Solar Panel Systems In Malaysia: An In-depth Look

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Since 1900, global carbon emissions from fossil fuels have significantly increased, with emissions from fossil fuel combustion and industrial processes contributing about 78% of the total greenhouse gas emissions increase from 1970 to 2011. These gases, which include CO2, trap infrared radiation from the sun as a form of heat, which results in an increase in the global average temperature, causing extreme weather and melting of polar ice caps, subsequently resulting in higher sea levels, and flash floods in unimaginable extent as seen in our country in December 2021.

Consequently, renewable and clean energy are imperative now. Solar energy is sustainable, renewable, and plentiful. As the cost of using solar to produce electricity generally goes down each year, many Malaysians are increasingly switching to solar as it is an inexhaustible resource and does not cause any climate and environmental damage.

Before getting into the benefits of installing a home solar panel system, what is a solar panel?

What is a solar panel?

Solar Panel

Solar power is harvested using photovoltaic (PV) panels, which are built using a number of solar cells. These panels absorb photons from the Sun, which results in the production of an electric current in the cell through a phenomenon known as the photovoltaic effect, and the energy transforms electrical charges that flow through the system to be readily utilised by homes. 

They are usually placed in open and sunny areas, most commonly on a house roof, to maximise the system’s energy production and produce the maximum amount of electricity. The warm and sunny climate of Malaysia creates a significant potential for solar energy to be harnessed as a major source of renewable energy with an average amount of daily sunshine ranging from six to eight hours. 

The good news is that homeowners can also monitor their consumption of electricity generated by solar photovoltaic systems and sell excess energy back to utility companies such as Tenaga Nasional Bhd and Sabah Electricity Sdn Bhd via the Net Energy Metering (NEM) Scheme, which will be discussed further down below.

Reason to switch to solar power

There are many excellent reasons to consider switching to solar energy which does not only benefit a property owners but the community and the environment as a whole. As the sun is a powerful energy source, harnessing its power by installing solar panels can make a significant difference to the planet.

Here are some of the potential benefits of switching to solar electricity:

  • Reduce monthly utility bills from 54% up to 87% per month, depending on the amount of energy used and the rooftop size of a home.
  • Attractive Feed-In Tariff (FIT) incentives to remunerate individuals just by producing their own renewable energy for energy efficiency.
  • There is a 10% exemption from sales tax on solar PV modules that are manufactured locally.
  • Adds value to a property.
  • Playing a part in generating clean, renewable energy while helping the planet. It reduces carbon footprint.
  • An eco-friendly home upgrade that ensures long-term energy savings.
  • Little upkeep is needed, with clearing debris being the only primary maintenance required to keep the panels running at maximum efficiency. 
  • Reliable access to renewable energy at any time.

Types of residential solar systems

Solar Panels

Solar energy systems come in various configurations. As each option has its advantages and disadvantages, it is essential for homeowners to understand their long-term energy usage and their load profile to make a well-educated choice. 

Here are some of the different types of solar energy systems below:

Grid-tied Solar System

With grid-tied solar, the solar setup on a property is directly connected to the local power grid. As there is no necessity for a battery to store electrical energy, any excess energy gets stored in the local energy network. 

If the system is creating more energy than what a household consumes, excess electricity will then be fed back to the grid and can be sold to the electric company. Similarly, when there’s not enough energy coming from the sun during rainy seasons, electricity will be drawn from the utility grid. This further reduces a home’s energy costs and helps homeowners recoup the cost of installing solar panels.

As it does not require battery banks, a grid-tied system is relatively cheaper than stand-alone or hybrid systems and facilitates homeowners to take advantage of Net Energy Metering (NEM) systems. 

Stand-alone Solar System

Preferred by most people who live in areas where there’s a high level of sunlight, this system helps homeowners to achieve full energy independence from the local utility grid as the ​​system is not connected to the grid. A home pulls electricity from the battery bank for consumption. Hence, ​​grid failures and downtime won’t affect a home’s power supply.

