold a specific MD target regardless of cloud cover.
Can I check my historical Maximum Demand data before commissioning solar?
Yes. TNB provides 12 months of 30-minute interval data (AMR data) upon request from commercial accounts. Trexon Energy analyzes this data remotely as part of our free quote — we identify your specific MD peak windows and show whether BESS peak shaving is needed. Solar savings are modelled on energy (kWh) and AFA only; your MD charge is treated as unchanged without a battery.

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