Solar Energy in Malaysia: NEM, LSS and Rooftop Solar Programmes

Solar panels on a home’s roof have become a financial decision tightly bound up with government policy in Malaysia. But “going solar” means something very different for a homeowner in Ipoh compared with a factory in Pasir Gudang or a data centre that wants 100% green power. Each group of consumers has its own scheme.

This guide dissects the entire lineup of Malaysia’s solar schemes: the Large Scale Solar (LSS) auctions for utility projects, Net Energy Metering (NEM) for homes and businesses, plus three corporate and community mechanisms — CGPP, CRESS and CREAM.

What solar scheme options are available in Malaysia?

The choice depends entirely on who you are and how much energy you need. A homeowner wanting to install panels on their own roof is in a completely different world from a multinational company wanting to meet ESG commitments.

The table below summarises the five main pathways:

Scheme	Target consumer	Model	Capacity / quota	Implementer
NEM 3.0	Homes, businesses, government	Own rooftop solar, bill offset	2,500 MW (2021–2025)	SEDA
LSS	Utility developers / investors	Competitive bidding, solar farm	2,000 MW (LSS5)	Energy Commission
CGPP	Corporate (factory/services)	Virtual agreement (virtual PPA)	5–30 MW projects	Single Buyer
CRESS	Large corporates	Third-party grid access	Access charge 45/25 sen/kWh	Single Buyer
CREAM	Community & local consumers	Residential rooftop aggregation	Guideline 28 Mar 2025; apply from 1 Jun 2025	Single Buyer

All of them fall under the regulation of the Energy Commission (Suruhanjaya Tenaga), supported by different implementing agencies.

How does NEM 3.0 work for homes and businesses?

NEM is the most common pathway for the general public. You install solar panels on the roof, use the power generated first, and send the surplus to the Tenaga Nasional Berhad (TNB) grid. Under NEM 3.0, the balancing is done on a “one-for-one” basis — every kilowatt-hour sent to the grid is offset against one kilowatt-hour you draw from the grid.

According to SEDA’s RE portal, NEM 3.0 ran for a period until 30 June 2025, with a total overall quota of up to 2,500 MW. It was divided into three sub-programmes:

• NEM Rakyat (700 MW) — for residential consumers, opened on 1 February 2021 with a 10-year contract period.
• NEM GoMEn (100 MW) — for ministries and government entities, opened on 1 February 2021.
• NOVA (1,700 MW) — Net Offset Virtual Aggregation, opened slightly later on 1 April 2021, allowing owners of commercial and industrial systems to sell surplus power to the grid at the System Marginal Price (SMP).

Residential demand has been very strong. The overall NEM Rakyat quota is 700 MW; separately, industry reports show the residential solar allocation reached 350 MW by September 2024. All three sub-programmes closed on 30 June 2025 when the NEM 3.0 period ended; by the time of closure, NEM Rakyat was nearly fully allocated. Note: since the programme is now closed, the SEDA portal no longer accepts new NEM 3.0 applications.

What is Large Scale Solar (LSS) and who can take part?

LSS is not for homeowners — it is for developers and investors who build utility-scale solar farms. It is a competitive bidding programme designed to push the Levelised Cost of Energy (LCOE) as low as possible, delivered by the Energy Commission. The lower the tariff bid, the greater the chance of winning.

The fifth round, LSS5 (also known as LSS PETRA), is the largest to date, offering a total of 2,000 MW across four packages:

Package	Capacity	Project size	Equity requirement
Package 1	250 MW	1–10 MW	100% Bumiputera + SME
Package 2	250 MW	10–30 MW	Minimum 51% Bumiputera
Package 3	1,000 MW	30–500 MW	Minimum 51% Malaysian-owned
Package 4	500 MW	10–500 MW	Floating solar

The closing date for proposal submissions was 25 July 2024, and all LSS PETRA projects are scheduled to begin operations by 2026. The structure deliberately gives Bumiputera companies and SMEs room in the smaller packages, while opening the larger projects to well-capitalised consortia.

How do companies buy green power through CGPP and CRESS?

For large companies, installing panels on their own roof is often not enough to meet their energy demand. Two schemes fill this gap.

CGPP (Corporate Green Power Programme) was launched on 7 November 2022. It uses a virtual agreement model — the Corporate Green Power Agreement (CGPA) — which is a financial transaction between the corporate consumer and the solar developer without any physical transfer of electricity to the consumer’s premises. Eligible consumers must be in the manufacturing or services sector with an energy demand of not less than 1 MW. Each solar project is sized between 5 MW and 30 MW, and a single developer may serve a maximum of three corporate consumers.

CRESS (Corporate Renewable Energy Supply Scheme), launched on 20 September 2024, goes a step further by permitting Third-Party Access to the grid. Companies can sign a power purchase agreement (PPA) directly with a renewable energy developer, then “wheel” that power through the national grid by paying a System Access Charge (SAC):

• 45 sen/kWh to wheel power from a solar farm to a corporate consumer, or
• 25 sen/kWh when the arrangement is coupled with battery storage.

From 1 March 2025, the government opened CRESS to existing power consumers and maintained the SAC rates for three years (the RP4 regulatory period, 2025–2027), with SAC variation capped at 15% per regulatory period to give investors cost certainty.

What is CREAM and why does it matter for communities?

CREAM (Community Renewable Energy Aggregation Mechanism) extends green energy access to the community level. Its guideline was published on 28 March 2025, with applications starting on 1 June 2025. The concept is simple: a Local Energy Generator and Aggregator (LEGA) develops aggregated rooftop solar PV systems on residential roofs, then supplies green electricity to a Local Green Consumer (LGC) — commercial and domestic — within a 5 km radius through TNB’s distribution network.

This allows homeowners to derive value from unused roof space, while letting local businesses and households buy green power without owning their own solar system. CREAM is operated by the Single Buyer, with regulatory oversight from the Energy Commission and support from TNB’s distribution network.

What’s next

Malaysia’s solar schemes are evolving fast, and important dates are approaching. The NEM 3.0 quota ended on 30 June 2025 — if you are a homeowner or business, check the remaining quota on the SEDA portal and get quotes from registered installers as early as possible. Companies considering CRESS or CGPP should calculate the impact of the System Access Charge on their overall energy cost before signing a PPA. For investors, the LSS5 auction results and future LSS rounds will set the direction of the country’s utility solar market.

Watch for official announcements from the Energy Commission, SEDA and the Single Buyer for new quotas, tariff changes, and successor schemes after NEM 3.0 ends.