Malaysia Revises Solar Self-Consumption Programme to Support Renewable Energy Growth

The Malaysian government has introduced key revisions to the solar energy Self-Consumption (SelCo) programme, aiming to ease financial burdens on industry players and accelerate the transition to renewable energy.

A major change includes the exemption of energy storage system installation requirements for all categories until December 31, 2025. Deputy Prime Minister Fadillah Yusof, who also serves as the Energy Transition and Water Transformation Minister, stated that the measure would allow businesses to adapt to new regulations without facing significant costs.

Further adjustments have been made to standby charges, a long-standing concern within the industry. Installations below one megawatt peak (MWp) are now exempt from standby charges, while the charge for capacities exceeding 1MWp has been reduced from RM14 per kilowatt peak (kWp) to RM12/kWp.

“These improvements strike a balance between ensuring grid stability and maintaining business viability,” Fadillah said. “Industry players have voiced concerns that standby charges and energy storage requirements could impact profitability. After consultations with stakeholders, we have refined these conditions to better support the industry.”

The announcement was made during the National Energy Award Appreciation Ceremony, where 38 public and private sector organisations were recognised for their contributions to Malaysia’s energy transition efforts.

The government’s renewable energy strategy extends beyond solar generation, incorporating digitalisation, decentralisation, and decarbonisation to create a more dynamic and investor-friendly green energy ecosystem. Efforts to achieve this include increasing renewable energy sources in the national grid through the Large Scale Solar bidding programme for 2025 and 2026, which has a target capacity of up to 6,000MW.

Additionally, Malaysia’s largest solar and floating solar power plants, with capacities of 650MWp and 450MWp, respectively, are expected to begin operations in the fourth quarter of 2027. A new Corporate Renewable Energy Supply Scheme has also been introduced, providing businesses with additional options for sourcing sustainable electricity.

The government is also focusing on diversifying renewable energy sources through the development of firm supply options such as biogas, biomass, and small hydro under the Feed-in Tariff Programme and the Low Carbon Energy Generation Programme.

Further initiatives include expanding the Net Energy Metering Programme to utilise more rooftop and building space for solar installations, improving the Green Electricity Tariff, and enabling Malaysia’s first cross-border renewable energy trading with Singapore.

These measures are expected to strengthen Malaysia’s position in the global transition to sustainable energy while aligning with environmental, social, and governance commitments.