EFS Group Commissions Rooftop Solar Project in Klang Amid Rising Energy Costs in Malaysia

Rising electricity tariffs and evolving carbon regulations are accelerating the shift toward renewable energy among Malaysian manufacturers, as demonstrated by a new rooftop solar installation completed by EFS Group.

The company has commissioned a 403 kWp rooftop solar system for Cheng Hua Engineering Works Sdn Bhd at its facility in Klang. The project comes at a time when Malaysia’s base electricity tariff has increased by approximately 14% to 45.62 sen/kWh under Regulatory Period 4 (RP4), marking the first tariff hike in over a decade.

According to EFS Group, the solar installation has already delivered significant results. In its first full month of operation, the system reduced Cheng Hua Engineering’s electricity costs by nearly 50% while offsetting about 30% of the facility’s total energy consumption. The system is expected to generate approximately 362,280 kWh of clean energy annually and reduce carbon emissions by around 400 metric tonnes per year.

The move reflects growing pressure on industrial players to manage energy costs amid regulatory changes, including the introduction of a national carbon tax announced in Malaysia Budget 2026. The tax is expected to initially target sectors such as iron, steel, and energy, further incentivising decarbonisation efforts.

In addition, Malaysian exporters are facing increasing compliance requirements under the Carbon Border Adjustment Mechanism introduced by the European Union, making low-carbon production strategies a key competitive factor in global supply chains.

EFS Group CEO Darren Tan stated that energy resilience is becoming central to business profitability, noting that companies adopting renewable solutions are not only reducing emissions but also strengthening their financial performance.

Cheng Hua Engineering, which first adopted solar technology in 2014 under Malaysia’s Feed-in Tariff (FiT) programme, has expanded its solar capacity under the Self-Consumption (SelCo) scheme. The latest installation was fully self-funded, underscoring the company’s confidence in solar energy as a long-term, bankable asset.

The project aligns with Malaysia’s broader clean energy ambitions outlined in the National Energy Transition Roadmap, which targets 31% renewable energy capacity by 2025, 40% by 2035, and 70% by 2050.

Industry observers note that early adoption of renewable energy solutions could offer manufacturers a competitive edge as Malaysia transitions toward a low-carbon economy and adapts to a rapidly changing regulatory environment.