Malaysia Updates Renewable Energy Schemes to Boost Solar Adoption

Malaysia's Energy Commission has announced comprehensive updates to its renewable energy initiatives, aiming to enhance solar energy adoption across the nation. These changes encompass the introduction of the Solar Accelerated Transition Action Programme (Solar ATAP) and revisions to the Corporate Renewable Energy Supply Scheme (CRESS) and Solar for Self-Consumption (SELCO) guidelines.

Effective January 1, 2026, Solar ATAP succeeds the previous Net Energy Metering (NEM) scheme, allowing consumers to install rooftop solar photovoltaic (PV) systems primarily for self-consumption. Notably, the program permits the export of surplus energy to the grid without a specific quota allocation. Domestic consumers are subject to capacity limits of 5 kW for single-phase and 15 kW for three-phase connections, while non-domestic consumers can install systems up to 100% of their maximum demand, capped at 1 MW. Bill credits for exported energy will be based on the energy charge component for domestic users and the average system marginal price for non-domestic users.

The CRESS guidelines, revised on December 29, 2025, introduce several key updates. The definition of the Bilateral Energy Supply Contract (BESC) has been amended to require review by the Single Buyer prior to execution, ensuring compliance with Clause 7.3 of the guidelines. Additionally, the treatment of excess energy supplied by Renewable Energy Developers (REDs) will now be subject to the terms of the BESC, allowing for contractual flexibility regarding compensation mechanisms for excess generation or consumption shortfalls. The application process has also been streamlined, splitting the power system study into two stages and permitting the submission of term sheets for land lease agreements and BESCs at the application stage.

Adjustments to the SELCO program, announced on December 31, 2025, include revising the system capacity threshold from over 1 MWp to over 1 MWac for systems subject to the standby charge of RM12 per kWp. Furthermore, the requirement to install a Battery Energy Storage System (BESS) now applies only to systems exceeding 1 MWac, a change from the previous threshold of 72 kWp.

These updates reflect Malaysia's commitment to fostering a more flexible and market-driven approach to renewable energy, aiming to attract investment and accelerate the nation's energy transition.