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An explainer on how corporates procure renewable energy and receive RECs under Malaysia's CGPP without installing panels on their own building. Trexon does not offer or arrange Virtual PPAs — we design and install on-site rooftop solar.
What Is a Virtual PPA?
A Virtual Power Purchase Agreement (Virtual PPA) is fundamentally different from a physical PPA. In a physical PPA, solar panels go onto your roof and you consume that electricity directly. In a Virtual PPA, the solar farm is installed at a remote location — and you never physically receive that electricity.
Instead, the arrangement is financial. You sign a long-term agreement fixing a price for a volume of renewable energy. Each month, financial settlement occurs based on the difference between your contracted price and the actual market price. Alongside this, you receive Renewable Energy Certificates (RECs) and carbon offset credits for every MWh generated on your behalf.
These RECs are the proof of green energy consumption that your ESG reports, RE100 commitments, CDP disclosures, and investor sustainability frameworks require — regardless of what physically flows into your building from TNB.
Remote Solar Farm
The solar plant is built at a grid-connected remote location. No rooftop access, structural surveys, or building modifications required.
Financial Settlement, Not Electrons
Monthly net settlement against System Marginal Price. You benefit when electricity prices rise above your locked CGPA rate.
RECs Issued Per MWh
Renewable Energy Certificates flow directly to you for use in Scope 2 market-based accounting and ESG frameworks.
Financial Settlement
A virtual PPA is settled financially, with RECs bundled with the settlement. RECs are not carbon credits.
How CGPP Works in Malaysia
Malaysia's Corporate Green Power Programme (CGPP) was launched in November 2022 by the Energy Commission, providing a regulated framework for corporate renewable energy procurement.
The Parties
- Corporate Consumer: Your company — signs the CGPA and receives RECs
- Solar Power Producer: Registered RE generator — owns and operates the solar farm
- Energy Commission: Malaysian regulator — oversees CGPP registration and compliance
The Contract
- Agreement Type: Corporate Green Power Agreement (CGPA)
- CGPA Price: Fixed rate agreed between parties
- Reference Price: Actual System Marginal Price (SMP)
- Settlement: Monthly net financial difference
Settlement Logic
Producer pays you the difference. You received cheaper energy than the market price.
You pay the producer the difference. Market was cheaper, but you locked in the producer's contracted price.
Identify RE Needs
Quantify your Scope 2 emissions baseline and set a renewable energy target — typically aligned with RE100, SBTi, or ESG disclosure requirements.
Select Solar Producer
The corporate contracts directly with a CGPP-registered Solar Power Producer that has sufficient capacity and a compatible contract term. Trexon is not a party to this contract.
Sign CGPA
Execute the Corporate Green Power Agreement setting your CGPA rate, contract duration, and REC delivery schedule. No physical infrastructure required.
Monthly SMP Settlement
Each month, the actual System Marginal Price is compared against your CGPA rate. Net financial settlement occurs — you benefit when SMP is above your locked rate.
Receive RECs
Renewable Energy Certificates are issued for each MWh generated and attributed to your account. Use RECs directly in ESG reports, RE100 filings, and CDP disclosures.
Who Should Use Virtual PPA?
Virtual PPA is the right solution when physical solar installation is not feasible, but your ESG and decarbonisation commitments are non-negotiable.
Manufacturers with No Suitable Roof
Old factories with asbestos roofing, structurally limited roof loads, or leased premises where roof modification is restricted by landlords.
Multi-Location Corporates
Companies with dozens of offices, retail outlets, or facilities across Malaysia that cannot install solar at every location but need a single group-level RE commitment.
Tenanted Buildings
Businesses occupying leased office towers where the landlord controls the roof and common infrastructure. Virtual PPA requires no landlord negotiation.
RE100 & ESG Committed Firms
Corporates with international RE100 commitments, Scope 2 SBTi targets, or supply chain decarbonisation requirements from multinational customers.
Carbon Neutral Roadmap Leaders
Companies targeting net-zero by 2030 or 2050 that need immediate, scalable Scope 2 reductions while longer-term on-site solutions are evaluated.
ESG-Reporting Listed Companies
Bursa Malaysia-listed companies subject to enhanced sustainability reporting (ESR) requirements that need auditable, market-based Scope 2 accounting.
Virtual PPA vs Physical PPA vs CRESS
Three pathways to corporate renewable energy in Malaysia — each suited to different business situations.
| Criteria | Virtual PPA (CGPP) | Physical PPA | CRESS |
|---|---|---|---|
| Roof or Premises Required | No — remote solar farm | Yes — on your roof | No — grid allocation |
| Physical Electricity Received | No (financial settlement) | Yes (direct consumption) | No (certificate-based) |
| RECs Issued | Yes | Optional | Yes |
| Scope 2 Carbon Reduction | Yes (market-based) | Yes (location-based) | Yes (market-based) |
| Capex Required | None | None for offtaker (third-party asset owner funds it) | None |
| Suitable For Tenants | Yes | Rarely (landlord approval) | Yes |
CRESS = Corporate Renewable Energy Supply Scheme. CGPP = Corporate Green Power Programme.
