IN a renewed push to accelerate the country’s clean energy transition, the government will exempt the 1.6% Renewable Energy Fund (KWTBB) surcharge on electricity sourced through certified green energy schemes, starting 1 August 2025.
The decision, announced by the Ministry of Energy Transition and Water Transformation (PETRA), is intended to encourage wider adoption of renewable energy among businesses and households, while strengthening the domestic green energy ecosystem.
“The government has decided to exempt the 1.6% KWTBB collection from electricity tariffs for renewable energy programmes implemented by this Ministry,” PETRA said in a media release on Wednesday.
The KWTBB levy was first introduced in 2011 to support the Feed-in Tariff (FiT) mechanism administered by the Sustainable Energy Development Authority (SEDA) Malaysia. Since then, installed renewable energy capacity has grown significantly—from just 5MW in 2011 to 5,100MW today, largely driven by solar energy. Biogas, biomass and small hydro projects currently add another 855MW to the grid.
With new electricity tariffs coming into effect from 1 July 2025, PETRA reviewed existing renewable energy programmes and decided to waive the levy for electricity obtained through three flagship initiatives: the Green Electricity Tariff (GET), the Corporate Renewable Energy Supply Scheme (CRESS), and the Community Renewable Energy Aggregation Mechanism (CREAM).
“This exemption will take effect from 1 August 2025,” the ministry confirmed.
PETRA expressed confidence that this measure would provide further incentive for corporate and industrial users to take part in Malaysia’s energy transition agenda, as the country works toward its goal of achieving 70% renewable energy in the national electricity mix by 2050.
“This initiative is also expected to catalyse the development of a more progressive and robust renewable energy industry, in line with our responsibilities to future generations and the core values of Malaysia MADANI,” PETRA said. - Jully 24, 2025
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