However, a stand-alone system is more expensive than a grid-tied one because of the need for battery storage, and homeowners will not be reimbursed for excess energy. Besides, this system needs more maintenance as the batteries need regular care.

Hybrid Solar System

A hybrid system is still tied to the grid, but it has a battery backup integrated into the setup. One main advantage of this system is that homeowners can switch between power from the grid or power from their battery bank at their own will. Being connected to the local grid also means that homeowners can likely downsize their battery bank capacity, which makes it less expensive than installing a complete stand-alone system.

Malaysian solar panel installation requirements

After figuring out the right solar energy system for a home, it is important for homeowners to ensure that they’re eligible to proceed with their solar panel installation. Here are some other requirements to consider before an installation:

  • Be a registered TNB customer.
  • As solar panels can’t be installed on high-rises, you should own a landed property to be able to do so.
  • Have enough land and roof space to accommodate solar panel equipment.
  • Have a dry, well-ventilated space to store solar panels’ batteries.
  • Have a sturdy, leak-proof roof, and can provide approximately 6.27 square metres of roof space to accommodate each 1kW of electric generation.
  • Ensure that the solar panel instalment and usage abide by the laws regulated by local authorities.

Average cost of a residential solar panel Malaysia

There’s no clear and easy answer to the question of solar panel price in Malaysia, as the price of a solar system panel ultimately depends on several factors such as the installation’s size and scope, the solar panel’s quality, the particular scheme or company that homeowners engage for the service and more. You also need to keep in mind that you need to pay for upfront costs and installation costs.

However, the standard residential installation could vary from 4kW to 12kW, with the approximate market price ranging from RM15,000 to RM40,000. The payback period can range from 5 to 12 years, according to industry players’ estimates, thanks to a revamp of the Net Energy Metering (NEM) system by the Sustainable Energy Development Authority Malaysia (SEDA).

Calculating the cost

To get an idea of how much a solar panel could cost, it is essential for homeowners to determine the system size needed. Here are the steps on how to calculate the size of the panels a person’s home might need, according to Solar Panel Malaysia:

Step 1

Homeowners should check their electricity bills and get an average electricity usage (kWh) per year.

Step 2

Homeowners should find out how many hours a day the sun shines in their area. 

Step 3

Homeowners should determine the percentage of total household electricity needed. Homeowners with a bigger budget to purchase solar panels can cover a much bigger space of their roof with an 80%-100% coverage in favour of solar energy. However, homeowners with limited budgets may start with 50% of their household utilities coming from the sun’s energy.

Step 4

In order to estimate the size of the panels needed, use the following global standard formula:

Array size in kW = (average kWh/yr) ÷ (365 days) ÷ (solar hrs/day) x (coverage percentage) ÷ (75% constant efficiency)

For example, if a homeowner’s average electricity bill is RM 100/month with an average consumption of 500 kWh monthly and they have roughly 4-hour solar hours per day at a preferred 75% solar energy coverage, then,

Array size in kW = (6,000 kWh/yr) ÷ (365 days) ÷ (4 kWh/day) x (75%) ÷ (75%) = 4.17kW array size

Step 5

Homeowners should research how much a solar panel costs in the market to compute the amount it would cost them to purchase it based on the size they have calculated.

The calculation above is an estimated cost for the solar panels only. A solar panel system may cost between RM50,000 and RM60,000 with a professional hired.

Purchasing solar panels Malaysia

The Sustainable Energy Development Authority (SEDA) Malaysia has created a Registered PV Service Providers Directory which provides a list of over 110 registered PV service providers and 27 registered solar PV investors for homeowners to purchase or lease solar power systems. 

Homeowners can easily access this information here to survey the best rates of installing solar panels for their homes.

Incentives for Malaysian homeowners

Net Energy Metering (NEM)

NEM is a scheme introduced by the Energy Ministry to encourage Malaysia’s renewable energy uptake. Under this scheme, users will consume the electricity generated from the solar PV installation first, and any excess will be exported and sold back to TNB on a “one-on-one” offset basis following the TNB tiered tariff rates effective from 1 January 2019, in place of the previous scheme, which had a displacement cost of 31 sen per kilowatt hour (kWh). 

