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Configure solarSolar PPA Malaysia: Power Purchase Agreement
Install commercial solar on your rooftop with RM0 capital investment. Under a Solar PPA, Trexon installs, owns, and maintains the system — you simply buy the electricity generated at 10-20% below your current TNB tariff.
What Is a Solar PPA in Malaysia?
A Power Purchase Agreement (PPA) — sometimes called a Solar Service Agreement or SPPA — is a financial model where your business never buys the solar system. Instead, a solar developer like Trexon installs the system on your rooftop at no cost, and you simply purchase the electricity it generates.
Think of it as a private electricity supply arrangement: you have a solar power plant on your roof, but the provider owns it, insures it, and maintains it throughout the contract term. Your role is limited to consuming the solar electricity and paying a per-kWh rate — a rate that is contractually locked below your TNB bill.
PPA is the dominant solar model for large commercial and industrial businesses in Malaysia that want immediate energy savings without touching their capital reserves or taking on asset ownership risk.
No Ownership Required
You never own the panels, inverters, or any component. The provider carries the asset on their books.
Zero Technical Risk
If a panel degrades, an inverter fails, or production drops — the provider fixes it, not you.
Guaranteed Rate Discount
Your PPA rate is set contractually below TNB tariff. You save from day one.
Long-Term Price Stability
Lock in your solar rate for 15-25 years while TNB tariffs continue to rise.
How a Solar PPA Works
From signing to savings in five straightforward stages — your involvement is minimal throughout.
Agreement Signed
Your business signs a Power Purchase Agreement with Trexon. The contract sets the PPA rate, duration (typically 20 years), and terms. No payment required at this stage.
System Designed & Installed
Trexon engineers site-assess your roof, designs an optimised solar system, handles all permits and TNB approvals, and installs the full system — at zero cost to you.
Energy Generated
Your rooftop solar system starts generating clean electricity. A smart meter accurately measures every unit of solar energy produced and delivered to your building.
You Pay Per kWh
At the end of each billing cycle, you pay only for the solar electricity you consumed — at your contracted PPA rate, which is 10-20% below TNB tariff. Any shortfall is topped up by TNB as normal.
Provider Maintains Everything
Trexon continuously monitors performance, handles all cleaning, maintenance, and repairs throughout the full contract term. Your only job is to use the electricity.
From site assessment to first electricity generated, a typical commercial PPA takes 8-16 weeks depending on system size and TNB connection lead times.
PPA vs Other Solar Models
How does a Power Purchase Agreement stack up against outright purchase, bank loan financing, and rent-to-own arrangements?
| Criteria | Solar PPA | Buy Outright | Bank Loan | Rent-to-Own |
|---|---|---|---|---|
| Upfront Cost | RM0 | RM80K – RM800K+ | RM0 (but debt obligation) | RM0 – small deposit |
| Who Owns the System | Provider | Your business | Your business | Provider (until buyout) |
| Maintenance Responsibility | Provider (fully) | Your business | Your business | Usually provider |
| Monthly Payment | Pay per kWh used | None (post-purchase) | Fixed loan repayment | Fixed monthly rental |
| Savings vs TNB | 10-20% | 60-90% (long term) | 30-60% (net of loan) | 10-25% |
| Balance Sheet Impact | Minimal (OpEx) | Asset + depreciation | Liability (debt) | Varies by structure |
Savings estimates are indicative. Actual figures depend on system size, location, tariff category, and consumption profile.
Solar PPA Rates in Malaysia
Indicative PPA rates by business type and system size. Final rates depend on your TNB tariff category, consumption profile, roof suitability, and contract duration.
| Business Type | System Size | TNB Tariff | PPA Rate | Savings | Monthly PPA Bill (est.) |
|---|---|---|---|---|---|
| SME Office | 50-100 kWp | RM0.435/kWh | RM0.36/kWh | ~17% | RM2,000 – RM5,000/mo |
| Warehouse / Logistics | 100-300 kWp | RM0.435/kWh | RM0.34/kWh | ~22% | RM5,000 – RM15,000/mo |
| Factory / Industrial | 300-1,000 kWp | RM0.337/kWh (E2 HV) | RM0.28/kWh | ~17% | RM15,000 – RM50,000/mo |
| Shopping Mall | 500-2,000 kWp | RM0.435/kWh | RM0.30/kWh | ~31% | RM30,000 – RM120,000/mo |
Fixed Rate Option
Lock in one PPA rate for the entire 20-year term. Ideal if TNB tariff increases are expected.
Escalator Rate Option
Start at a lower rate with a 1-3% annual increase, still guaranteed to stay below TNB tariff.
Hybrid Rate Option
Fixed for 10 years, then renegotiated at market rate. Balances certainty with flexibility.
Who Is Solar PPA Best For?
PPA is ideal for organisations with high daytime electricity consumption, available roof space, and a preference to preserve capital.
Factories & Manufacturing
High daytime electricity loads make factories ideal PPA candidates. Reduce OpEx without disrupting capital for machinery and production expansion.