Why Corporates Choose Virtual PPA
Six compelling reasons why ESG-committed companies across Malaysia are moving to CGPP Virtual PPA.
RECs for ESG Reporting
Internationally recognised Renewable Energy Certificates for GHG Protocol Scope 2 market-based reporting, CDP, TCFD, and RE100.
Scope 2 Carbon Reduction
Directly reduce your Scope 2 (purchased electricity) emissions footprint without any on-site works or infrastructure changes.
No On-Site Equipment
No solar equipment to buy or install on your premises. Accounting treatment of the contract depends on its terms and your auditors.
Energy Commission-Regulated Programme
CGPP is regulated by the Malaysian Energy Commission, providing legal certainty and settlement integrity for long-term corporate commitments.
Energy Price Hedge
Lock in a CGPA rate as a financial hedge against rising System Marginal Prices. Benefit financially when electricity markets rise.
Scaled to Your Needs
Procure renewable energy to match your organisation's needs, not just one building.
Recognised by Major ESG Frameworks
Scope 2 market-based accounting
Qualifying renewable energy procurement
Climate disclosure renewable sourcing
Climate risk transition metrics
Frequently Asked Questions: Virtual PPA & CGPP Malaysia
Common questions from corporate sustainability managers and ESG leads evaluating CGPP.
What is a Virtual PPA in Malaysia?
A Virtual PPA (Power Purchase Agreement) is a financial contract where a corporate buyer purchases renewable energy from a solar farm without physically receiving that electricity. Instead, you receive Renewable Energy Certificates (RECs) proving the energy was generated and injected into the grid, along with carbon offset credits. The electricity is "virtually" allocated to your account through Malaysia's CGPP framework.
What is the Corporate Green Power Programme (CGPP)?
The CGPP is a Malaysian government initiative launched in November 2022 under the Energy Commission. It allows corporate consumers to procure renewable energy directly from Solar Power Producers through a Corporate Green Power Agreement (CGPA). Settlement is based on the difference between the agreed CGPA price and the actual System Marginal Price (SMP) — no physical electricity transfer is required.
How does financial settlement work under CGPP?
Each month, the actual System Marginal Price (SMP) is compared to your contracted CGPA rate. If SMP exceeds your CGPA rate, the Solar Power Producer compensates you for the difference — you effectively received cheaper energy than market price. If SMP is below your CGPA rate, you compensate the producer. It is a net financial settlement, similar to a financial hedge on electricity prices.
Do I need to install anything on my building for Virtual PPA?
No. That is the core advantage of Virtual PPA. The solar farm is installed at a remote location — not on your premises. You do not need a suitable roof, structural assessments, building management approval, or TNB connection upgrades. Your building continues to receive electricity from TNB as normal, while your REC certificates verify your green energy consumption.
What are RECs and how do they help my ESG reporting?
Renewable Energy Certificates (RECs) are internationally recognised instruments that certify one megawatt-hour of electricity was generated from renewable sources. Under GHG Protocol Scope 2 market-based accounting, RECs allow you to report zero-carbon electricity regardless of your physical grid connection. This supports RE100 commitments, TCFD disclosures, CDP reporting, and ESG frameworks required by investors and multinational supply chains.
What is the minimum commitment for CGPP Virtual PPA?
Participation requirements, including any minimum size, are set by the programme and the generator, so confirm them before committing. Contract terms are generally 3-5 years. The VPPA itself is contracted with a third-party generator; Trexon does not offer or arrange a VPPA, but can review your bills and install on-site rooftop solar alongside it.
Ready to Procure Green Power Without a Rooftop?
A VPPA is contracted directly with a CGPP-registered generator; Trexon does not offer or arrange one. What Trexon can do is review your bills and price on-site rooftop solar, which you can own outright (GITA-eligible) or finance through hire purchase.
B2B enquiries only.
Get an On-Site Solar Proposal
Tell us about your facility and we'll price an owned rooftop system or hire purchase from your bills.
- Sizing from your 12 months of TNB bills and shift pattern
- Roof, switchboard and single-line diagram reviewed by our engineers
- Available incentives (GITA for solar, subject to MGTC verification) and Solar ATAP eligibility checked for your premises
- SEDA-registered PV Service Provider (RPVSP-2026/373) · SSM 201301044881 (1074704-D)
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Corporate Renewable Energy
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Rooftop solar owned by a third-party asset owner; Trexon does not offer PPAs
RECs & ESG Solutions
Renewable Energy Certificates and ESG compliance frameworks for Malaysian corporates
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