Green tax incentives extended to 2030: what it means for solar on your business

Budget 2027 extends investment tax allowances of up to 100% for green technology until 31 December 2030. Here is how it works for a business installing solar for its own use.

In Budget 2027, tabled on 9 October 2026, the government announced that green technology tax incentives will be enhanced and extended until 31 December 2030. For a business putting solar or battery storage on its own premises, this is the main tax incentive to know about.

What was announced

Investment tax allowances of up to 100% continue for:

• Companies buying green technology assets for their own use, known as GITA Asset. This is the route for a business installing solar on its own roof.
• Companies undertaking green and sustainable technology projects, including electric vehicle charging stations, known as GITA Project.

According to PwC's summary of the Budget, the own-use incentive covers qualifying assets bought from 1 January 2027 to 31 December 2030, in two tiers: renewable energy integrated systems (Tier 1) and renewable energy systems (Tier 2). For projects, applications must reach MIDA in the same period.

How the allowance works

An investment tax allowance lets a company deduct a percentage of what it spent on a qualifying asset from its taxable income. Under the rules in force until 31 December 2026:

The rates and lists for 2027 to 2030 will be confirmed in new guidelines. Until then, treat the table above as a guide to how the incentive works, not as the final 2027 rates.

The conditions that matter

• New and owned. The equipment must be new and owned by the company.
• For your own use. The system must serve your own premises, not generate income by selling power.
• Listed equipment. The asset must be on the government-approved MyHIJAU Directory. If it is not listed, the supplier has to register it.
• Apply after commissioning. Applications are made once the system is running, and within 24 months of purchase.
• Validation first. The Malaysian Green Technology and Climate Change Corporation (MGTC) issues a validation letter before the allowance is claimed with the Inland Revenue Board.

Timing: 2026 or 2027?

There is no gap. Spending up to 31 December 2026 falls under the current rules, and purchases from 1 January 2027 fall under the extended incentive. If your project is ready, there is no reason to wait. If it starts next year, the incentive will still be there.

How we help

• We specify equipment that is listed on the MyHIJAU Directory.
• We provide itemised invoices, equipment details and commissioning records for your application.
• We size the system for your own consumption, which is what the incentive requires.

This article is general information, not tax advice. Confirm your eligibility and the final 2027 to 2030 rates with your tax adviser or MIDA.