Best fit: 300kWp – 2MWpWarehouses & Logistics
Large flat roof areas and consistent lighting and cooling loads make warehouses perfect for PPA solar. Landlords can offer tenants green energy credentials.
Best fit: 100kWp – 500kWpOffice Buildings
Reduce common area electricity costs and achieve ESG reporting targets. PPA helps offices demonstrate sustainability without board-level capex approval battles.
Best fit: 50kWp – 200kWpShopping Malls & Retail
Massive cooling and lighting bills make malls prime PPA candidates. Reduce utility costs while marketing your commitment to clean energy to shoppers.
Best fit: 500kWp – 3MWpSchools & Universities
Educational institutions often lack capital budgets for solar. PPA delivers immediate savings with zero procurement risk, helping institutions meet sustainability goals.
Best fit: 50kWp – 300kWpHotels & Hospitality
Round-the-clock energy consumption and guest-facing sustainability credentials make hotels strong PPA candidates. Reduce F&B and room cooling costs immediately.
Best fit: 100kWp – 500kWpMinimum Requirements for PPA in Malaysia
GITA Tax Benefits Under a Solar PPA
GITA (Green Investment Tax Allowance) is Malaysia's flagship tax incentive for green technology investments, administered by MIDA. It provides a 100% allowance on qualifying capital expenditure against statutory income for up to 10 years.
In a standard PPA, the solar provider (not your business) makes the capital investment and therefore claims GITA. However, certain PPA structures can be designed to give your business access to GITA-equivalent benefits:
- Conditional ownership transfer structures where GITA passes to the host business
- Hybrid PPA-ownership models where you co-invest a portion to claim partial GITA
- Sale-and-leaseback structures that can preserve GITA eligibility for the business
- Consulting with MIDA directly to confirm qualifying expenditure treatment
Important: Tax treatment of PPA arrangements depends on the specific contract structure and your business's tax position. Always consult a qualified Malaysian tax advisor before making decisions based on GITA eligibility.
GITA Key Facts for 2026
Other Tax Considerations
PPA payments are typically classified as operating expenses (OpEx) rather than capital expenditure, meaning they are fully deductible against business income annually — offering a different but valuable tax benefit even without GITA ownership.
Frequently Asked Questions: Solar PPA Malaysia
Common questions from Malaysian businesses evaluating a Power Purchase Agreement.
What is a Solar PPA (Power Purchase Agreement) in Malaysia?
A Solar PPA is a financial arrangement where a third-party solar provider (like Trexon) installs, owns, and operates a solar system on your rooftop or property at zero cost to you. You then purchase the electricity generated at a discounted rate — typically 10-20% below your current TNB tariff — for the duration of the agreement (usually 15-25 years).
How much does a Solar PPA cost upfront in Malaysia?
Zero ringgit. The defining feature of a PPA is RM0 capital expenditure (capex) for the business. The solar provider covers 100% of the equipment, engineering, installation, grid connection, and commissioning costs. You only start paying once the system is generating electricity.
Who owns the solar system in a PPA arrangement?
The solar provider (Trexon or its financing partner) owns the solar system throughout the contract term. This is what makes PPA different from buying or financing solar — ownership and all associated risks remain with the provider, not your business.
Who handles maintenance and repairs under a Solar PPA?
The system owner — the solar provider — is fully responsible for all maintenance, cleaning, repairs, monitoring, and insurance throughout the entire contract period. If a panel breaks, an inverter fails, or production drops below guaranteed levels, the provider fixes it at no cost to you.
What happens when the PPA contract ends?
At the end of the 15-25 year term, you typically have three options: (1) Renew the PPA agreement at a new (usually lower) rate, (2) Purchase the system at its residual market value or a nominal fee, often as low as RM1 for older systems, or (3) Have the system removed by the provider at no charge. Most businesses choose to purchase or renew.
Can my business still claim GITA tax incentives under a Solar PPA?
GITA (Green Investment Tax Allowance) typically requires asset ownership, which in a standard PPA goes to the provider. However, certain PPA structures — particularly those with a buyout clause or where the business retains beneficial ownership — can be structured to qualify. Trexon works with tax advisors to optimise PPA structures for GITA eligibility. Consult a tax professional for your specific situation.
What types of businesses qualify for Solar PPA in Malaysia?
Solar PPA works best for businesses with high, consistent daytime electricity consumption. Ideal candidates include factories and manufacturing plants, large warehouses and logistics hubs, shopping malls and retail complexes, hospitals and medical facilities, universities and schools, and office buildings above 5,000 sq ft. Minimum system size is typically 50 kWp for PPA to be financially viable.
How does the PPA rate compare to TNB tariff in Malaysia?
PPA rates are contractually set at 10-20% below the applicable TNB tariff at the time of signing. For commercial businesses on TNB E1/E2 tariff (around RM0.338-RM0.509/kWh), a typical PPA rate might be RM0.28-RM0.38/kWh. The rate is either fixed for the contract duration or includes a small annual escalator (1-3%) that remains below projected TNB tariff increases.
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