Budget 2027: what it means for solar and energy
Green tax incentives extended to 2030, a bigger push on the grid, and what homeowners and businesses should note from the Budget tabled on 9 October 2026.
Prime Minister Anwar Ibrahim tabled Budget 2027 in the Dewan Rakyat on 9 October 2026. Energy transition featured in several places. Here is what matters for anyone thinking about solar, grouped by who it affects.
For businesses
- Green tax incentives extended to 31 December 2030. Investment tax allowances of up to 100% continue for companies undertaking green technology projects, for EV charging stations, and for companies buying green technology assets for their own use. The incentives are described as "enhanced" as well as extended. Read our guide to what this means for solar.
- Lower tax for micro, small and medium enterprises. From year of assessment 2027, the rate falls by one percentage point, to 14% on the first RM150,000 of chargeable income and 16% on the next RM450,000.
- Small value assets. The limit for each small value asset that can be written off for capital allowance rises from RM2,000 to RM3,000.
For homes
- Higher bill protection threshold. Households using up to 800 kWh a month, up from 600 kWh, are exempt from the fuel adjustment (AFA), the RM10 retail charge and the 8% service tax from 1 September to 31 December 2026. The government says this covers more than 8 million domestic accounts.
- Energy-efficient appliances. Rebates of up to RM200 under the Nur Madani programme for buyers of energy-efficient air conditioners and refrigerators.
- SuRIA Home. The Budget did not announce an extension of the SuRIA Home solar rebate, so the deadline to have a system switched on remains 31 December 2026. How to claim it.
Grid and large-scale energy
| Measure | Amount |
|---|---|
| TNB investment to strengthen the national grid | RM15 billion |
| Centralised solar park for government buildings | RM1.5 billion |
| Large Scale Solar (LSS6) capacity reserved for Bumiputera companies | 150 MW |
| UEM Lestra investment, including energy storage at KLIA and a 1 GW hybrid project in Johor | RM1 billion |
| KWAP climate fund for renewable energy and decarbonisation projects | RM1 billion |
The Budget also referred to PETRONAS and TNB's involvement in cross-border projects under the ASEAN Power Grid, and to TNB fitting rooftop solar on welfare homes and places of worship.
The takeaway: the direction is steady. Grid investment, storage and solar keep growing, and the main tax incentive for businesses now runs for four more years. For homeowners, the near-term deadline is SuRIA Home on 31 December 2026.
Measures are summarised from the Budget speech and published reports. Details such as eligibility and start dates are set by the relevant agencies and may follow later.
Planning solar in 2027?
We'll look at your property and tell you which incentives apply, and which deadlines matter.
Sources
- The Edge Malaysia: Budget 2027 speech text, 9 October 2026
- The Star: Budget 2027, incentives and investments for energy transition unveiled, 9 October 2026
- The Star: Sustainability priorities in Budget 2027, 9 October 2026
- Bernama: PETRA allocated RM5.33 billion to strengthen water and energy infrastructure, 9 October 2026
- PwC Malaysia: Centre Stage, Budget 2027 overview
- Malay Mail: Households using up to 800 kWh enjoy full exemptions, 2 October 2026