A new change would offset every 1kWh exported to the grid with 1kWh consumed. Hence, solar energy producers under the NEM are now selling and purchasing electricity at the same price. Consequently, solar power producers are very likely to have a higher return on investment.

Generally, solar panels can harness more electricity if they have a larger capacity (kWh). As the Net Energy Metering (NEM) programme lets users generate solar energy and earn from it, it is a greener and more effective energy management system that allows users to enjoy a reduction in their electricity bills by using the solar energy generated from their solar PV for their consumption.

Since NEM’s introduction in 2016, the quota allocation was 500 megawatts (MW) up to 2020 for qualified applicants to adopt the use of solar PV systems.

Feed-in tariff (FiT)

Malaysia’s Feed-in Tariff system grants individuals the opportunity to sell their energy produced using a solar system to the utility grid (TNB) at a premium rate.

The great thing about this system is that it guarantees investment returns as the government offers long-term agreements up to 21 years wherein individuals will be paid a certain amount for the energy they generated.

Financing schemes

Financing schemes provide easy instalment loans for households to adopt solar energy. For example, Solar Panel Malaysia has partnered with Maybank EzyPay, Public Bank Flexipay Plan & OCBC bank, IPP (Instalment Payment Plan) & EPP (Easy Payment Plan) to offer 12 months, 24 months or 36 months with 0% interest instalment plan for installing solar panels at home. 

Additionally, homeowners can opt for United Overseas Bank (UOB)’s 0% interest instalment plan solar package over 12, 18, 24 or 36 months with their UOB credit card under UOB’s U-Solar programme. Another option is that Hong Leong Bank has launched its HLB Solar Plus Financing-i which is a term financing facility with financing amounts from RM15,000 to RM60,000 with tenures from 3 to 10 years for purchase and installation of solar panels on completed or under construction landed property.

Pros and cons: DIY vs professional installation

A PV system has many complexities. Installing a solar system on your own is still possible for homeowners. However, in general, it is still best to have a professional installer handle the job to ensure that the system is properly set up. 

Before making a decision, here are some of the pros and cons of taking the DIY route or working with a professional solar installer:

DIY solar installation

Solar Panel


  • Home solar kits are less expensive and homeowners won’t have to pay for professional labour costs.
  • Going DIY is a speedier process as homeowners can purchase the solar kit directly online and begin the setup process when it’s convenient for them. They don’t have to spend time researching for the best or affordable installer in the area and arrange an appointment with them, which may be tedious.


  • It is a complex setup and homeowners usually need to have firsthand experience with electrical work such as working on the wirings for the panels, inverter, battery or meter. 
  • There is a risk of structural damage and the possibility of the panels coming down if they are not installed properly.
  • Application is limited as most DIY solar kits are designed for off-grid use which may not be enough to meet the energy needs of a home all the time. Homeowners are not allowed to connect their solar system to a grid without the sign-off from the utility company.
  • Solar installations require permits and specific regulations to be met and it can be a challenge to make sure the system meets the legal standards.

Professional solar installation

Solar Panel


  • Professional installers provide homeowners with higher quality materials and professional warranties so any future repairs may be covered.
  • Professional installers have a lot of experience and are qualified to install solar power systems with proper licensure or certification.
  • Professional solar installers can help homeowners to complete and file the permits and applications needed to get the solar power energy system up and running.


  • While solar companies provide the best service and quality, the costs can be daunting.
  • Getting a professional installation can be a long and tedious process.
  • It will take a lot of time to research all solar companies within an area and compare costs before making a decision.


In conclusion, solar power in Malaysia has many benefits and homeowners should take advantage of this technology as soon as possible and benefit from this clean, renewable energy power. 

Solar power will not only help to save money from the moment they are turned on, but it is also a great way to do good for the environment as solar panels are an eco-friendly solution and help thousands of households reduce their carbon emissions every day.  

Before switching to solar power systems, the best tip is to get multiple quotations, research and consider all available options by solar companies to make a well-informed decision and start saving on the solar panel installation process.

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