This article first appeared in The Edge Malaysia Weekly on April 20, 2026 - April 26, 2026

DESPITE renewed interest in rooftop solar among homeowners, the demand is largely from high-consumption households, which are the biggest beneficiaries of electricity bill savings, according to solar players contacted by The Edge.

Lower-consumption households are not adopting rooftop solar at the same rate because of a less compelling financial reason and the technical challenges involved, even as the government pushes for higher solar adoption.

“The [residential property] segment with the highest return on investment (ROI) — large, high-consumption landed homes — is already partially penetrated. Expanding into the M40 and B40 markets requires solving financing and awareness issues, not just product-related ones,” says Pekat Group Bhd (KL:PEKAT) group managing director Chin Soo Mau.

Homeowners typically opt for solar when their electricity bills exceed a certain threshold, making the upfront capital — from about RM16,000 — justifiable. The payback period can be up to seven years of monthly bills of RM300 to RM350, according to The Edge’s estimates. It can take about four years if the monthly bills are RM900.

Zero-capital expenditure (capex) models, where providers fund the installation and homeowners pay reduced electricity bills, are available but industry players say these are generally viable only for households with monthly bills exceeding a few hundred ringgit.

“For residential users, particularly M40 and B40 households that typically install smaller systems, the financial case is less compelling. Payback periods of seven to eight years leave only a narrow window within the 10-year programme to realise meaningful savings, contributing to buyer hesitancy and slower adoption rates,” Chin explains.

“Zero-capex, own-use structures such as rent-to-own models and third-party PPAs (power purchase agreements) remain the most immediately scalable path for this segment,” he adds.

In short, the higher the electricity bill, the shorter the payback period, and vice versa. Does this mean low-consumption and lower-income households will be unable to adopt rooftop solar?

Last year, the government introduced a rooftop leasing programme called CREAM (Community Renewable Energy Aggregation Mechanism), which allows homeowners to rent out their rooftops to solar providers for income. These providers can then aggregate the generated energy and sell it to higher-consumption users for profit.

Meanwhile, the grid operator imposes a community access charge (CAC) to allow use of the distribution network.

Companies exploring CREAM include property developer Sime Darby Property Bhd (KL:SIMEPROP), which announced initiatives for new homes in April 2025, as well as TIME dotCom Bhd (KL:TIMECOM), through its renewable energy arm TIME Energy Sdn Bhd, in June last year.

Following industry feedback, the government reduced the CAC to 9 sen/kWh from 15 sen/kWh last August, with the aim of lowering the barrier to entry. However, there has been little progress since.

“The economics simply does not work for the majority of Malaysian homes, whether under CREAM or other rooftop solar schemes,” says TIME Energy CEO Arjun Arasu.

Some may argue that the owners of landed homes are typically not from the low- and middle-income groups. Also, lower-consumption users currently benefit from higher Energy Efficiency Incentives (EEI) in tariff calculations. Those who consume below 600kWh (around RM216 per month, or RM266 before EEI) are exempt from fuel cost surcharges or rebates under the Automatic Fuel Adjustment (AFA).

However, there are owners of low-cost landed homes and residents of flats or condominiums who could benefit if the rooftop leasing programme helps to lower electricity bills and increase their disposable income, as noted by the Ministry of Economy when the concept was proposed in 2023.

Additionally, many mature suburban areas cannot yet adopt rooftop solar due to limitations in distribution network capacity, which may take years to upgrade.

When asked during the Energy Commission’s briefing on its annual review in April about the need to upgrade its distribution network in mature housing areas to support CREAM, its CEO Siti Safinah Salleh said: “To a certain extent, this is true. However, if there is sufficient demand, the operator can approach us to request an upgrade, as it will benefit the system.”

To boost rooftop solar adoption among the M40 and B40 groups, Pekat’s Chin proposes reforms for strata properties.

“Condominium and apartment owners remain largely excluded due to the requirement of joint management body’s consent and grid connection complexities. A clear regulatory framework for strata solar, including virtual net metering across units within the same building, would unlock a significant untapped urban segment,” he says.

Verdant Solar Holdings Bhd (KL:VERDANT) managing director Zeth Lim suggests that CREAM should eliminate the CAC for 10 years, instead of charging nine sen/kWh with potential revisions after the fourth year. “This would enable lower-income homeowners to lease their rooftops.”

Lim proposes government-backed, low- or no-interest loans for B40 households to install rooftop solar and allowing repayments to be financed through energy savings — similar to Australia’s on-bill financing model.

If Malaysia is serious about solar, it needs a complete relook at the policies, says TIME Energy’s Arjun. “Current frameworks skew favourably towards the T20, and we need to focus on the rest of the country,” he adds.

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